Rethinking European Offices 2030

We see an acceleration in the risks of offices becoming obsolete. By 2030 we estimate over 170 million sq. m of office stock is at risk of becoming obsolete in sixteen European cities. This is equivalent to more than six times the total office stock in Central London.
Western European markets face a greater challenge with nearly 80% of stock at risk in seven leading cities the reflecting a relatively older stock profile.
Repositioning of assets is likely to be the optimal solution in CBD locations with strong demand for best-in-class space and premium rents being achieved.

Higher vacancy in non-central locations is driving a widening discount in values. Here repurposing of assets is likely to be the best option with more favourable alternative use values.
The value differential between offices and other uses has narrowed since 2019 providing a greater incentive to consider alternative use types.
Clear strategic analysis is required at an asset level to determine the optimal solution.