Empty workplace spaces might help address housing deficiencies.
Turns out, a study carried out by the Ifo Institute in collaboration with Colliers reveals: With remote work rendering many offices vacant, there's potential to transform these spaces into living quarters for over 100,000 individuals. This could potentially alleviate the housing crunch, but financial obstacles persist.
In the seven major German cities, namely Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart, and Düsseldorf, approximately 60,000 new dwellings could be built from 100,000 vacant offices due to remote work, according to the findings of the study.
As Ifo researcher Simon Krause put it, "Vacant offices could ease the housing shortage in prime urban areas, yet, only a tiny percentage of potential conversions are financially viable." The study analyzed that around 30% of these void offices are technically and legally eligible for residential conversion, amounting to around 2.3 million square meters as per present vacancy rates.
Given the predicted decrease in office space demand, an additional 3.5 million square meters of space may become available. Assuming a 20% loss of area, a standard apartment size of 77 square meters, and a household consisting of 1.7 individuals, the study suggests that approximately 60,000 apartments could be constructed to accommodate 102,000 people.
As Krause pointed out, the economic feasibility for residential conversion is often limited. Andreas Trumpp of Colliers, co-author of the study, added, "Creative alternative uses along with partial conversions and urban development are necessary to cater to urban needs such as housing, commerce, and leisure."
The home office trend in Germany has remained unchanged for nearly two years, with 25% of employees continuing to work from home. Over two-thirds of companies have implemented the practice. The study predicts a 12% decrease in office space demand by 2030.
Larger service providers, who occupy the majority of office space, are downsizing and relocating to modern, centrally located sites. According to the study, one-quarter of large service companies are reducing their office space, and 20% are planning to relocate at least one office. Krause concluded, "Remote work is likely to boost vacancy rates and the likelihood of office buildings with no alternative use."
The transformation of vacant offices into living quarters could significantly contribute to the real estate market, potentially creating 60,000 new dwellings in major German cities. However, only a fraction of these conversions are financially viable due to economic constraints.
