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76% of European offices at risk of obsolescence by 2030

Most of the European office market could become obsolete by the end of the decade. This is the conclusion of a report by real estate consultancy Cushman & Wakefield. 

After analyzing 218 million square meters of office space in 11 major European countries, the firm confirmed that, according to the study, "more than three-quarters of office space in Europe is at risk of becoming obsolete by the end of the decade". Specifically, it said that this risk affects 76% of the current supply of office space and that the only way to deal with obsolescence is to invest in modernization or find other uses for these assets. 

For office owners, inactivity is no longer an option. Javier Bernades, office director at Cushman & Wakefield Spain, adds: "Landlords who invest in sustainability, service, and tenant wellbeing will protect the value of their properties, ultimately enabling them to compete in an increasingly demanding market."

The consultancy estimates that more than half of existing office premises in Europe are over 30 years old: 62% are in need of refurbishment to avoid deterioration. In Spain, 53% of offices were built before 2000 and only 14% have been built or refurbished in the last 10 years. 

Cushman & Wakefield argues that there are factors that will force owners to update their properties and accelerate the modernization process, such as mixed-use developments, new housing needs, increased legislative measures for sustainability, or economic instability. And it is worth remembering that the greatest demand is for energy-efficient properties. 

Properties with the highest rating and certification represent more than half of all office demand in Europe between 2019 and 2022, and this trend will only increase, as demand outstrips supply in many markets, especially Prague, Budapest, Milan, Warsaw, Madrid, Barcelona, and London. In the specific case of Spain, the quality area represents 64% of the total space developed. 

As the consultancy points out, "the time has come to decide which assets can adapt to this new reality and to rethink what to do with assets that will never be able to meet the new standards".

Milan is the European city with the most offices over 30 years old

According to data compiled by Cushman & Wakefield, Milan is the European capital with the highest number of office buildings over 30 years old, with more than 70% of the total supply. It is followed by Stockholm, Paris, London, and Amsterdam. In all these cases, more than half of the office buildings are at least three decades old.

Madrid and Barcelona, on the other hand, are at the bottom of the ranking. In the capital, around 35% of office buildings are more than 30 years old, and in the Catalan city, almost 30%. These figures are in line with those of Berlin and are higher than those of cities such as Brussels, Munich, and Frankfurt. However, the best figures are in Warsaw, Prague and Budapest, where there are very few old offices.

 

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