The offices are not dying, the station district is not a zombie land, Frankfurt is neither a Gucci bag nor a junk shop – but there is not much to sugarcoat. 3 questions for the banker Martin Erbe, the economic development officer Ansgar Roese and the real estate entrepreneurs Fabian Klingler and Reimund Kaleve.
The often-proclaimed death of the office is still a long way off. There are currently just over 500,000 square meters under construction. But Frankfurt has another special feature. How can the old refurbished buildings be made so attractive that they are actually used?
Martin Heir (Head of Real Estate Finance Germany, Helaba): The high-rise buildings in Frankfurt are 25 years or more old. Wherever new high-rise buildings are being built, the issue (…) is not yet being discussed. Not yet. But it will come. That means that people abroad are also looking at it: ‘What is actually being done with the older buildings in Frankfurt? How is it being developed further?’ That is a very big question that we are asking ourselves here. (…)
We are building. There are state-of-the-art office buildings here. They are in demand. They are rented out. But what happens to the buildings that are vacated, that have to be vacated because they need a certain amount of refurbishment? Also from an (…) ESG perspective. What happens to them? Frankfurt can take a pioneering role here. (…)
To get employees back into the office, I need to be in a good location. I need to have amenities (Amenities) offer so that employees can return (…) to modern office buildings, modern spaces, so that they feel comfortable and can communicate with each other. (…) And that is why the new buildings that are now being built in Frankfurt are probably far too little.
Ansgar Roese (Managing Director of Economic Development Frankfurt): Many companies tend to give back a little in terms of space. But when moving, they also tend to take more expensive, higher-quality space and use it to create an attractive working environment.
There is a lack of dialogue on the housing shortage
There are too few apartments. What is the natural consequence?
Reimund Caleve (Head of Project Development at Nassauische Heimstätte): Rents in Frankfurt. Apartment rents continue to rise exorbitantly. We are currently renting out apartments in the Schönhofviertel north of the City West. Others are renting out apartments there too. Our rent is significantly, significantly lower. The others are well over 20 euros net cold – 100 square meters, 2,000 euros net cold.
Fabian Klingler (CEO of abrdn Investment Germany): It is true that there are signs in Frankfurt of perhaps doing something with subsidized housing. But there is a lack of dialogue with investors: ‘What do they need?’ We still have this limit of five euros rent in the first subsidy route. So if I calculate with five euros rent, I don’t even have to think about whether I should invest. I can actually leave that out. These are somewhat ideological goals that are being pursued, which simply do not reflect reality.
Gravity: We came to the conclusion that it makes the most sense to sit down at a table. The famous “round table” – and that works really well. We initiated a series of workshops for a project. We want to build around 300 apartments in our own portfolio and demolish around 80.
Roese: In addition, it is important to ask: ‘Where do we have a large number of vacant office buildings, and does it make sense to develop residential properties there?’ Not every office location is ultimately suitable for residential development, but where it is suitable, we should look.
Ringer: We need concepts for this and it simply costs money. The fact is that one or two things may have to be demolished.
Bahnhofsviertel and Zeil: Frankfurt at the limit?
In our Frankfurt group, we also talk about the image that the city sometimes presents abroad. And that is not only positive. At the time of the European Championships, there was even talk of a zombie land in relation to the train station district. Even if this image was later corrected in a remarkable way, there is still a somewhat bitter aftertaste given that our group had already discussed the topic intensively last year. At the time, those involved agreed that the city would manage to remedy the situation in some way before the European Championships. That didn’t happen. What went wrong?
Roese: I don’t really want to say that something went wrong. That is very important to me in this whole discussion about Frankfurt’s train station district. It is a huge task that the city is facing. And unfortunately it is not a task where you can simply achieve quick success with different measures; it is a very, very difficult situation. (…) We are now talking about a different form of drug: crack and everything. And we are not talking about the drugs of 15 years ago, opiates, which tranquilized people, but it leads to people losing almost all inhibitions.
The measures that have been initiated are having an effect. It happens, and we also notice this from discussions with companies, that we have some shifts within the station district, but we can certainly see – and this is also something that the companies are already telling us – that they have already noticed an improvement compared to the turn of the year 2022/23. We had the situation there that companies told us ‘My employees only go out on the street in groups of two or three’, but that has since been defused. But we are still a long way from where we actually need to be.
Another district is also under criticism…
Ringer: … The Zeil is going into permanent ruin. What is happening is not good. The tenants, the quality tenants, are all leaving. (…) In the development of the past 20 years, since I have lived in Frankfurt, the Zeil has only been going in one direction: downwards, and that also in terms of urban development. What we did at the Hauptwache, simply asphalting everything, is not a concept.
Roese: I don’t entirely agree with this statement. We are seeing a lot of positive impulses on the Zeil. Recently, a major competition was held for the large P&C building, where people are also thinking about other uses, and there is also talk of including a school on the upper floor.
With the recent takeover of the former Hauptwache 1 by the Sparkasse, we have now made a clear statement that the Sparkasse has said: ‘We are going there and we are committed to the location’. And so a lot is happening. The former Esprit building is also more or less being refurbished. We will no longer see retail on all floors as we used to, but only on the lower floors, with jobs being created above and a rooftop at the top. There are many positive impulses there. Yes, but of course there are also challenges. This is particularly the case with order and cleanliness.
Ringer: If you’re a gentleman and want to shop here today, textiles, you just can’t get it. You have to go somewhere else in other cities. The demand is definitely there, but it doesn’t take the tenants into account at all. We’ve also lost major tenants, by the way, because the city hasn’t fulfilled some of its wishes.
We have to make sure that such areas are also attractive to a certain quality of tenants in order to meet the demand that we have from the population. And it’s not the Gucci bags, but it’s not just Primark either, a premium segment has to be represented in the city – and that’s not the case at all in Frankfurt.
(…) Go to Düsseldorf on the Kö, go to Munich on Kaufinger Strasse, go to Stuttgart. Everywhere is better than in Frankfurt. In Frankfurt it is an absolute disaster.
