– Corona and the trend towards mobile working are hardly slowing down high-rise construction in Germany’s financial metropolis Frankfurt. On the contrary: New projects are in the making, some of them very likely.
The corona numbers are also increasing rapidly in the German financial center. The incidence is currently almost 700 and thus well above the national average. Frankfurt has long been a corona hotspot: masks are compulsory in the center, the streets are empty, only a few people are out and about. Banks and other financial companies such as fund companies are largely obliged or strongly recommended to work from home.
Even after the pandemic is over, companies will not fully scale back this. “Large companies are reducing their office space,” says Christian Schulz-Wulkow from the real estate company EY Real Estate. But offices would not be useless. “Fewer but better offices are needed, also in terms of sustainability”. This is currently BECOMING visible in Mainhattan. In a number of places new skyscrapers are growing into the sky. Despite working from home, experts see the market recovering again. Corona is no longer a major issue.
In December, the plan for a new record-high tower in Frankfurt and thus in Germany was even presented. At a height of 288 meters, it is intended to enrich the skyline, which is unique in Germany, on the site of the former main freight station. That would be almost 30 meters more than the currently tallest building in the city, the Commerzbank headquarters in the middle of the financial center. However, it will still take several years to complete. Nevertheless, critics complain that it should not be at least 300 meters. More than 20 years ago, ex-US President Donald Trump had the idea of building a 365 meter high tower. After the terrorist attacks in 2001, however, the plans were abandoned.
The 288 meter high project should not be the only new project. In the first half of the year, the city will present a new high-rise plan. He is said to provide for more than a dozen new skyscrapers.
Experts probably think this is realistic. Also because the office market in Frankfurt recovered significantly last year, driven above all by a “brilliant” end of the year, as Riza Demirci, head of the Frankfurt real estate division of the major bank BNP Paribas, says. “Despite the continued challenging environment in the wake of the corona pandemic, take-up in the banking metropolis was at the level of the ten-year average”. In 2021, office space take-up in the city center rose by a rapid 40 percent to 458,000 square meters. The real estate company JLL calls 468,000 square meters. This is of course significantly less than in Munich with 661,000 and in Berlin with 834,000 square meters, i.e. GNP.
Germany’s highest office rent
According to Demirci, banks and other financial firms rented 87 percent more space in Frankfurt than in the previous year. However, at 89,000 square meters, the area was significantly lower than the average of 114,000 square meters over the past ten years. With a peak of 47 euros per square meter, the highest office rents in Germany are still being asked in Frankfurt. According to BNP, the average is 20.60 euros. The top office rent in Berlin and Munich is 43 euros each.
Nevertheless, due to Corona, more and more offices are empty in Frankfurt that do not meet the latest standards, even if the development has been delayed. It is currently around 1.3 million square meters at BNP, which corresponds to a rate of 8.5 percent. However, this is below the average of recent years. In Berlin and Munich, however, the vacancy rate of 3.4 and 4.8 percent is significantly lower than in the financial metropolis.
A hybrid working model of office and home office would become the standard in many companies, says BNP manager Marcus Zorn. “The demand for office space will remain and continue to grow in the slipstream of the economic upswing, rising population figures and progressive urbanization in the top locations. The trust of project developers is therefore high, and construction activity remains at a high level, not only in Frankfurt. Almost 3.9 million square meters of office space is currently under construction nationwide, only three percent less than in 2020. In Frankfurt it is currently 619,000 square meters. “How quickly attractive projects are being increased, especially in the highest locations, the pre-letting rate in the banking district is currently 60 percent,” says Demirci.
“Mainhattan” currently has around 80 high-rise buildings with a height of at least 60 meters. Ten reach a height of more than 150 meters – including the European Central Bank – another almost 30 more than 100 meters. According to Skyatlas Frankfurt, 35 are under construction or planned, often for office, retail, gastronomy and residential purposes.
The Four Frankfurt project is particularly worth seeing
One of the most spectacular instances is currently Four Frankfurt in the heart of the city center, on which an important Deutsche Bank building once stood. At Four Frankfurt, a total of four towers will be built by 2024 for around 1.4 billion euros, which will rise 100, 120, 173 and 233 meters into the sky. The latter will have 54 floors and will cover an area of more than 82,500 square meters. According to the project developer, two-thirds of this space has already been let, primarily to banks, financial service providers, law firms and consulting firms. For example, the savings bank fund provider Deka has already signed a rental agreement for ten floors.