New construction plummeted due to the high costs of purchasing and financing and stricter lending guidelines. When it comes to office buildings, people have long wondered why there is still so much construction going on, given the boom in home offices. And now? More and more companies are increasingly bringing their employees back to the office. How does the real estate market respond to this?
Retail giant Amazon will scrap the home office rule from the end of this year and wants to bring employees back to their offices. The SAP Group also wants to see its employees more often. “There is a clear trend to bring employees back into the company,” says Christoph Oßberger, responsible for Western Austria at real estate service provider CBRE.
What are companies doing to be attractive again? “Especially companies from the “The information and communications technology sector invests terrible amounts of money in equipping their offices,” says Oßberger, “they do everything they can to involve employees, because they have realized that people need direct contact and that teamwork is simply better when working at a short distance. ”
An attractive office location, state-of-the-art equipment, flexible models that allow working both at home and in the office: it is all becoming the order of the day. Projects in Linz, such as the Techbase campus, the expansion of the tobacco factory including the Quadrill complex and the port portal, are well on schedule here.
“No parking, no good facilities”
However, Oßberger knows that times are tough for offices in inner-city locations. “The better is the enemy of the good, the new is the enemy of the old,” he muses. It is therefore not easy to find tenants for housing in the center of the Upper Austrian capital. Linzer Landstrasse is home to not only empty commercial spaces, but also many vacant spaces on the upper floors. “There are no parking spaces there, no good facilities, the infrastructure is tired – the question of subsequent use now really arises,” says Oßberger.
“The wheat has already been separated from the chaff”
Isn’t there still too much construction going on in Linz? The real estate expert agrees: “Many projects were certainly built before Corona. But what is there now, is actively rented and can be occupied now and in 2025, that is ‘Survival of the Fittest’. The wheat has already been separated from the chaff.” Some of the project operators who jumped on the bandwagon during the boom years between 2019 and 2022 and believed that they could make money with office buildings have already disappeared.
After all, some planned expansions are not necessary
The faltering economic engine, uncertain future prospects, all this leaves its mark on potential tenants. “We also see in Linz that there are companies in the information and communications technology sector that planned office expansions three or four years ago and are now thinking of converting them here.”
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
