EUROPEAN OFFICES ARE BECOMING RESIDENTIAL ASSETS

For decades, office buildings were among the most predictable assets in commercial real estate: long leases, stable tenants, institutional demand.

That thesis is being rewritten.

Across Europe, office buildings are increasingly being converted into homes rather than repositioned as better offices. In Geneva, 48 Giuseppe Motta — a 1982 administrative building, once occupied by an NGO — is becoming 86 residential units.

This isn't about offices becoming obsolete. It's about the economics changing.

Euro area employees working from home at least occasionally nearly doubled between 2019 and 2024, from 11.7% to 22.4% (ECB). The result is polarisation: the best buildings still lease easily, the rest increasingly don't.

European office vacancy stood at 9.5% at end-2025 — 5.6% in prime CBDs, 11.1% in secondary locations. The gap has widened every year since 2020.

Financing amplifies the pressure. CBD office values fell 17–28% across London, Paris and Berlin in the second half of 2022 alone, as the ECB's tightening cycle repriced the sector. Prime values have since stabilised; secondary values are still adjusting.

Over €185 billion in European real estate loans mature in 2026, much of it written during the 2019–2021 low-rate cycle. Offices represent roughly 40% of Europe's real estate debt funding gap — the largest of any sector. Refinancing an old loan against a devalued, half-empty secondary building is not a straightforward conversation, and extensions only delay it.

Geneva shows the same pattern: strong demand for modern buildings, rising capital needs for ageing ones. Owners are no longer just asking how to renovate. They're asking whether to stay an office at all.

Add Europe's deepening housing shortage, and conversion becomes an obvious lever — faster than new-build, lower in embodied carbon.

Not every office qualifies: deep floor plates, poor light, and outdated services all limit candidates.

The real question isn't where a building sits. It's what it should become