RUECKERCONSULT
"Is Office Still Worth the Investment?" panel discussion, INVESTMENTexpo 2026, Berlin
The day before this panel convened at the Rueckerconsult INVESTMENT Expo in Berlin last week, KanAm Grund signed a lease in the City of London at nearly £110 per square foot. Anthony Bull-Diamond, KanAm's chief executive, mentioned it almost in passing — as live confirmation of a rental trajectory that Philip La Pierre of LaSalle Investment Management had just outlined, with City rents breaking through the £75-to-£100 range. The room took note. In a market where office has spent four years being written off, one of Germany's most respected real estate investment houses had just put its name to a lease at a level that would have seemed implausible not long ago.
That set the tone for a discussion that proved considerably more bullish on office than the prevailing narrative — but bullish in a precisely defined way. What emerges is not a uniform recovery, but a market that has split into investable and effectively uninvestable segments.
The structural driver is supply. New office completions across Europe are running at 40–50% below the five-year average, with a significant proportion of what does reach the market pre-let before delivery. In Amsterdam, Pieter Vandeginste of ASR Real Assets expects zero new offices over the next three to four years. The pipeline is not coming back any time soon. Against that backdrop, LaSalle leased over 100,000 square metres last year at 22% above underwriting, with single-tenant buildings in London and Paris coming in 30–40% above expectations. "Economic rent pays the game," La Pierre said. "And if you don't have that, you have stranded assets."
For Bull-Diamond, the investment case is direct. Prices have corrected 20–50% in some markets; transaction volumes are running at half of long-term norms. "Office is seriously underpriced. It is an anti-cyclical moment in time." La Pierre put the same point differently: his firm has cut office exposure in open-ended funds from 60% toward 30% over five years, while simultaneously securing a new €500 million mandate from a client investing exclusively in office. Capital is not withdrawing from the sector so much as dividing sharply in its view of it.
The geography of survival
That division is most visible in the occupational data. In the Netherlands, vacancy in prime CBD locations stands below 4%, against a national average approaching 12%. More than 70% of take-up is concentrated in the five largest metropolitan areas. The office has not lost relevance, but it has changed its purpose — from individual workstations to collaboration, meetings and social contact. Peak occupancy in the Netherlands has returned to pre-COVID levels, but in a fundamentally different type of space.
Connectivity has become the decisive factor. Sixty percent of Dutch corporates would consider leaving a poorly connected location; the same group would pay more to move to a better-served building. Accessibility is no longer a secondary consideration. It is a pricing driver. Cities where demographics, jobs and transport align — London, Paris, Amsterdam, Madrid, Munich — are where demand concentrates and rents hold. Everywhere else, the picture darkens quickly.
In locations where rents sit between €15 and €20 per square metre, refurbishment costs cannot be carried. Incentive packages currently exceed 50% in these markets, and once fit-out contributions are added, income disappears. La Pierre's term for what has happened to capital deployed in peripheral locations during the low-rate era: "capital annihilation." On the prospect of a cavalry-led market recovery rescuing those positions: "They ain't coming."
The reckoning deferred
Many of those assets remain on institutional balance sheets at values that could not be realised in a sale. Karin Diedrich of ARAG SE put a target ceiling of 20–30% on office within a healthy real estate portfolio — but reaching it requires transacting assets in a market where liquidity for weaker stock has largely gone. The write-downs are still in the books. The adjustment is still under way.
The panel's closing question sharpened the picture. Asked where each panellist would put €50 million in European office today, the answers converged fast. Vandeginste: Amsterdam, where zero new supply over the next three to four years makes the arithmetic straightforward. La Pierre: Amsterdam, same reasoning. Bull-Diamond chose differently. "The City of London. Despite political turmoil and economic uncertainty — London is not the UK. It's its own little ecosystem. It has growth, and it has supply constraints."
Four panellists. Two cities. Three direct answers. Clear conviction.
Office has not ceased to be an investable asset class. But it has ceased to be a broad one. The question is no longer whether office works, but where. And the answer to that is narrowing.