Office construction and office developments

Underpinned by the high takeup levels on the office market in 2007 and 2008, office construction activities will rise to an absolute record level of around 262,000 m² gross floor area (GFA) during 2009.

Looking back, this is the second best result of all time, after 1991. The high volume of new construction is not solely a result of the heightened demand over the last few years – it also reflects a change in the structure of that demand: by far the majority of new rentals today concerns new office buildings or buildings that have not even started construction. Building quality and technical infrastructure (such as ‘green building’ certification, which guarantees low overheads) have become mission-critical factors in the search for added value. To a certain extent, this ongoing quest for quality has been at the root of the constant increase in annual construction volume that began in the 1950s. During the 1950s and 1960s, an average of 80,000 m² were built per year. The figure rose to 85,900 m2 in the 1970s and 96,600 m² in the 1980s, and by the 1990s had reached a level of 151,600 m². The expected volume for this decade will be around 115,000 m². However, this decline does not reflect a general reversal of leasing behaviour. It can be traced back to the low construction levels at the beginning of the decade, which were a result of the dot-com meltdown in the early 2000s.

The fact that Düsseldorf is undergoing a major process of redevelopment and renewal is obvious from the volume of investments made by the State of North Rhine-Westphalia: the State is currently investing around 400 million euros in new buildings for its capital city. This includes large office developments such as the city’s new Law Centre, the new State Office for Salaries and Pensions and new facilities for the State Office of Data Processing and Statistics, now renamed IT.NRW. The new Law Centre, just east of the main railway station, is located in an area previously known for commercial/industrial applications which has been slated for urban redevelopment. Over the long term, the new office and courtroom complex is expected to lead to a much-needed revitalisation in that area. The 66,000 m² State Office of Criminal Investigation on Völklinger Straße – set for completion in 2009 – will be one of the largest office projects seen for many years.

• 2009 sees new records for office building construction at around 262,000 m² GFA
• 157,800 m² are being constructed in the submarkets in the city’s northern districts alone
• The largest building completions: State Office of Criminal Investigation (60,000 m²), Sky Office (37,400 m²) and E-Plus (34,500 m²)

In the city centre, state-of-the-art offices are being developed at strategic locations

In the central areas of the city and its classic premium locations, high-quality office space is traditionally in short supply. In Düsseldorf’s City Centre district between Berliner Allee and the main railway station, the majority of existing office space was built between the 1950s and 1970s. The potential for building sites has been practically exhausted and the possibilities for developments are limited to either the demolition of existing properties and new construction on the same site or total refurbishment of existing office buildings.

The fact that it is still possible to put up first-class office buildings despite the shortage of space can be seen from the Hofgarten Palais next to the city’s main theatre. It will be the only office building to be erected in the inner city this year. Retaining much of the original building’s classified facade on the Hofgarten side, this architecturally appealing office complex offers 14,650 m² of office space.

The first tenants already moved in and include Management Engineers GmbH + Co. KG, the law firm Gleiss Lutz Rechtsanwälte and Catella Property Advisors GmbH. Because of the lack of available land, building projects in recent years have been somewhat more modest, such as the smaller office buildings at Berliner Allee 41 (around 4,400 m²) and Berliner Allee 22 (an approximately 2,770 m² refurbishment project).

Development restrictions also apply to other top-class locations such as Königsallee and the Financial District. Last year this area only saw the construction of the Karlstadt-Carree (approx. 7,900 m²) in addition to a number of smaller properties along Königsallee.

Rapid takeup in the north of the city

The great success which the office zones in the north of Düsseldorf experienced in recent years is continuing at a pace, and has led to a veritable renaissance of the city’s northern districts . Alongside its classic locational advantages – such as proximity to the airport and excellent motorway connections – this area boasts a wealth of newly developed construction sites which matches the high demand. In this year alone, 8 out of 13 new office developments totalling 157,800 m² GFA have been completed here.

Four major office buildings with a construction volume of around 83,700 m² have been realised on Kennedydamm alone. Sky Office, now Düsseldorf’s seventh highest office tower, has afforded the city its latest landmark and was quick to attract major tenants: renowned players such as McKinsey, Lovells and Interconsilium took up around 65% of the available office space of 37,400 m² before the building was even finished. The ground plan of Sky Office famously resembles a butterfly’s wings – and the gently sloping roof has become a characteristic element in the city’s silhouette. The building was designed by Düsseldorf-based architect, Christoph Ingenhoven.

The building located at Bennigsen-Platz no. 1 – known as ‘BP1’ – is a refurbishment project, while the ‘Four Elements’ on Kaiserswerther Straße, with its striking white facade, was newly erected on the site of a 1970s office building. Here, too, the first tenants have been found: the law firm Heuking Kühn Lüer Wojtek as well as chartered accounts and tax advisors Verhuelsdonk & Partner. As on the Königsallee and in the Financial District, the recycling of office land is well established here and provides a convincing testimony to the location’s appeal.
Both buildings were purchased by the Hamburgische Immobilien Handlung (HIH), a powerful sign of the company’s faith in the location.

The airport: youngest submarket in Düsseldorf’s office location family

Development of office space at the airport is taking place in two areas at a time: Airport City, which lies directly to the south of Terminal C, and Quartier (n), an area east of the airport that runs parallel to the A44 motorway. Following a 1½ year construction phase, Quartier(n) will see the opening of the new E-Plus headquarters this year. Its approximately 30,000 m² of rental space provides room for 1,200 office workplaces and represents the fourth large-scale office development in this area – alongside the new headquarters of C&A, Capgemini and the Airport Office on Wanheimer Straße. It brings the office capacity in Quartier(n) to 100,600 m².

Airport City has recently added two more buildings to its all-new office landscape: Airport Office III and Airgate. A total of six buildings have been constructed here within a very short period, at a pace unmatched by the city’s other office locations. The rapid development speaks volumes for the quality of the urban design which is a hallmark of this business park in the vicinity of the airport. This year, the site will witness the construction of around 49,000 m² of office space. Most of it will consist of the medium-sized office buildings up to 10,000 m² that characterise Airport City. In total, the airport location is home to around 149,600 m² newly built office space.

• The largest new building in the city centre is Hofgarten Palais at 14,650 m²
• Construction volume on Kennedydamm: around 83,700 m²
• Around 149,600 m² built at the airport

Düsseldorf remains a highly attractive location for large-scale building projects in Germany

The construction volume in Düsseldorf is likely to decrease to around 115,600 m² in 2010, following the record volume of 2009. Nevertheless, it will still be higher than the average of the last ten years.

Düsseldorf’s importance as a modern, attractive economic and real estate location will be reflected in yet more new building projects over the next few years. Major highlights, such as the development of the end of Speditionstraße and the SIGN! high-rise, both in the Media Harbour, are set to be completed next year. In addition, the sale of city-owned real estate right in the heart of Düsseldorf has freed the way for the start of the prestigious Kö-Bogen project. The project is being led by Daniel Libeskind, the celebrated architect whose vision will help create a new urban experience in the inner city. Besides, the investment of some 300 million euros is expected to create major economic momentum. And although the Kö-Bogen will not reach completion before 2013, investors regard it as a major step into the city’s future.

Even though the lively building activity over recent years has increased the base of hard-to-sell lower quality office space, any intervention designed to subject office development to a rigid “requirement plan” as a way to curb the build-up of vacancies would be contrary to the needs of potential office tenants. Businesses rely on the availability of state-of-the-art office facilities to underscore their market presence. Modernity is a mission-critical investment, not only for individual organisations, but for any community offering business opportunities. Only by insuring the availability of high-quality office space can a business centre secure its competitive edge in the national and international race to attract excellent business.

Real estate brochures by the Office of Economic Development

New real estate office space 2009 (PDF file 2.9 MB)