Back to the overview
Press article
from FAZ
04
.
09
.
2020

Home office: New savings potential for companies?

Experts are still far from certain: Is home office the next big trend or will we return to the traditional office space once the Covid-19 pandemic is contained? What is your opinion?

Experts are still far from certain: Is home office the next big trend or will we return to the traditional office space once the Covid-19 pandemic is contained? What is your opinion?

I am sure that the home office trend is going to be more important than ever before and will therefore permanently transform the office market. Big multi-national companies like Google and Vodafone are spearheading the change. Now, German companies follow suit. Going forward, Siemens, for example, will allow more than 140,000 of its employees to work from home two or three days a week. A model like that results in a significant savings potential for companies: office space is notoriously expensive, especially in prime locations such as central business districts (CBD). In the seven biggest German cities, the average price per square meter of office space is 25 EUR and more, and in prime locations in Berlin, Frankfurt am Main and Munich even up to 40 euros. A 300 square meter office for 20 employees at Berlin Alexanderplatz thus costs more than 100,000 EUR per year.

In your opinion, what effects on the housing market are already visible today?

The Covid-19 pandemic and the related lockdown are going to transform how people perceive living space in Germany. Before the Corona-crisis, the primary concern was to optimize space utilization to maximize the lettable area considering expensive land prices and high construction costs. The continuing crisis shows that traditional concepts for living space need re-thinking and transformation into enhanced concepts. Property developers will realize these changing demands in new project developments. We have also seen further increase in housing prices over the first half of 2020. A slow-down or even dip in residential real estate prices still seems unlikely in the foreseeable future. The housing market is proving to be more resilient than the office and retail real estate markets. Yet, the high price levels in city centres make it ever more difficult for many people to afford property in central locations.

What is the distance limit to move into suburbs or even to the countryside?

There is no general answer to this question. Instead of an absolute number of kilometres, the connection to public transport and effective travel time into the city are key considerations. The home office trend is likely to increase the acceptance for longer commuting distances to work. Those who now only need to commute twice or three times a week are willing to accept longer distances. The Corona-crisis might result in broader suburban areas around cities. However, not everyone will be tempted to move to the suburbs or countryside. Especially young adults and young professionals prefer to live in the city centre: diverse social and cultural opportunities in the cities trump a bigger apartment size or having an own garden.

Who are the winners and losers of the Corona-crisis considering the real estate market?

The Corona-crisis has already had a severe impact on the hotel and retail sectors. Yet, we expect a gradual recovery in the hotel sector. For investors in the real estate sector, the asset class “residential” is making a comeback as a safe haven and has replaced “office” as the most recently preferred asset class. As far as financing is concerned, the market currently offers great opportunities for alternative real estate finance providers other than traditional banks. During the Corona-crisis, banks have become more restrictive: Especially in commercial property financing there are discounts of up to 30% on lending levels. In addition, we observe longer process times for financing requests. Therefore, project developers often accept higher interest rates of alterative real estate finance providers.

Source:
F.A.Z. of 04.09.2020 by Michael Psotta

© All rights reserved. Frankfurter Allgemeine Zeitung GmbH, Frankfurt. Provided by Frankfurter Allgemeine Archiv.

Further articles

Press article
18
.
06
.
2020
'Prices have not collapsed'

A yield of 5 to 10 % for the provision of subordinated debt capital, still 3 to 4.5 % for a senior tranche - the figures presented by David Neuhoff, founder and CEO of Linus Capital in an interview with the Börsen-Zeitung, make it clear why his investors include insurers, pension funds and smaller banks as well as wealthy private individuals.

Find out more
Press article
14
.
10
.
2020
Handelsblatt Fintech Newsblog: Real estate investment start-up Linus Capital wants to build its own investment platform

Linus Capital intends to invest a mid single-digit million euro amount from its own resources in the expansion of its own digital investment platform. This was stated by Chief Operating Officer Dominik Pederzani in an interview with the Handelsblatt.

Find out more
Press article
12
.
10
.
2020
"Investments in core locations remain attractive"

Which areas of the property market have come under the most pressure in the Corona crisis? Which sectors have benefited?

Find out more
You are currently on the EU website of LINUS Digital Finance. If you want to view our products as a UK investor, please click the button below.
Go to UK website
continue with EU page