(WAZ, 6 June 2023) Many properties no longer meet modern standards. Owners need to invest.

The coffee machine works, as does the dishwasher. Otherwise, no one has worked for some time in the long office room where Sharif El Omari is standing; no one has sat at the white conference table or at any of the desks. It is a so-called showroom, designed to show prospective tenants what can be done with an office building that is showing its age: install glass partitions, move walls, lay high-quality flooring, and furnish it with modern furniture. No visitor would guess that the building is almost 35 years old. The many small radiators on the walls and the slightly lower ceilings might be the only clues.

This is the 10th floor of the striking office building at Gildehofstraße 1 and 1a (two street numbers). It was built in 1990 by Hypothekenbank in Essen AG, whose long-time chief Hubert Schulte-Kemper is currently in the headlines over the insolvency of his company Fakt AG. Essen Hyp is long gone; what remains is the office complex at Varnhorstkreisel in the city center. Since 2013, the property has belonged to Ashtrom Properties Germany GmbH, which now plans to bring it up to date with a multimillion-euro investment. Sharif El Omari is the manager responsible.

Gildehofstraße 1 is being upgraded for energy efficiency

More than 9,000 of the building’s total 10,100 square meters of office space will soon be vacant in the 16-story tower when energy company Eon’s lease expires at the end of June. What do you do when the largest tenant leaves all at once? El Omari sees an opportunity to “redevelop the property as a whole.” New furniture and a fresh coat of paint will not be enough. Above all, the building needs an energy-efficiency upgrade.

Tobias Altenbeck, Managing Director at brokerage Brockhoff, is overseeing the letting. He knows that since energy prices soared, office tenants have been paying particularly close attention to service charges. El Omari wants to show that costs can also be kept low in existing buildings: “We are making the most of what the existing property allows.” Ashtrom Properties Germany plans to invest a total of €10 million in the building.

Several measures are planned: LED lighting will be installed throughout, and blinds will provide sun protection. Radiators will be equipped for direct control. The existing ventilation system will operate more efficiently. El Omari estimates that all these measures could save around 40% in energy. Photovoltaic elements may also be installed on the facade, though this is still being evaluated.

Of course, energy modernization of existing buildings also has its limits.

El Omari acknowledges that an existing building cannot match a new build in energy performance. However, if the full CO2 emissions generated by constructing a new building is considered, an older property can still compete.

As with the Gildehofstraße 1 office building, many offices across Essen are currently vacant—more than 230,000 square meters. Last year, vacancy reached 7.3%, its highest level in many years. The reason: major corporations such as Eon and Thyssenkrupp are restructuring, while RWE and Aldi have recently built new headquarters.

Many of the vacated spaces are showing their age. For broker Tobias Altenbeck, Gildehof 1 is therefore a good example of how investing in existing properties can pay off. “When owners invest, we see properties in good locations like this one succeed,” he emphasizes.

Call center operator Regiocom moves into the complex

He and El Omari report strong demand for the offices. “We are in numerous promising discussions.” One prospective tenant would occupy 60% of the tower on its own. The average net rent is €12.50 per square meter, significantly below the level for new-build space.

El Omari has already secured the first new tenant in the refurbished premises: call center company Regiocom has leased around 2,000 square meters in the six-story L-shaped building for its 300 employees in Essen. The central location and modern space concept were important factors in the decision to move its service center from Bredeney to the city center. Regiocom celebrated the opening of its new location last week.