Will the pandemic spell the end of office life in Germany?

Office buildings across Germany have remained largely empty since the outbreak of the coronavirus pandemic. But will the shift to home office mean the end of the traditional office job?

Will the pandemic spell the end of office life in Germany?
Will fully occupied office buildings like those in pictured in Hesse in 2018 be a thing of the past? Photo: DPA

Despite the rising number of people working from home due to the coronavirus pandemic, it seems that office buildings are still here to stay in Germany. 

While companies have rented out significantly fewer new office spaces compared to before the pandemic, there’s no evidence to suggest that companies are cancelling their previously existing contracts. 

Economists, estate agents and management consultants expect the coronavirus pandemic to have long term effects on working life, but what exactly these effects will be remains unclear.

Before the pandemic, far fewer Germans worked from home than other European countries. Since March, however, the amount of people doing so has more than tripled

There are doubts, however, as to whether this dramatic increase will stay the same over the long term.

READ ALSO: Will working from home become the norm in Germany post coronavirus?

Uncertain times 

According to data from Savills, one of the world’s leading property agents, companies rented out significantly less office space than normal in the second and third quarter of this year. 

Only half a million square meters were rented out in Germany’s seven largest cities, compared to the quarterly average of one million square meters. 

“Large companies in particular are holding back from signing new rental contracts, the only exception being the public sector,” says Michael Pink, head of market monitoring at Savills' German subsidiary company. 

But does this mean that companies no longer need any office space? Not at all. “Lots of companies would rather just extend their existing rental contracts at the moment”, said Pink. 

“The amount of empty office space has increased for the first time since 2010, but only slightly. In fact, there are more occupied office spaces in the seven largest cities than there were at the beginning of the year.”

Landlords also have little to no desire to terminate rental contracts, even if tenants are experiencing financial difficulties, because given the circumstances it would be difficult to find new tenants to replace them.

Working from home has become far more common in Germany since the outbreak of the coronavirus pandemic. Photo: DPA

“At the moment the most important thing for landlords and property owners is to remain stable and see the crisis through until we finally reach a ‘new normal’”, said financial market expert Philipp Wackerbeck from Strategy&, the consulting agency for the international auditing company PwC. 

“As a landlord or property owner you’ll do anything to keep your existing property, even if that means going without full payments from tenants. Many real estate agencies have significant financial reserves, so they can deal with less income for a while.”

The death of the traditional office?

And what will the pandemic mean for companies in the long term? Some are saying that the office is an outdated workspace that is destined to die out. 

READ ALSO: Germany considers tax advantages of working from home

“The topic is strongly debated, but the truth is that no one knows what will happen”, said economist Ralph Henger from the German Economic Institute in Cologne (IW).

Siemens, headquartered in Munich, is just one of the many large companies allowing some of their employees to work from home even after the pandemic is over. Their ultimate aim is to have their employees working from their home office two or three days a week. 

Whether the company will need less office space in the future as a result remains to be seen, according to a spokesperson for the real estate company of the Munich-based Dax group.

Siemens isn’t the only company faced with these questions. “In the future many companies will most likely need less office space, because their employees are working from home more often”, said management consultant Wackerback.

“However, there may not be a direct correlation between the two, because even after the worst of the pandemic, employees will probably need to be spread across a larger space than before to comply with distancing regulations and other restrictions.”

Looking to the future

The long term effects of the pandemic have yet to be properly investigated.

“Office buildings are not all the same, their desirability also depends on the location”, added Wackerbeck.

“Property, whether it be offices or apartments, are more stable in value in popular locations compared to less desirable ones.”

The demand for offices has already started to pick up again in the past couple of months, says Henger, an economist from IW Cologne.

“The shift to home office may become important in the future, but so far it has hardly had any noticeable effect.” Many companies are structured in such a way that a sudden shift to home office is not possible. 

READ ALSO: Home office makes employees more effective and happy, German study finds

People’s attitude to home working will also play an important role. Long-held preconceived ideas that employees are less productive when working from home will not disappear overnight.

Some companies simply don’t want to be that flexible, Henger believes. “They prefer to have their employees come into the office.”

It remains to be seen how the demand for offices will change in the coming years, but Henger believes that “economic trends will play the most important role here.”

The pandemic will in all probability have a long-term effect on the way employers run their companies – but it is not yet possible to say exactly what that effect will be. 

“Some things will definitely change, but the adjustment process will take many years,” says Savills expert Pink. 

“The more important question is what the office of the future will look like and where exactly it will be.”

Translated by Eve Bennett.


Member comments

  1. Well we can certainly say the plandemic will be the cause of many, many small Businesses being destroyed, along with all those jobs lost, that will never come back.
    We are headed.for dark times.

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Covid face mask rule on flights in Europe set to be eased

The mandatory EU-wide mask requirement for air travel is set to be dropped from Monday, May 16th, but airlines may still require passengers to wear masks on some or all flights

Covid face mask rule on flights in Europe set to be eased

Europe-wide facemask rules on flights are set to be ditched as early as next week in light of new recommendations from health and air safety experts.

The European Union Aviation Safety Agency (EASA) and European Centre for Disease Prevention and Control (ECDC) dropped recommendations for mandatory mask-wearing in airports and during flights in updated Covid-19 safety measures for travel issued on Wednesday, May 11th.

The new rules are expected to be rolled out from Monday, May 16th, but airlines may still continue to require the wearing of masks on some or all of flights. And the updated health safety measures still say that wearing a face mask remains one of the best ways to protect against the transmission of the virus.

The joint EASA/ECDC statement reminded travellers that masks may still be required on flights to destinations in certain countries that still require the wearing of masks on public transport and in transport hubs.

It also recommends that vulnerable passengers should continue to wear a face mask regardless of the rules, ideally an FFP2/N95/KN95 type mask which offers a higher level of protection than a standard surgical mask.

“From next week, face masks will no longer need to be mandatory in air travel in all cases, broadly aligning with the changing requirements of national authorities across Europe for public transport,” EASA executive director Patrick Ky said in the statement. 

“For passengers and air crews, this is a big step forward in the normalisation of air travel. Passengers should however behave responsibly and respect the choices of others around them. And a passenger who is coughing and sneezing should strongly consider wearing a face mask, for the reassurance of those seated nearby.”  

ECDC director Andrea Ammon added: “The development and continuous updates to the Aviation Health Safety Protocol in light of the ongoing Covid-19 pandemic have given travellers and aviation personnel better knowledge of the risks of transmission of SARS-CoV-2 and its variants. 

“While risks do remain, we have seen that non-pharmaceutical interventions and vaccines have allowed our lives to begin to return to normal. 

“While mandatory mask-wearing in all situations is no longer recommended, it is important to be mindful that together with physical distancing and good hand hygiene it is one of the best methods of reducing transmission. 

“The rules and requirements of departure and destination states should be respected and applied consistently, and travel operators should take care to inform passengers of any required measures in a timely manner.”