Rising automation may be reducing demand for traditional office space across Europe, leading to higher vacancy rates and unused properties. Repurposing or expanding the use of vacant office space can help address these challenges while also offering new investment options.
AI is driving rapid workplace change across Europe. With an increasing number of office-based jobs being automated, companies may need far less office space than in years past. This has already led to a significant increase in vacancy rates in, especially in European cities’ central business districts (CBDs). In the Paris region, for example, over 5.6 million square meters of office space currently sit empty. This trend of office vacancy shows no sign of letting up, as the automation of office-based tasks continues to ramp up.
One strategy to address this glut of unused office space is the conversion of office buildings into residential or mixed-use spaces, combining housing with amenities. After such a conversion, Frankfurt’s Lyoner Quartier, once a district filled with empty offices, has become a thriving neighborhood with more than 3,000 apartments alongside daycare facilities, parks, and cycling infrastructure. As vacancy rates rise and new sustainability standards are introduced, many cities now see a practical solution in reconfiguring unused office space to serve other purposes, such as housing and mixed-use projects.
Adapting Vacant Offices Can Help Meet Growing Housing Demand
Office conversions offer a practical solution for cities dealing with both rising vacancy rates and housing shortages. According to Bernardas Preikšaitis, COO of InRento, a platform that connects investors with real estate projects across Europe, such projects can breathe new life into spaces that are otherwise difficult to fill.
“Most of the vacant office space is in central business districts, where housing demand stays high but available supply is limited,” Preikšaitis says. “When developers convert old office buildings into homes, boutique hotels, or public-use spaces, cities benefit twice, by addressing empty building stock and shortages in affordable living or amenity space.”
Regulation is also adding pressure to the situation across the EU. Starting in May 2026, member states must apply new minimum energy performance standards to underperforming non-residential buildings, as dictated by European Commission rules. For owners of older offices, it’s become a question of either modernizing buildings through energy upgrades and conversions or accepting declining value, as their assets become less attractive to both tenants and investors.
Conversion as a Real Estate Investment Opportunity
For investors, these conversions offer a way to avoid some of the risks tied to underused or outdated office buildings. “Residential is becoming a safer investment than traditional office real estate in many cases,” says Preikšaitis. “Some offices will survive and even thrive, but only buildings with strong location, good energy performance, and flexibility. More investors now focus on whether an office can be adapted or split up for new uses if demand changes.”
He notes that conversion projects funded through the platforms like InRentro often show shorter completion times and can yield a stronger return on investment, as the pricing comes from new residential or mixed-use demand rather than legacy office leases.
Looking ahead, real estate and finance companies will need to judge every office building not only on current rents but also on its future potential for other uses. Developers who invest in retrofitting older buildings for housing or neighborhood needs will often find these moves deliver higher and more stable value. It signals a shift away from speculative, single-use assets and toward flexible models that match changing market realities and tougher European standards.
Spencer Hulse is the Editorial Director at Grit Daily. He is responsible for overseeing other editors and writers, day-to-day operations, and covering breaking news.
