Structural changes in the economy, new technologies and environmental transformations: tenants are continually placing new demands on real estate. Broadly diversified corporate real estate offers the necessary flexibility
A combination of light manufacturing, warehouse, service, research and office space under one roof or on one site – the corporate real estate sector brings together mixed-use commercial property that incorporates some or all of these uses. The most common property categories are business parks, manufacturing facilities and warehouses. However, it is often difficult to make a clear distinction between them, as the areas can be combined in very specific ways. It’s important to note that, although corporate real estate often encompasses logistics properties, the sector only includes small and medium-sized warehouses (up to around 10 000 m2) as opposed to large-scale distribution centres. Manufacturing properties offer larger spaces.
As the term “manufacturing” suggests, tenants in corporate real estate engage in a wide range of activities, not just industrial ones, and these can change over time and sometimes at short notice. Corporate real estate is designed to respond to diversity and change and to support transformation. This adaptability is what makes it resilient.
Corporate real estate as a reflection of structural change
The shift in the importance of individual economic sectors in Germany is currently particularly evident in vehicle manufacturing. While there is a gradual move away from internal combustion engines and related technologies, new companies are entering the market and established manufacturers are transitioning towards electromobility. Overall, it is expected that this sector will shrink while other sectors, such as pharmaceuticals / life sciences, green technologies and robotics, will expand or emerge as a result of environmental and demographic change. For corporate real estate, this means that rising demand from other sectors is offsetting falling demand from shrinking sectors.
The growth of technology-based and research-oriented sectors is increasing the demand for space and buildings whose construction and technical equipment support modern production and research. Examples of this are a stable energy and data infrastructure as well as the possibility of building clean rooms. The necessary complexity requires innovative and tailored solution concepts from (corporate) real estate and its owners. Here it is important to find a balance between tenants and landlords. For example, the owner should provide a good level of basic technical equipment and the conditions for the tenant to further expand the space in accordance with their specific requirements. As these investment costs are borne by the tenant, the tenant has an incentive to rent the space or facility over the long term. The owner can also use specific clauses to ensure that the space is returned completely empty at the end of the lease.
ESG: added value not just for tenants
The adaptation of (corporate) real estate to fit ESG criteria has now become standard practice. For many tenants, ESG compliance is a key criterion when deciding on a property to rent. There is also the target of achieving climate neutrality by 2050 to consider. Introducing energy-efficiency measures at a property are fundamental for this. In the case of larger properties in particular, corporate real estate offers the advantage that the available space can be expanded through optimisation, renovation and further development, with no need to increase land take or resort to demolition or new construction. In addition, sites can be opened up by integrating shops, restaurants or social infrastructure such as childcare facilities.
Practical example: successful transformation of a factory building
In our property at Gross-Berliner Damm 82A in Berlin-Adlershof, an asset managed by BEOS AG, the comprehensive transformation of a factory building was completed in 2023. The building complex comprises a total of around 8830 m2 of rental space for office, laboratory, production and warehouse use. Before the renovation, the factory building, which was approximately 6500 m2, served two users as a commercial kitchen and archive storage. A new tenant has been acquired for this building plus an adjacent office block, and has set up clean room production and logistics facilities. Today, instead of the preparation of meals, this building is used to develop and manufacture optical components and systems for dentistry and robot-assisted surgery.
Ongoing adaptations through active asset management
Corporate real estate must be flexible and able to adapt to continuous change in order to be an attractive investment. A number of prerequisites apply here. For example, the structure should lend itself to conversion and the integration of new technical requirements. In addition, a location in metropolitan areas or large, economically strong cities ensures extensive rental potential. Ultimately, however, the human factor is key: active asset and property management involves staying in close contact with tenants in order to identify their needs at an early stage and to introduce appropriate measures. An investment that pays off for everyone involved.
