Share of European CBD Offices Bought for Conversion at 14-Year High

The proportion of European city-center offices bought for conversion or renovation reached the highest level in 14 years in the first half of 2026 as investors continue to adapt their approach to the asset class amid the challenges posed by accelerated obsolescence and evolving occupier requirements.

The share of offices in central business districts (CBDs) purchased for transformation rose to 17% of all CBD sales in H1 2026, slightly ahead of the share in 2024 and above the long-term average of 13%, according to MSCI Real Capital Analytics data.

Some new owners appear willing to inject capital into legacy office assets where the property can be brought back to grade-A standard — a segment of the market that’s benefiting from stronger occupier demand — or, where the location and building fabric allows, they are converting to other use types.

The increase in offices bought for redevelopment reflects a similar pattern seen when the market started to recover from the 2008 global financial crisis. This echo suggests that there may also be a degree of cyclicality to the shift. The early stages of a recovery after prices have softened considerably can also be the time to take on more risk, with buyers also now looking to exploit the growing stratification of the office market.

Residential and hotel are the primary new uses and account for more than 70% of the known office conversions from 2022 through H1 2026, our data shows. Recent deals in the MSCI Real Capital Analytics database include the March 2026 acquisition of the former Allianz offices in Berlin to create Europe's largest hostel with 2,500 beds and the January 2026 sale of Peninsular House in the City of London for conversion to a 260-key hotel.

The structural and cyclical challenges facing offices mean that conversion and redevelopment activity will likely remain an important feature of the market, even as aggregate deal volumes have slowed. Owners and buyers of older stock will face decisions on whether to refurbish the properties or change their use; in the latter scenario, we believe residential and hotel are likely to remain the main conversion candidates.