Win-win: flex space rentals instead of vacancies
JLL brings interests together and creates a bona fide win-win situation by renting out the former Telekom Tower in Nuremberg on an interim basis.
“From sharing ideas at our Investor Day to a tangible win-win situation for tenant and landlord – that’s exactly how it ought to be.”
Demand for flexible workplace models is growing, thanks to progressing digitalisation, the evolution from a manufacturing to a service economy, the shortage of skilled labour and the desire for a better work-life balance. This is also true for Nuremberg, currently the biggest market for flexible office space outside the Big 7. The city’s biggest provider is Design Offices, a flex space operator with its headquarters in the city that is deliberately expanding its location network in secondary cities like Hanover, Essen and Bonn. Employers are not only generally interested in providing their employees with a modern workplace, but also appreciate the ability to rent swing and backup office space at short notice. For example, when their headcount increases, but their in-house space doesn’t. This is how the former Telekom Tower in Nuremberg will be used. Its eight levels and around 12,000 m² of space will be available for interim leases of 1.5 years.
From the idea to the perfect interim solution in a true spirit of cooperation
The tower is located on the site of the former general post office at the Rathenauplatz square in Nuremberg and was used by Deutsche Telekom until mid-2019. The new owner plans to bring together various Protestant institutions to create an open ecclesiastical campus. However, all 45,000 square metres of the property will be vacant until the conversion work can begin. The owner initially thought that there was little chance to bridge this gap by renting out the space temporarily. However, it made this idea a reality by partnering with JLL – and finding the right prospect: Design Offices GmbH, whose current headquarters in Nuremberg are bursting at the seams. Its new headquarters at Nuremberg’s central station won’t be ready for occupancy until 2021. But the expanding flex space provider couldn’t wait that long. Design Offices GmbH needed space for the employees of its functional departments and for its in-house academy. It prides itself on training its people in-house, after all: Its mission is nothing less than to preserve and further raise the already high standards for the designs, furnishings, services and management of “new work” workspaces throughout Germany.
Its initial talks at the 2018 JLL Investor Day were quickly followed by concrete negotiations. The property also offers event space for up to 600 people, which fits perfectly with Design Offices GmbH’s core service concept. It didn’t take long to come to an agreement and prepare the space for occupancy. In addition to the headquarters on the tower’s 8th floor, the academy and showrooms in the building’s lower floors, the designers included room for Design Office GmbH’s flex space customers, too. Good thing, too: We had already identified the first tenant for the new work company while the lease set-up process was still in full swing. Design Office GmbH had not even moved in when it rented out space in the tower to a government agency. In the end, it rented out 550 workspaces – or over 50% of the total area – to a customer who had zero experience with the modern workplace design. Once all the questions were answered and all the costs worked out, the government officials were true believers in the merits of Design Offices GmbH’s flex space model.
New work model enables win-win situation
Rental income instead of vacancies, urgently needed premises plus income – that’s the win-win situation for the owner and interim tenant in a nutshell. It’s even a triple win for the government agency, who discovered the benefits of flex space and Design Offices GmbH’s modern approach to providing workspace. New work at its best.