Office-to-living in Munich: short-term conversion potential remains limited despite record vacancy rate (Colliers, 2026)

The report “Office‑to‑living in Munich: short‑term conversion potential remains limited despite record vacancy rate” is published by Colliers and provides an analysis of the current office‑to‑residential conversion market in Munich. Colliers, a global real‑estate services firm, combines market research with on‑the‑ground observations to assess conversion feasibility. The study was prepared as part of the Expo Real 2026 research initiative and is publicly available via the Asset Physics platform.

Munich’s office market has reached a record vacancy rate, reflecting broader post‑pandemic shifts in workplace utilisation. Despite this high vacancy, the report finds that short‑term conversion potential is constrained. Structural factors such as zoning regulations, heritage protection, and the high cost of retrofitting office buildings limit the speed and volume of conversions that can be achieved within the next few years.

The analysis highlights that Munich’s building code and land‑use plans impose strict limits on the proportion of office space that can be re‑purposed for residential use. Approval processes often require extensive environmental and heritage assessments, extending timelines. Consequently, even with abundant vacant office floors, only a modest share can realistically transition to housing in the short term.

Financial modelling within the report shows that conversion costs in Munich are among the highest in Germany, driven by construction labour rates and the need for substantial upgrades to meet residential standards (e.g., fire safety, insulation, and acoustic separation). The study indicates that, on average, conversion projects require an investment of €3,200–€4,500 per square metre, which narrows profit margins unless supported by strong market demand or public incentives.

From a sustainability perspective, office‑to‑living conversions can contribute to circular building practices by reusing existing structures, thereby reducing the embodied carbon associated with new construction. However, the report notes that the limited conversion pipeline means that the overall impact on Munich’s carbon footprint will be modest in the near term. The authors recommend targeted policy measures—such as streamlined permitting and financial subsidies—to unlock greater sustainable housing potential.

• Record office vacancy rate in Munich: 13.5 % (Q3 2026).
• Estimated short‑term conversion capacity: 0.8 % of total vacant office floor area per annum.
• Average conversion cost: €3,200–€4,500 /m².
• Potential carbon savings per converted square metre: approximately 120 tCO₂e over a 30‑year lifespan, compared with new build.

The report concludes that, while immediate conversion opportunities are limited, longer‑term prospects improve as regulatory frameworks evolve and as demand for sustainable urban housing grows. Colliers advises stakeholders to monitor upcoming policy revisions, engage early with planning authorities, and consider hybrid development models that combine new builds with selective office conversions to meet Munich’s housing needs while advancing sustainability goals.