Europe Obsolescence Equals Opportunity

Definitions:

In this study, we analysed 218 million square metres (sqm) of office stock in 14 markets in 11 countries across Europe, placing the stock into categories we refer to as “the top,” “the bottom” and “the middle.” Whilst recognising that every individual office building has unique characteristics and not all of them fall neatly into the criteria we use to define the top, the bottom and the middle, we believe that most of the office stock as it exists today can be grouped into these three categories as defined below:

DEFINING THE TOP, MIDDLE AND BOTTOM OFFICE TIERS

100%

The Top • Buildings that are less than 10 years old and were typically previously unoccupied or have undergone significant redevelopment. • Top sustainability ratings. • Outdoor space. • Versatility of space: core working space, dynamic meeting areas, conference spaces, flexible o ce/coworking. • Easily accessible, with multiple transportation options and access to desirable amenities such as retail, cafés, gyms. The Middle • Buildings that are 10-30 years old. • Space that only marginally meets some of the criteria listed above in the “top” category. • Space that has previously been occupied and may or may not have been renovated recently, but still requires upgrading to satisfy occupier requirements and environmental regulations (where they currently exist). • Space that is not always easy to split, adapt or reconfigure to changing business needs. The Bottom • Buildings that are 30+ years old. • Does not meet any of the criteria listed above in the “top” category. • Has not been significantly renovated in more than 10 years.

90%

24%

80%

70%

60%

50%

62%

40%

30%

20%

10%

14%

0%

Source: Cushman & Wakefield Research (Data as of year-end 2022)

6 | OBSOLESCENCE EQUALS OPPORTUNITY