Author: Johannes Hermanns, Managing Director, Real Estate Management
Investing in existing properties secures long-term returns and competitiveness for open-ended real estate funds.
Modernisation, ESG standards and smart technology boost occupancy rates and portfolio quality.
In a constantly changing world, where sustainability, quality and efficiency are increasingly important, open-ended real estate funds face the challenge of developing their existing portfolios so that they remain future-proof and retain their value. A key task for an asset manager is not only to preserve the value of the properties but to actively increase it. This is achieved through targeted investment in existing properties, which benefits both tenants and owners.
Long-lived assets
Properties are long-lived assets that are used for decades. The requirements placed on buildings are also subject to change over time – tenants today expect not only functional spaces but also a high level of comfort, modern technical standards and sustainable solutions.
We therefore keep a constant eye on each property’s life cycle: How is this sub-market developing? Are the facilities and the layout of the premises appropriate for the location? Are we attracting the desired occupiers?
The answers to these questions, taken together with the economic age of the property in question and its technical specifications, determine the level of investment in existing properties. In this way, we not only safeguard the competitiveness of the properties but also create added value for tenants and investors. A well-maintained and modernised building is not only more attractive to existing and potential tenants but also contributes to the long-term increase in the portfolio’s value.
Exceeding expectations
Occupiers of office properties in the core segment attach great importance to quality and expect an appropriate building standard. This applies both to the fit-out of the premises and to the overall design of the building. International companies expect modern workspaces and meeting rooms that meet their corporate standards and requirements. An inviting atmosphere, pleasant working conditions, flexible use options and a high-quality fit-out are key factors here. As a property owner with a long-term perspective, our aim is not only to meet these expectations, but to exceed them.
Another important consideration for tenants in core properties is ESG (Environmental, Social and Governance) compliance. Sustainability is no longer merely an optional feature, but a fundamental prerequisite for the long-term success of a property portfolio. Modern buildings must comply with current environmental standards in order to minimise their carbon footprint and to meet the requirements of tenants and investors. This includes, amongst other things, energy-efficient building services, the use of renewable energy and the reduction of resource consumption.
A building is more than just a place to work or live – it is a living environment.
We want our international tenants to feel at home in our properties and to enjoy using the premises. A positive user experience not only boosts tenants’ satisfaction but also strengthens their loyalty to the property.
Furthermore, targeted investment in existing properties can improve the performance of the assets. Modernised buildings with a high level of comfort and sustainable standards are not only more attractive to tenants but also generally command higher rents. Our experience shows that many tenants are prepared to pay a reasonable rent for a high-quality, sustainable property. Ultimately, this also benefits our investors, since it can increase the fund’s return.
Modernisation takes priority
A key element of our strategy is to pursue sustainability goals without relying on demolition and new-build projects. Preserving existing structures not only conserves resources but also makes economic sense. This is why we focus on targeted modernisation measures that reduce energy consumption and take environmental impact into account.
The energy-efficiency measures we implement as standard include optimising properties by installing control systems in the building management system, using environmentally friendly equipment, upgrading the building envelope and façades, and switching to a sustainable energy supply. Optimal control of the technical systems reduces energy consumption on a lasting basis.
Added value for investors
In addition, intelligent systems use smart data technologies to enable efficient control and monitoring of energy consumption. The use of modern heat pump technology helps to reduce energy consumption sustainably and to manage existing properties in a resource-efficient way. The use of climate-friendly green electricity and green district heating has a direct positive impact on CO₂ emissions. These measures not only improve the energy efficiency of our buildings, but also make them more attractive to tenants and investors.
By investing in our existing properties, we create added value for our investors. At the same time, these factors contribute to the stable performance of our open-ended real estate funds and a high occupancy rate of around 94 per cent. Our strategy of sustainably modernising existing buildings and adapting them to the demands of the future is paying off. We increase the value of our properties and improve tenant satisfaction. At the same time, we are safeguarding the long-term competitiveness of our portfolio and are building the foundations for sustainable growth.
Deka Immobilien remains committed to meeting high standards of quality and sustainability. This is the only way we can meet the needs of our tenants and investors and contribute to a sustainable real estate industry.
The article ‘Investing in existing properties pays off’ first appeared on 6 March 2026 in the MIPIM supplement to Börsen-Zeitung, page 4.