Upgrading assets through adaptive reuse

Across Europe, buildings stand vacant while demand for urban space keeps growing. Reimagining existing properties has emerged as a strategic response – aligning sustainability, market demand and cross-border investment logic to turn underused assets into future-ready real estate.

POST Rotterdam transforms the historic former post office on Coolsingel into a mixed-use landmark integrating retail, hospitality, offices and residential uses. © ODA Developer Omnam group

A quiet shift is unfolding in many European cities. While flagship office buildings in prime districts continue to attract tenants, a growing number of older properties, often just a few streets away or in secondary locations, remain empty or underused. In many peripheral submarkets, vacancy levels have climbed to 10% or more, significantly above those in core areas. At the same time, demand for housing, hospitality, mixed-use and life science space continues to rise. The result is a visible imbalance: not a lack of demand, but a mismatch between what cities need and what much of the existing building stock can currently offer.

Adaptive reuse has emerged as one of the most effective responses to these challenges. By rethinking existing buildings rather than replacing them, owners and investors can unlock economic potential while reducing development risk, preserving embodied carbon and strengthening urban fabric. What was once seen as a niche architectural solution has become a strategic lever for repositioning assets – and, increasingly, entire portfolios.

“Adaptive reuse has become a strategic discipline,” says Stefanie Lütteke, Partner at Drees & Sommer. “It connects market demand, regulatory requirements and long-term investment thinking – frequently across multiple countries and asset classes.”

With a background in Architecture and Construction and Real Estate Management across Aachen, Lisbon, Berlin and Helsinki, Lütteke joined Drees & Sommer in 2008. She was appointed Head of Real Estate in 2021, where she has driven the strategic development and growth of the sector. In July 2025, she was named Partner and assumed responsibility as Head of North Rhine-Westphalia. She serves voluntarily on the Executive Committee of the Urban Land Institute (ULI) Germany and acts as the Local Chair for NRW, contributing to the advancement of real estate and urban development initiatives. Her extensive experience advising cross-border, multi-use projects gives her a unique perspective on how strategic building transformations can create value, enhance sustainability, and build resilience across European real estate. 

Responding to shifting demand in European cities

“We are entering a phase where upgrading what already exists is often smarter than building new. If you approach it strategically, you reduce risk, preserve embodied carbon and create assets that are far better aligned with future demand,” says Lütteke.

A clear example is the WunderLocke aparthotel in Munich. A former 1960s office building was comprehensively transformed into a contemporary hospitality concept that integrates living, working and social interaction. Studios and suites with kitchenettes are complemented by generous shared spaces for co-working, fitness and community use, organized around a landscaped courtyard. Drees & Sommer supported the project from execution planning through procurement and implementation, helping translate the concept into a viable operational format. The project demonstrates how outdated office stock can be converted into resilient, user-centric formats that reflect new work and lifestyle models while maintaining economic viability in a well-connected urban setting.  

International capital meets local complexity

While reuse projects are rooted in local conditions, many of the investors behind them operate internationally. For these players, repurposing underused assets often involves navigating unfamiliar regulatory frameworks, heritage requirements and planning processes – making local expertise a decisive success factor.

The POST Rotterdam project illustrates this dynamic. The monumental former post office on Coolsingel, one of the city’s most prominent addresses, stood vacant for over a decade before being repositioned by international developer Omnam Group. The redevelopment combines retail, hospitality, offices and a residential high-rise with more than 300 apartments, while opening up the historic structure to the public through covered urban squares and cultural spaces.

For an internationally active investor, the challenge was not only architectural complexity, but also navigating Dutch permitting procedures, contractor selection and contractual structures. Drees & Sommer provided local project management and regulatory expertise, ensuring smooth coordination across all phases and supporting faster, more informed decision-making. POST shows how giving buildings a second life can become a viable investment strategy for cross-border capital – provided local execution is tightly integrated into the overall project governance.

“International investors need transparency and predictability, even when every market follows its own rules,” Lütteke explains. “Bridging that gap is essential for making complex reuse projects investable at scale.”

WunderLocke Munich: A former 1960s office building transformed into a flexible hospitality concept for modern urban living and work. © Edmund Dabney

Institutional reuse and circular value creation

This approach is equally relevant for locally anchored, institutionally backed projects, particularly where sustainability and long-term asset stewardship are central objectives. Here, building repositioning becomes a platform for innovation, governance and market leadership.

The ZIN project in Brussels, developed by Befimmo, is one of Europe’s largest urban mining initiatives and a flagship example of circular redevelopment at scale. The transformation of the former World Trade Center towers combines offices, co-working spaces, housing and hotel use across 110,000 square metres. Cradle to Cradle principles were applied through systematic material inventories, reuse and certification, resulting in over 1,000 tonnes of materials being reused and 140 tonnes upcycled.

Drees & Sommer, together with EPEA, collaborated closely with the client and contractors to coordinate the circular construction process, providing guidance on material passports, C2C-compliant demolition, and sustainable implementation strategies. By integrating circular principles throughout, ZIN sets a benchmark for how repositioning can achieve both environmental impact and operational relevance in complex urban projects.

From second life to future-ready assets

Across Europe, rethinking existing properties is becoming a defining theme of the current real estate cycle. It addresses vacancy, mitigates development risk and aligns with increasingly stringent ESG requirements, while also meeting the growing demand for vibrant, mixed-use urban environments.

“The future of value creation lies in using what already exists more intelligently,” Lütteke concludes. “Those who can combine local expertise with cross-border strategy will be best positioned to turn underused buildings into future-ready assets.”

As cities, investors and institutions search for resilient solutions in uncertain markets, adaptive reuse is becoming a core strategy for shaping the next generation of European real estate.