From a height of 180 meters, Frankfurt looks like a model landscape. Tiny even multi-story houses, cars and trees thrown in between, the S-Bahn trains run through like Märklin trains. From the 47th floor of the Grand Tower, Germany’s tallest purely residential tower, the view of the city is different.

There, a penthouse apartment is being renovated over two floors, with floor-to-ceiling windows, a roof terrace and certainly an unobstructed view. “Only the finest materials are used here,” says Jerzy Behnke, who oversaw the construction of the Grand Tower as project manager at gsp Stadtbau. Price of the apartment: around 8 million euros.

Luxury has its price

The bottom line is that the Grand Tower near the Frankfurt Exhibition Center cost around 250 million euros, reports Behnke. It offers around 450 apartments of all sizes – and residents many amenities, including a lobby with a sofa lounge and fireplace, concierge, roof terrace and a high-end communal kitchen.

So much luxury has its price. According to the broker Jones Lang LaSalle (JLL), between 20 and 30 euros rent per square meter are due for apartments in the Grand Tower, depending on the height, equipment and furnishings. According to the website, the purchase price for an apartment with 90 square meters was a good 1.8 million euros, around 20,000 euros per square meter. According to JLL, however, the tower is almost fully marketed.

There used to be residential towers for social hotspots on the outskirts. During the real estate boom, however, luxury projects such as the Grand Tower and the new Henninger Turm in Frankfurt or the Pandion le Grand in Düsseldorf emerged. Cities have become more open to residential towers, says André Adami, Head of Housing at the real estate consultancy Bulwiengesa. “They also recognized that residential towers with their small area can help with densification.”

rougher times

But the real estate boom has cooled off with the Ukraine war, rising interest rates and building prices – investors are nervous. Difficult conditions for new residential towers: “Everything that is not yet under construction is pushed in the hope of better times,” says Adami. Banks took a close look at the financing of residential towers and demanded high quotas for pre-letting or sale. “The Ukraine war in particular is causing enormous uncertainty,” says Behnke. The real estate industry first has to adjust to the rougher times.

After all, residential towers are aimed at a target group that is most likely to be able to cope with higher prices. Most of them are business people who have been living in the city for a few years, rich foreigners from Asia, for example, who invest their money in second homes, but also wealthy Germans. “Some people buy a high-rise apartment for their kids and pay in cash,” said Jennifer Panten, senior key account manager at JLL. The company markets the Grand Tower and also the nearby Eden Tower, which stands out with its green facade and, in addition to a concierge, also offers a gym for residents.

In the nervous real estate market, high-quality living space is one of the few segments that is still functioning, says Panten. For example, the Eden Tower, which is due to be completed in spring 2023, is over 80 percent marketed, including three penthouse apartments.

urban target groups

In Germany, where many people associate the dream of owning a detached house with a garden, life in a tower takes some getting used to: the view from above may be spectacular, but it can be quite drafty on the balcony on the 25th floor. People with a fear of heights are out of place there anyway. “Residential towers appeal to urban target groups who are familiar with them from their home countries such as the USA, Asia and the Arab countries,” says Adami.

But some target groups are also holding back on the real estate market. “Russian money is missing with the Ukraine war and the Chinese economy is doing worse,” says Adami. “We expect stronger demand from the US for this, since the dollar is high.”

Not exactly cheap

Many projects in Germany are 30 to 60 meters high, which is tiny compared to skyscrapers in the Arab world. High-rise buildings over 100 meters remain the exception – also because residential towers are expensive: the higher the height, the higher the costs for statics, energy supply and security. Load-bearing components have to withstand fires for a long time, foundations have to dig deep into the ground to protect against earthquakes, and elevators have to be fast.

“Residential towers are often more complex and expensive to build than expected,” says Günter Vornholz, Professor of Real Estate Economics at the EBZ Business School in Bochum. Whether planning, approval or marketing – everything is more complex than with conventional buildings. “The hype surrounding residential towers has died down,” says Vornholz. In view of the increased construction prices and interest rates, he currently sees “hardly any chance” for new projects.

A striking number of residential towers have also become permanent construction sites. There were considerable construction delays with the “Alexander Tower” on Berlin’s Alexanderplatz, and it should now be finished by the end of 2024, it was said recently. The “Upper North Tower” in Düsseldorf has also made little progress recently. The 107 meter high “Schwabenland Tower” in Fellbach near Stuttgart, which was called the Gewa Tower at the groundbreaking ceremony in 2014, was under construction for years after a number of turbulences. Behind the project is now the real estate group Adler, which has itself fallen into the crisis. Planned date of completion: end of 2024.