Why height still matters: the 2026 case for the European tower

TL;DR

• Europe holds five of the world's hundred tallest buildings, unchanged on the year, and the tallest completion anywhere in the European Union in 2025 reached 233 metres. On volume, the European tower is a rounding error.
• The case rests on scarcity instead. Prime CBD vacancy across Europe is estimated near 2%, prime rents are up 27% since the end of 2019 against 9% for secondary CBD stock, and development completions fall to 2.7 million sq m by 2027.
• Our verdict: the 2026 case for height is real, narrow and delivery-constrained. Land scarcity in perhaps a dozen CBDs justifies it. Refurbishment, not new height, will capture most of the rent.

Start with the count, because it settles one argument quickly. The world completed 2,593 buildings of 200 metres or more through 2025, with another 389 under construction, according to the Skyscraper Center database maintained by the Council on Vertical Urbanism, whose 2026 trends report published on 9 February. Europe accounts for five of the world's hundred tallest, unchanged from 2024, against 62 in Asia and 18 in the Middle East. The tallest building completed anywhere in the European Union last year was FOUR Frankfurt T1, at 233 metres over 59 floors, which ranked 55th on the global completions list for 2025.

So the European tower is not a volume story and never will be. It is a land story, and in 2026 the land argument is stronger than it has been since before the pandemic. That is the proposition this Dive tests, starting with Europe's tall-building map.

Land scarcity is the argument, and it has tightened

Height is a response to land price, and an expensive one. Gabriel Ahlfeldt and Daniel McMillen, in their LSE working paper on Chicago height and construction-cost elasticities, put the per-floor-space construction cost of a 50-floor building at about three times that of a 10-floor building, with cost rising exponentially in height. A tower clears that hurdle only where central land is scarce enough to pay for it.

In European CBDs, that condition has tightened rather than eased. Savills, in its European office leasing spotlight published on 18 August 2026, reports average vacancy stable at 9.4% in the second quarter, CBD vacancy at 4.9%, and prime CBD vacancy estimated at around 2%. Prime rents rose 3.7% over the twelve months to that quarter, led by Munich at 11%, with Frankfurt and Warsaw both at 10%. Paris CBD is the counter-example: vacancy there rose to 6.8%, breaching 6% for the first time since 2009.

Supply is the other half of the squeeze. Savills expects European office development completions to hold at 3.5 million sq m in 2026, 28% below the 2022 peak, then fall a further 23% to 2.7 million sq m in 2027. Only 1.5% of the two-year pipeline is speculative, down from 3.0% four years ago. Nothing in that pipeline reverses before 2028.

The payback period for a landlord to turn secondary into prime has fallen from ten years to five.

Mike Barnes, Director, European Research, Savills

The premium is real, and it stopped widening ten years ago

This is where the pro-tower case gets uncomfortable, and where most height pitches quietly skip a line. Savills measures the average prime rental premium over the MSCI top quartile at 38%, and it has been stable since 2015. Occupiers are paying the same premium for prime that they paid a decade ago. What has moved is the discount on everything else.

London City is the clean illustration. Prime rents there are up 49% since 2019 while secondary rents have fallen 19%. That is a brown discount rather than a green premium, and it points capital somewhere other than new height. Savills calculates that the payback on a comprehensive CBD refurbishment turning secondary stock into prime has fallen from ten years to five, and by roughly a third across continental markets. A five-year payback on a standing asset competes directly with a seven-year development on a new one. That comparison is the substance of the economics of height and of when a tower ages.

Delivery, not demand, is the binding constraint

The occupier question is the honest weak point. JLL's Global Occupancy Planning Benchmark Report 2026, published on 19 May and drawn from 84 organisations covering 716 million sq ft, puts global office utilisation at 56%, up from 54% in 2025 and 49% in 2024, still short of the pre-pandemic 61%. Every region has gained ground since 2023 except EMEA, which fell three percentage points to 55%. Structure is hardening around it: 62% of organisations now mandate a fixed number of in-office days, up from 49% a year earlier, and 70% of employees attend three to five days a week.

London's planning record shows the same ambivalence. The New London Architecture Tall Buildings Survey 2026 counted 46 applications for buildings of 20 storeys or more in 2025, down from 64, with 45 schemes gaining permission. Of the new applications, 91% were residential or predominantly residential and only 9% were offices, a figure Sandra Jones of PriceHubble calls a stark reminder of how the balance of activity has shifted. More than 270 tall buildings completed in London between 2014 and 2024. Starts and completions have since slowed on viability, funding and the Building Safety Act.

The commercial core moved the other way. The City of London Corporation reported in February 2026 that more than half a million sq m of office space won planning permission in the Square Mile during 2025, about half of it already under construction, with roughly 30 major commercial schemes on site. Permission is not the constraint. Getting out of the ground is. That gap is the whole of London's tall pipeline and its politics, and the reason height rules and view corridors settle as many towers as spreadsheets do.

This year's data clearly highlights the growing gap between planning activity and delivery.

Callum Tuckett, Managing Director, Multiplex

Carbon is the weakest objection on the evidence

Carbon stops more European towers than any other argument, and it is the one the research supports least. Avery Hoffer, Evan Bentz and Shoshanna Saxe, publishing in Resources, Conservation and Recycling (volume 227, March 2026), modelled reinforced-concrete residential buildings between 5 and 20 storeys. Adding a storey raises embodied greenhouse gas emissions by about 1% per storey, inside their margin of error. Cutting slab thickness by 25 mm saves about 9%, which they find equivalent to an eight-storey change in height. A 50 mm increase in slab thickness outweighs a 15-storey increase in height.

Read that as a redirection rather than an absolution. Height is not free, but the decisions that move embodied carbon are invisible from the street, and the planning debate is largely aimed at the wrong variable. The retrofit-versus-new-build question is the one that bites, and it is handled in carbon and the tower.

Who gains, who pays

Winners:

• Landlords holding refurbishable secondary CBD assets, where the payback on turning secondary into prime has halved since 2019.
• Occupiers already sitting in prime space on long leases, insulated from a market with roughly 2% prime vacancy and a shrinking pipeline.
• Warsaw, Munich and Frankfurt landlords, at 10% to 11% prime rental growth in the year to Q2 2026.
• Contractors and engineers on the roughly 30 major City of London schemes already on site.

Losers:

• Developers holding consented but unfunded height, where construction cost inflation and a 2028 financing window do the deciding.
• Owners of unrefurbished secondary offices, notably in London City, where secondary rents have fallen 19% since 2019.
• Cities counting on tall buildings for housing delivery. NLA calculates that every residential tall building permitted in London in 2025, delivered inside a single year, would supply about 10% of the capital's 88,000-home annual target.
• Anyone underwriting a European tower on rental-premium expansion. That premium has not widened since 2015.

What actually decides it, and what to watch

Where European towers do get built, they answer something other than a height ambition. Varso Tower in Warsaw stands at 310 metres over 53 floors with 70,000 sq m of lettable area, and its owner HB Reavis describes it as the tallest building in the European Union. The more useful fact is that it sits beside Warsaw Central Station. Density placed on top of transit is the pattern behind Warsaw's skyline, and it is the only version of the argument that survives contact with a planning committee.

London's answer arrives on a longer clock. One London, the rebranded 1 Undershaft, will rise to 309.6 metres and become the joint-tallest building in western Europe alongside The Shard, according to Property Week on 2 June 2026. Construction is planned from 2028 once development financing is secured, with completion targeted for 2033, and the scheme will reuse the existing basement and foundations to cut embodied carbon.

Three markers decide the next two years:

1. Savills' 2027 completions figure of 2.7 million sq m. If it holds, prime rental growth outruns the 3.7% recorded to Q2 2026 and the development case strengthens on scarcity alone. 2. The 2028 financing decision on One London, the clearest single read on whether western Europe's tallest consented office can actually be funded. 3. The next NLA survey in early 2027. If the office share of London's tall-building applications stays below 10% for a third year, the European tower becomes a residential and mixed-use product, and the office tower becomes a City of London speciality rather than a European one.

RealTimes puts that question to the people who build them in the Dialogue of Skyscrapers series, and across the Skyscraper Day Dive.