Bundesbank will ditch landmark HQ due to rising renovation costs

Bundesbank to Leave Frankfurt Headquarters Amid Rising Renovation Costs

Bundesbank Announces Move from Historic Frankfurt Headquarters

FRANKFURT, March 11 (Reuters) - Germany's central bank said on Wednesday it would ditch its 1970s-era headquarters in Frankfurt and buy a new site after a political storm over spiralling renovation costs.

The move, which will not affect gold reserves stored under the building, seeks to draw a line under criticism of the Bundesbank at a time of growing political pressure on central banks globally.

Economic Rationale Behind the Decision

"The economic feasibility study has clearly shown that the purchase of a property is significantly more cost-effective than leaving the Bundesbank's headquarters at their current location," Bundesbank President Joachim Nagel said.

He added refurbishing the building - a notable example of Germany’s brutalist architecture, complete with its original wood panelling and thick red carpets - would alone cost 1.6  billion euros, with a further 2.9  billion euros needed to maintain it through 2067.

Next Steps for the Bundesbank

The Bundesbank will now start a tendering procedure to find a new building.

International and Local Reactions

FED Also Under Attack Over Renovation

In the United States, a parallel cost overrun at the Federal Reserve has fuelled attacks on Chair Jerome Powell by Donald Trump's administration.

Implications for Central Bank Governance

While Germany’s political climate makes such open confrontation unlikely for now, the cost overrun raises questions about governance and budget discipline at the Bundesbank.

The central bank will leave the 1,710 metric tons of gold it stores in security vaults under the building where they are.

The City of Frankfurt has expressed interest in buying the building to house the European School, which mostly serves the children of European Central Bank staff.

Cost Overrun and Project History

Origins and Escalation of Renovation Costs

Launched in 2016 under then President Jens Weidmann, the Bundesbank's renovation started in 2022 after staff moved to a provisional office.

But costs surged due to inflation, toxic‑material removal and landmark‑protection hurdles.

Audit and Project Adjustments

A report by Germany's audit office put its costs at 4.6 billion euros by 2022, around one billion more than the original estimate, according to financial newsletter Platow Brief.

Nagel later slashed the scope of the project, cutting planned workspaces to about 3,000 from 5,000 as hybrid working took hold after the pandemic.

($1 = 0.8616 euros)

(Reporting by Philipp Krach and Francesco CanepaEditing by Gareth Jones )