To address the huge market of renovation of multi-apartment buildings, minimal-invasive decentral serial-renovation solutions are required. One major challenge in the design of decentral heat pumps is to find the optimal balance between, on one hand, compactness and pleasant design, and on the other hand, efficiency and minimal sound emissions. A comprehensive holistic design and optimization process for the development of decentral heat pumps, from the component level, to the system level, and up to the building level, is developed. A novel façade-integrated speed-controlled exhaust air to supply air heat pump combined with a mechanical ventilation system with heat recovery and recirculation air was developed and simulated in a reference flat. Compared to a traditional supply air heat pump without recirculation, it shows only slight performance improvement, but allows significantly better thermal comfort and control, independently from the hygienic air flow rate and from the heating and cooling loads. Detailed measurement and simulation results are presented for several functional models with heating power of around 1 kW up to 2.5 kW. The design was optimized by means of CFD simulations to allow for low pressure drop, homogeneous flow, and low sound emissions. Moreover, mock-ups of innovative façade-integrated heat pump outdoor units are presented.