The trough is bottoming out - get into real estate now to build and increase your wealth
The German real estate climate reveals exciting dynamics: While there seems to be little movement on the market, the players in the background are preparing to become active again. The decline in long-term interest rates and the expectation of an imminent reduction in the key interest rate by the ECB are decisive factors.
In the midst of this apparent paradox, prime rents in the A markets continue to rise inexorably. Our forecasts show an increase of 1.3 % per year until 2027. Occupiers are already increasingly moving to peripheral regions as good space is in short supply and demand far exceeds supply. We expect annual rent increases of 3.1% and a market value increase of 18% by 2027.
The current momentum on the investment market signals an upswing. Constraints and liquidity requirements are bringing movement to the transaction market, while at the same time interest rate security is increasing. This development is fueling the willingness to invest and opening up attractive entry opportunities for potential investors that are waiting to be exploited.
Consolidation continues unabated in the area of project development activities. The development of existing buildings remains a central focus here. At the same time, however, there are signs of a shrinking pipeline, which increases the market opportunities for new buildings and creates space for innovative projects.
Demand for space is currently only influenced by a few stimuli from the overall economic environment. Nevertheless, companies are increasingly being prompted to rethink their work concepts and locations. The possibility of relocating is being examined intensively, which is another factor influencing the real estate market.
Overall, these developments reflect a time of change and opportunity, where investors and developers alike are finding ways to expand their portfolios and tackle new projects. With our selected off-market real estate projects, they have the opportunity to enter the market with confidence. You can find out exactly what this looks like in our Real estate strategy webinar. Click here to watch.
Kind Regards,
Matthias Holzmann
