Gap of 20 billion euros

Especially in the current phase of the market cycle, the active management of tenants and facilities is therefore becoming increasingly important. On the one hand, it is important to strengthen the income side of the properties. On the other hand, the financial outlay for property management must be kept as low as possible despite increased construction, maintenance and modernisation costs, without reducing the attractiveness of the property.

Due to the changed interest rate and market environment, refinancing requires increased interest sustainability. In most cases, refinancing is likely to have a negative impact on distributions to equity. However, the potential for rent increases in commercial real estate has recently weakened. Declining inflation rates ensure that indexed rents no longer rise as sharply. Investors and tenants are increasingly differentiating between properties depending on their location, sustainability and amenities. This differentiation will also increase the spread in the risk premiums of financiers in refinancing.

Timely preparation is crucial

In any case, investors and asset managers should look into options in good time before the loan expires in order to ensure follow-up financing. Banks and other financiers currently need much more time for credit checks. It is advisable to know about the financing offers of the banks as well as about the conditions of alternative financiers such as credit funds or financing via bonds or bonds.

One man's sorrow is another man's joy: If it is not possible to find a financing partner for a loan extension and to close a financing gap with new equity, real estate investors must consider selling their property. The seller's negotiating position, which tends to be poor, especially in the market environment, creates attractive opportunities for the buyer. In this way, buyers who act countercyclically will find a favourable time window for high-yield opportunities. The use of borrowed capital also has a return-enhancing effect on new investments.

Conclusion: Bottom in sight, targeted investments in demand

Overall, the real estate market is likely to have bottomed out by the end of 2024. Then yield and price levels are likely to stabilize. However, a fundamental, broad market revival is not expected by the end of the year. Instead, the focus for investors will be on attractive, countercyclical investment opportunities from special situations.