In this year’s spring report of the real estate experts, we once again analyse commercial, office and logistics properties, corporate real estate and hotel properties. Our analyses and recommendations derived from them support the cautious upward trend of the industry.
The Deutsche Hypo real estate climate shows a positive picture: there is an upward trend in almost all segments. The living climate is close to the all-time high, and the office is also holding the lantern in this regard – despite the rising index. Slight optimism is spreading: “Investor interest has increasingly shifted to logistics and residential real estate, which are perceived as more crisis-proof and income-stable asset classes,” notes Sven Carstensen.
The office market has undergone many profound transformations in recent years. The outlook remains bleak: “Turnover in the office segment remained at a stable, but low level.” Office space take-up fell by 4% compared to 2023 in Germany’s 127 largest office markets. The changed market and cost situation is leading to a declining project development volume. Vacancies continue to rise: 11 million square metres with a rate of 5.6%. In contrast, the rental price development for office space is observed. (Prime) rents continued to rise in 2024. However, this only applies to prime locations, new buildings and properties with above-average quality.
What about the other segments?
In the case of logistics real estate , the continuing restraint is reflected in a decline in demand for space in 2024, although in the catchment area of large cities it can be said to be full occupancy. Yields have not risen as sharply in 2024 as they did in 2023. Rents for logistics properties rose continuously.
The market for hotel real estate is stabilizing. Major events such as the European Football Championship are offset by high operating costs, energy prices and salaries. The increase in transaction volume to EUR 1.5 billion can be seen positively – an increase of 7% compared to 2023.
In the area of corporate real estate , the negative trend in the investment market has weakened slightly (1st half of 2024). The rise in yields is not continuing its clearly positive jumps from last year and is flattening out. Rents are stagnating at the previous year’s level. Employee housing could serve as a promising approach in this segment.
Upward trend at a snail’s pace:
Investment market
- Transaction market remains very selective
- Interest rate cuts have a positive effect on willingness to invest
- Good entry opportunities available
Demand for space
- No impetus from the macroeconomic environment
- Home office concepts that are too escalating will be adapted
- Postponed location decisions will be successively made up for
Impulses come from
- Infrastructure real estate
- Hotels and accommodation properties
Hint: You can download the entire spring report with our complete explanations on the ZIA website: https://zia-deutschland.de/fruehjahrsgutachten/
Contact: Sven Carstensen, CEO bulwiengesa, carstensen@bulwiengesa.de
