The German Real Estate Market 2019/2020: Top locations remain attractive

The German commercial real estate market has maintained its uptrend. So far, the subdued economic outlook has had no real impact on the market – in fact, retail, office and residential segments are being influenced by other factors. High demand for office properties – in conjunction with a scarce supply of space – leads to persistent rent increases. In the residential asset class, increasing completion figures have slowed down price momentum. The retail sector in Germany’s top locations is expected to buck the trend of falling top rents until the end of 2020. These are the results of the latest research report published by DZ HYP, covering developments on the commercial real estate markets of Germany’s top locations: Hamburg, Berlin, Dusseldorf, Cologne, Frankfurt, Stuttgart and Munich.

“Demand for office and residential space remains strong in the metropolitan areas. Therefore, increasing new construction activity is encouraging and provide some relief in certain areas. At the same time, it is impossible to close the gap created by strong demand within a short space of time. We are observing sustained rent icreases - albeit with abating momentum”, says Georg Reutter, Chairman of the Management Board of DZ HYP, and adds with regard to investors: “The yield gap has developed in favour of commercial real estate. Investors continue to focus on this asset class, which continues to gain attractiveness relative to bonds."

The German commercial real estate market has maintained its uptrend. So far, the subdued economic outlook has had no real impact on the market – in fact, retail, office and residential segments are being influenced by other factors. High demand for office properties – in conjunction with a scarce supply of space – leads to persistent rent increases. In the residential asset class, increasing completion figures have slowed down price momentum. The retail sector in Germany’s top locations is expected to buck the trend of falling top rents until the end of 2020. These are the results of the latest research report published by DZ HYP, covering developments on the commercial real estate markets of Germany’s top locations: Hamburg, Berlin, Dusseldorf, Cologne, Frankfurt, Stuttgart and Munich.

“Demand for office and residential space remains strong in the metropolitan areas. Therefore, increasing new construction activity is encouraging and provide some relief in certain areas. At the same time, it is impossible to close the gap created by strong demand within a short space of time. We are observing sustained rent increases - albeit with abating momentum”, says Georg Reutter, Chairman of the Management Board of DZ HYP, and adds with regard to investors: “The yield gap has developed in favour of commercial real estate. Investors continue to focus on this asset class, which continues to gain attractiveness relative to bonds."

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