New DZ HYP report “The German Real Estate Market 2020/2021”
15.12.2020
- Continued high demand on the housing market
- Office properties perform solidly
- New concepts for lively inner-city districts
Approximately one year after the outbreak of the coronavirus pandemic, the German real estate market – and especially the residential asset class – continues to perform solidly overall. The commercial housing market is still experiencing surplus demand and moderate rent increases, whilst space take-up on the office property market declined during the year. However, due to low vacancy rates and modest new construction activity in the past, increasing investor reticence for office space has not had an impact on the rental development so far. Numerous retailers were forced to close their shops in 2020, which resulted in a broad-based decline in prime rents and rising vacancies in inner cities. 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.
Dr Georg Reutter, Chairman of the Management Board of DZ HYP, explains: “Despite the subdued macroeconomic environment, investors are still displaying considerable interest in German real estate. However, we are seeing a shift in demand. Whilst office properties were highly sought after before the coronavirus pandemic hit the country, investor focus moved to retail properties for local supply and to logistics properties during the course of the year. Residential real estate remains the most stable asset class. Not only are financing terms favourable, but the importance of having one’s own four walls seems to be growing once more in the light of lockdowns, contact restrictions and working from home. That explains why demand continued to increase during the crisis.”