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Office market Q1 2024

Despite the ongoing economic uncertainty, take-up on the German office markets totalled 609,000 m² in the first quarter of 2024, almost matching the previous year's level. However, as expected, take-up in the eight locations of Berlin, Düsseldorf, Essen, Frankfurt, Hamburg, Cologne, Leipzig and Munich remains well below the 10-year average (-22 %). The pace of contract signings varied considerably in the individual markets at the beginning of the year. It is significant that large contracts are making the difference given the current challenging market conditions. The pressure on prime rents remains high despite the current moderate overall take-up and vacancy volumes continuing to rise for the time being. This can be explained by the fact that the increase in vacancies is mainly taking place in secondary locations, while the supply of space available at short notice in the absolute premium segment in prime locations remains very limited.

Commercial investment market Q1 2024

There was a noticeable upturn in activities on the investment markets in the first quarter. As expected, however, this is not yet fully reflected in investment turnover. In total, a good €5.5 billion was invested in commercial properties in the first quarter of 2024. Compared to the weak prior-year figure, this corresponds to an 8% increase in turnover. The year-on-year increase in turnover is attributable to the portfolio segment. In total, just under € 1.15 billion was generated with portfolio sales in the first quarter of 2024. This means that almost 88% more was invested than in the same period a year ago. Nevertheless, as expected, the result remains far below the volumes of previous years. In terms of the various asset classes, by far the most was invested in retail properties at the start of the year. With a turnover of just under €2 billion, this asset class accounted for almost 36% of total commercial investment turnover. Logistics properties also achieved a strong result once again, accounting for around a quarter of the total volume, while office properties have so far taken an unusual third place (16% share).

The share of certified green buildings within the commercial investment volume (excluding portfolios) remains at a very high level, even in a challenging market environment. After the top figure of just under 31% in 2022, around 27% was achieved in 2023. This is the second-highest share in the last 10 years and confirms the importance of green investments. While the EU Taxonomy mainly concerned companies in the real estate sector that wanted to place funds on the capital market, it is now affecting more and more market participants. Accordingly, sustainability regulations are becoming increasingly important for investors and buyers across the board, while at the same time occupiers (tenants and leaseholders) must now also take taxonomy criteria into account in their corporate governance. Against this backdrop, proactive management will remain the order of the day in 2024.

Logistics market Q1 2024

At the start of 2024, the German logistics markets were characterised by generally subdued market activity, which resulted in take-up of 1.02 million m² (including owner-occupiers) by the end of the first quarter. This result is 18 % below the previous year's figure and around 31 % below the ten-year average. The economic downturn, which has now persisted for several quarters, has thus also made itself felt for the first time in registered logistics space take-up, albeit with a slight delay. The noticeable rise in rents, high cost awareness on the part of occupiers, longer review processes for letting and the continuing shortage of adequate space in many agglomerations all play a role in the lower fluctuation in the market. Accordingly, occupiers are currently increasingly tending to draw on their contract options and extend expiring leases. While the average prime rent in the top locations rose by 9 % to 8.05 €/m² in a twelve-month comparison, growth slowed noticeably in the first quarter. Only Hamburg and Berlin recorded increases compared to the fourth quarter.

Retail market Q4 2023

2023 was a very turbulent year not only for the commercial investment markets, which were largely characterised by the challenging financing conditions, but also for occupier markets such as the retail market. In the first nine months of the year, there were six times as many major fashion bankruptcies as in the same period of the previous year (including P&C Düsseldorf, Hallhuber, Gerry Weber and the fashion company Ahlers). In addition, the negative headlines in connection with Signa Holding and the currently very expansive fashion store Aachener (now also bankrupt) created further uncertainty for many landlords and city centre locations in the fourth quarter. On the other hand, however, there were also numerous signs that reflect the thoroughly positive market sentiment on the letting markets: These included, first and foremost, the very good result in terms of take-up, which was achieved, among other things, by the successive re-letting of numerous shops that had been vacant for some time as well as looming vacancies. Developments in the prime rents segment were also positive, with the stabilisation trends that began in the previous year continuing to strengthen.

Residential Dashboard 2023

The course of 2022 so far has been characterised by different, very dynamic developments. On the one hand, with the ongoing transition of the Corona pandemic into an endemic, the usual movement is slowly returning to society and the housing markets. On the other hand, the Russian war of aggression and the strong increase in inflation created a new challenging market environment. Rising SWAP rates and worsening financing conditions have caused an overall slowdown in market dynamics. Overall, the housing markets are thus in a phase of consolidation. On average, rents and prices are currently stabilising. However, there are clear local differences.

Residential rental & purchase price navigator

The residential markets of the most popular metropolises in Germany have been dominated by rising rental and purchase prices for years. But what is the situation in the rest of the country? BNPPRE investigated this question and analyzed all 108 independent cities in Germany. With the BNPPRE Residential Navigator, which is updated every six months, you can make further progress through the numerous residential markets and keep an eye on rental and purchase price developments (for condominiums) in the new builds and existing stock as well as other key figures.

Hotel Dashboard Q3 2023

The German hotel investment market once again failed to record any sustained revival in the third quarter. Accordingly, the total transaction volume recorded by the end of September amounted to just €573 million, the lowest result since 2010. While the previous year's result was undercut by slightly more than a half      (-56%), the decline compared with the ten-year average was even more pronounced at -73%. Despite the very low transaction volume, a recent increase in buyer interest has nevertheless already been observed, which is attributable to the now again high hotel occupancy rates. However, the pricing phase remains dynamic, which is why transactions are currently being realized primarily in the small-scale segment. Consequently, as in the same period of the previous year, no major portfolio transactions were recorded in the first nine months of the year.

The Hotel Dashboard from BNP Paribas Real Estate provides an overview of the development of hotel investment and performance indicators in the various top markets in Germany.

BNPPRE Tourism analyser

On the German hotel market, after the impactful Corona years of 2020 and 2021, all key performance indicators suggest that the recovery of tourism in Germany has gained significant momentum, especially since summer 2022. With a total of around 349 million overnight stays between January and the end of September, the figures for 2021 as a whole (around 310 million guests) had already been outperformed by almost 13% before the start of the fourth quarter. On a monthly basis, the number of overnight stays has been on a par with the level of 2019 since August due to the renewed demand impulses in city and business tourism as well as among guests from abroad. An analysis by BNP Paribas Real Estate on the most important developments and trends in the German hotel market shows how the Corona crisis has affected the general conditions in the hospitality industry and influenced travel behaviour in Germany.