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Office market H1 2024

In the tailwind of continued modest economic growth, the German office markets remained stable overall in the first half of the year. Take-up in the first six months of 2024 totalled around 1.26 million m² and was thus on a par with the previous year (1.23 million m²). While all markets in Berlin, Düsseldorf, Essen, Frankfurt, Hamburg, Cologne, Leipzig and Munich remain significantly below their average level, the year-on-year comparison in the top office markets is very inhomogeneous, as large deals continue to make the difference in this market period. Overall, there are many indications in the current market environment that the German office markets will bottom out in terms of take-up over the course of 2024 and that we can expect take-up across the board to rise again in the following months. Nevertheless, it is still too early to speak of a sustained acceleration in market development. We expect the result for 2024 to be moderately above the previous year's level, despite the still unfavourable conditions.

Commercial investment market H1 2024

The slight upturn in the investment markets that was already evident at the start of the year continued to accelerate in the second quarter. As a result, the total commercial investment volume in the first half of 2024 amounted to €12.2 billion. Compared to the previous year, this corresponds to an increase in turnover of around one third. In the portfolio segment, the transaction volume has actually more than doubled. Even if turnover is still moderate in the long term, a clear upward trend can be seen. Having analysed and considered the various parameters, we expect to see a step-by-step recovery in the investment markets in the second half of 2024, which should accelerate towards the end of the year. Developments on the office investment market are likely to remain difficult for some time, even if the first positive signs are recognisable, while interest in other asset classes will continue to increase noticeably. As a result, investment turnover is also expected to rise. Although it remains extremely difficult to make a forecast in the current environment, an increase in turnover of 25 to 30 % seems entirely possible from today's perspective.

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 Q1 2024

-The noticeable market recovery observed at the end of the year and the generally more positive market sentiment have not yet been reflected in the figures for the first quarter of 2024. Hotel transactions totaled just under €240 million in the first three months, falling short of the previous year's figure by around 13%. The long-term average was missed by significantly 62% as well. Investment activity continues to focus on sales of individual properties; no portfolio transactions have been registered to date. In terms of investors, foreign buyers stand out with a good 61%, although this is likely to level out somewhat over the course 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.