Trend reversal after nine boom years

06/12/2018

The long boom on the German real estate market is now coming to an end. “Of this we’re almost certain,” Savills has predicted in its recent market outlook, although a downward slide is not expected. Transaction volume on the German commercial real estate market is likely to move towards €50bn next year after the predicted all-time high of €60bn for 2018, Matthias Pink, Head of Research Germany at Savills, said in an interview with TD. Colliers International expects as much as €58bn. Either would be above the average, as around €380bn has gone into German commercial real estate, i.e. over €42bn per year on average, since the beginning of the boom in 2009, according to Savills. Both Pink and Marcus Lemli, CEO of Savills Germany, continue to see the greatest potential for rent increases in the office segment and – government regulations notwithstanding – in the residential segment. Lemli says that he expects 2019 to be an “incredibly exciting year for sellers and buyers”. Focus is now on individual segments and submarkets; the Frankfurt office market, for example, could bring positive surprises.


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