Frankfurt commercial real estate market collapsed massively in 2023: Investors are waiting for lower prices

Frankfurt commercial real estate market collapsed massively in 2023: Investors are waiting for lower prices

According to a report by www.fr.de, trading in commercial real estate in Frankfurt collapsed massively in 2023. The transaction volume was only 1.5 billion euros, compared to 9.8 billion euros in 2021. The market for high-rise office buildings in particular has almost come to a standstill as large properties worth several 100 million euros no longer changed hands.

The impact on the real estate market in Frankfurt is serious. The low demand for office space and the wait-and-see attitude of investors have led to a significant increase in vacancies. Modern offices in central locations continue to be in demand, but investors' wait-and-see attitude is leading to falling prices and uncertainty in the market.

The wait-and-see attitude of investors could lead to further price falls, as many are hoping for even cheaper entry opportunities. This market development could force owners to sell properties and make further concessions on asking prices. Refinancing pressure is growing among portfolio holders, which could lead to increased selling pressure and further price reductions.

Overall, a possible reduction in key interest rates by the European Central Bank or increasing interest from foreign investors could stimulate the market. Nevertheless, the short-term outlook for the Frankfurt real estate market is worrying given current developments.