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Investments are booming: commercial real estate in the focus of investors!
In the first quarter of 2025, investors invested €300 million in commercial real estate, while risks and market trends are highlighted.
Investments are booming: commercial real estate in the focus of investors!
In the first months of 2025, the market for commercial real estate in Germany shows a dynamic picture. Loud The press Around 300 million euros were invested in domestic commercial properties in the first quarter. Experts predict that transaction business will pick up pace in the second quarter. This indicates increasing interest across various market segments, with advanced negotiations already evident everywhere.
The demand for office properties is particularly noticeable. These accounted for 34 percent of the total transaction volume in the first quarter. Other sought-after asset classes include residential construction with 23 percent, logistics properties with 17 percent and hotels, which also made up 17 percent of the volume. It is noticeable that investments are predominantly made in single-variety properties, while mixed-use properties receive little attention.
Market conditions and challenges
Increased construction costs, longer construction times and a lack of exit options have worsened the financial situation of many project companies and are increasingly leading to insolvencies. Mezzanine financiers are forced to write off receivables. In this context, the value of senior financing is at risk.
Regulatory developments and their effects
The stricter regulatory requirements for banks in real estate financing also come into play. The EBA Guidelines on non-performing loans (NPLs) provide important guidelines for the entire EU. The focus of regulators is increasingly on the real estate loan books of financial institutions, as an increase in problem loans and non-performing loans is expected.
Paradoxically, however, these developments could also stimulate transaction markets. The high demand for office properties in the best locations remains, while at the same time the pressure on B and C locations is increasing. Another challenge is the increased requirements for quality standards, sustainability and energy efficiency. In addition, 80 percent of employers plan to reduce office space by over 20 percent, which significantly changes the requirements for the real estate industry.
A look at retail shows that online retail poses major challenges for shopping centers. 60 percent of consumers visit shopping centers without making a purchase or consuming, which requires a realignment of the tenant mix. The combination of growing risks and pressure to adapt paints a complex picture for the future of commercial real estate in Germany.