CRE 2024

Outlook for 2024

As MD of Eurovision Real Estate GmbH, I would like to thank all our business partners for their inspired and enterprising work over the past years.

Das Transaktionsvolumen mit deutschen Gewerbeimmobilien belief sich 2023 nach Zahlen der internationalen Makler auf 21,5 bis 24 Mrd. Euro und damit fast 60 % unter dem Vorjahreswert. Auch der Zehn-Jahres-Schnitt wurde in ähnlich hohem Maße unterschritten.
In Summe kommen die von uns recherchierten 60 größten Gewerbeabschlüsse auf rund 8,7 Mrd. Euro, was einen Rückgang von über 60 % im Vergleich zum Vorjahr bedeutet. Die zehn größten Wohntransaktionen summierten sich 2023 auf 2,2 Mrd. Euro. Über 900 Mio. Euro davon gehen auf das Konto von Vonovia mit dem Verkauf zweier Neubau-Wohnportfolios an CBRE Investment Management.
Büroimmobilien verlieren ihre Dominanz: Laut BNP Paribas Real Estate liegen sie mit knapp 6 Mrd. Euro Umsatzanteil hinter Logistik (6,1 Mrd. Euro) und nur leicht vor Einzelhandel (5,7 Mrd. Euro). Viele institutionelle Investoren wollen den Büroanteil in ihren Portfolios wegen des Strukturwandels in dem Sektor reduzieren, berichtet Savills. Dies dürfte die Nachfrage nach Büroimmobilien noch lange dämpfen. 
2024 outlook is still positive, despite high interest rates.  
The German real estate market is still running at top speed. There are many reasons for this: the continued expansion in the German economy is a factor just as much as the employment market. With employment repeatedly reaching new highs, combating unemployment has taken a back seat. The focus is instead increasingly concentrated on the growing shortage of workers. The indicators for the position of companies and consumer confidence are correspondingly positive. The population is also expanding through immigration and rising birth rates once more. And given low capital market returns, many investor billions are still on the hunt for property investments offering higher returns. But these are now just as difficult to find as commercial space and residential properties.
 
Commercial real estate as one of the real asset classes, is gaining a fast track worldwide, due to the FED’s and EZB’s friendly terms and programs.

Our conservative mindset cautions us to be skeptic about various aspects of modern real estate portfolio theories. Thus, our business analysis relies on common sense and puts less emphasis on statistical evaluations. Instead, we believe that the risk of a real estate investment primarily depends on the geopolitical location and the context of its business segment, management and financial statements. 

Weltweit erwartet man im kommenden Jahr Immobilien Transaktionen in einer Rekordhöhe von 1,95 Billionen USD.
 
 Alternative Investment Fund Managers Directive (AIMFD) rules came into effect, prompting reactions from industry observers.

In spite of this increasingly challenging environment, a majority of investors think direct real estate investment will continue to grow in 2024.

Der deutsche Gewerbeimmobilien Investment Markt 2022 war wie erwartet stark. Das Transaktionsvolumen stieg auf über 120 Mrd. Euro.

 

Fundamentals of Commercial Real Estate Business

Classifications properties are classified by their submarket, as opposed to using street names and addresses like in everyday speech. Submarkets include more generalized locations such as neighborhoods, cities, and larger regions.

Annual returns on commercial real estate investment commonly succumb to two categories: cap rates and stabilized returns. A cap (capitalization) rate is the initial annual return (annual rental income of the property ÷ purchase price). The higher the CAP rate, the more rental income the property produces. Stabilized returns, conversely, are calculated after a property has been taken full advantage of. This is due to the fact that stabilized returns derive from leases with imminent expiration or other pending changes.

Returns of investing in commercial real estate vary greatly, depending on the risk an investor is willing to take.