City Survey

Q4 2023

Chapter 1Executive Summary

This is what we will be dealing with in 2024:

  • Economy: Economic environment brightening, economy on a moderate growth path.  
  • Inflation & interest rates: Financing costs remain at a high level, volatility decreases.
  • Germany as a business location: Stress test for Germany as a business location.
  • ESG:  EU Taxonomy’s Standards are completed, defining the real estate sector’s “circular economy”.
  • Artificial Intelligence: New Horizons and Opportunities for Innovation.

Real estate market summary

Investment market on the back burner – Weak investment year 2023 with a slight upturn in the 2nd half of the year. The outlook for 2024 is cautiously positive.

Weakening economy dampens office market significantly – Low demand from large companies will noticeably slow down the office market in 2023. Recovery not until mid-2024 at the earliest.

Upturn in the industrial & logistics sector – market momentum picks up slightly in the leasing and investment market at the end of 2023

Retail real estate transactions focused on a few segments – consumer climate continues to deteriorate, wage development can offer positive impetus in 2024. Investors are presented with opportunities due to advanced market consolidation.

Residential investment market bottomed out in 2023 – positive outlook for 2024, stabilisation of initial yields and sustained rental growth offer opportunities.

Investments in office and commercial buildings in B&C cities almost at the level of the top 7 – Stable rental markets offer attractive conditions according to price determination.

Chapter 2 Macroeconomic Environment