Real Estate

The office real estate market has traditionally been robust. Massive changes have occurred in the early 2020s: the COVID-19-pandemic caused temporary construction stops and home office regulations reinforced the trend toward remote work. Currently, many large companies are rethinking their office concept – both working hours and working environments are becoming more flexible. Possible effects are lower per capita office space and decreasing demand for space. In combination with increased construction activity in key markets, this could lead to growing vacancy rates in the medium term and put pressure on purchase and rental prices. On the other hand, the risk seems manageable, as the share of office work is rising again and the share of remote work declining – many companies and employees continue to view in-person collaboration positively.

In the case of real estate, the willingness to finance has been severely impacted by global crises. At the same time, the structuring of terms and conditions is also suffering from the uncertainty that has arisen. Still, the financing side continues to be characterized by available liquidity and investment pressure from institutional investors. In this context, real estate financing must be viewed in a differentiated manner – the differences between asset classes have become greater: In particular, financing constraints remain high for hotels, retail properties and to some extent also in the office segment. There are positive trends in residential, manufacturing and logistics.