Sector

 

Real Estate Sector

 

The real estate industry is one of the most important sectors of the German economy. In 2023, it contributed over EUR 730 billion—almost 20%—to the country’s total gross value added. This makes it larger than the automotive industry and comparable to the manufacturing sector. The industry comprises over 810,000 companies and employs around 3.5 million people subject to social security contributions, accounting for approximately 10% of all employees in Germany.

 

The construction industry remains a key pillar of the German economy. In 2023, the gross value added by the construction sector amounted to EUR 234 billion, representing a 6.2% share of the country’s total economic gross value added. Despite challenges such as rising interest rates and construction costs, the sector continues to be an important economic driver with significant indirect effects on other industries.

 

As of: May 2025          Type: Executive Summary

Current Developments

Real Estate & Construction Sector – Ongoing Crisis Despite Structural Demand

 

The real estate and construction sector in Germany remains under pressure. Despite ongoing demand for housing and infrastructure projects, many companies are seeing declining order volumes and stagnant revenues. The main reasons include general economic uncertainty, increased financing costs, and a cautious investment approach from both private and institutional players.

The situation is particularly critical in residential construction: In 2024, only around 210,000 new housing permits were issued – a decrease of nearly 45% compared to the previous year. As a result, the federal government is falling significantly short of its target of 400,000 new homes per year.

 

Construction Industry: Selective Recovery Amid Structural Challenges

 

The construction industry presents a mixed picture: While civil engineering – driven in particular by public investment in infrastructure projects – recorded real growth of 9% in 2024, residential construction suffered a real decline in revenues of 7%. A further 5% decline is expected in the residential sector for 2025. Employment in the core construction industry is falling for the first time in 15 years: in 2024, the number of employees decreased by around 11,500.

The real estate and construction industry continues to undergo significant transformation. The effects of the COVID-19 pandemic are still being felt, …

The real estate and construction industry continues to undergo significant transformation. The effects of the COVID-19 pandemic are still being felt, particularly in the hotel and office property sectors. Changing work and travel habits call for flexible usage concepts to remain competitive and future-proof. At the same time, rising interest rates and tighter financing conditions are placing considerable pressure on the industry. Business models must adapt to these new market realities and demonstrate strong resilience.

 

The construction sector is also facing major challenges. While digitalization holds enormous potential for greater efficiency and sustainability, many companies are still struggling with implementation. A further critical issue is the shortage of skilled labor: the lack of qualified professionals remains one of the most significant barriers to growth across the industry. Despite these hurdles, innovations in technology, sustainability, and business models present major opportunities for the sector’s future.

The valuation of a real estate company is influenced by numerous factors, encompassing both financial metrics and qualitative attributes. A key factor…

The valuation of a real estate company is influenced by numerous factors, encompassing both financial metrics and qualitative attributes. A key factor is the company’s earning power, reflected in stable rental income, the development of revenues and profits, and the profitability of individual properties or the entire portfolio. The financial structure is equally important: a high equity ratio, a well-balanced mix of equity and debt financing, and strong liquidity all have a positive impact on valuation.

The market and industry environment is another critical element. Location quality, market trends, competitive dynamics, and future prospects within specific real estate segments — whether residential, office, or commercial — play a significant role in determining value. Intangible assets such as a well - established brand, ongoing development projects, patents in innovative construction or energy solutions, and specialized asset management expertise further enhance a company's attractiveness.

 

Organizational structure is also crucial. An experienced and capable management team, efficient administrative processes, and a high degree of innovation — especially in digital tools and ESG strategies — are clear value drivers. Regulatory conditions, including construction and rental laws, tax policies, and environmental requirements, also directly affect valuation.

 

Finally, external factors such as the overall economic climate, interest rate levels, and technological developments (e.g. PropTech solutions) must be considered. Taken together, these elements provide a comprehensive basis for accurately assessing the value of a real estate company.

In the real estate M&A sector, a company’s attractiveness is shaped by a wide range of factors that go far beyond the mere valuation of its assets. Fr…

In the real estate M&A sector, a company’s attractiveness is shaped by a wide range of factors that go far beyond the mere valuation of its assets. From an entrepreneur’s perspective, economic stability and portfolio quality are of central importance. A diversified and well-utilized property portfolio in prime locations enhances resilience to market fluctuations and drives long-term value creation.

 

Equally crucial is a strong market position, reflected in a robust network, long-term lease agreements, and high tenant satisfaction. The ability to realize value-add potential—whether through revitalization, project development, or active asset management—makes a company particularly appealing to prospective buyers.

 

The financing structure is another key consideration. A balanced ratio of equity to debt, stable cash flows, and transparent, well-structured financing models foster trust and reduce investment risk. Internal organization also plays a critical role: efficient processes, experienced leadership, and a clear strategic direction all contribute significantly to a company’s appeal.

 

Finally, sustainability and digital transformation are becoming increasingly important in the real estate industry. Companies that consistently implement ESG criteria and leverage digital tools to enhance efficiency position themselves as future-proof players in the market—an undeniable asset in any M&A process.

SXH Sektor Branche Immobilien 01

Growth rates in recent years

Real estate industry

 

 

+ 1,7 %

2022

 

 

 

+ 1,0 %

2023

 

 

 

+ 1,2 %

2024

Construction sector

 

 

+ 0,0 %

2022

 

 

 

- 5,3 %

2023

 

 

 

- 1,0 %

2024

Future Trends

Trends in the Real Estate Industry

 

The real estate industry is undergoing a profound transformation, shaped by numerous current trends and forward-looking developments. Sustainability is playing an increasingly important role: environmentally friendly construction methods, CO₂ reduction, and compliance with ESG criteria are now central topics in project development and property valuation. Digitalization is also progressing steadily. PropTech solutions, smart buildings, and the use of Building Information Modeling (BIM) are optimizing the planning, management, and utilization of real estate.

 

Another trend is the growing demand for flexible usage concepts. Whether co-working, co-living, or mixed-use properties – the boundaries between living, working, and leisure are becoming increasingly blurred. At the same time, we are seeing a shift in demand: while urbanization remains strong, interest in suburban and rural areas has grown since the COVID-19 pandemic. However, high construction costs and increased financing expenses are posing challenges for the industry and require careful project evaluation.

 

Looking ahead, further exciting developments are emerging. Climate-neutral buildings are becoming the new standard, supported by energy-efficient construction, sustainable neighborhood development, and innovative recycling methods. Artificial intelligence and automation are gaining importance – for example, in property management, market analysis, and customer interaction. The vision of the smart city, with connected infrastructure and intelligent supply systems, is coming closer to reality.

 

Demographic change is also having a lasting impact on the real estate industry. The demand for age-appropriate housing is steadily increasing, while alternative financing models such as crowdinvesting and blockchain-based investments are gaining importance. Resilience and risk management are moving more into focus to make real estate portfolios more crisis-resistant. In addition, there is growing interest in health-oriented construction, which places the quality of life of users at the center – from improved air quality to nature-inspired design concepts.

 

These trends make it clear: the real estate industry is undergoing a transformation that presents major challenges – but also numerous opportunities.

Transaktionen
Erfolgreiche Deals

Advisor to TS TestingService GmbH und TS GiM GmbH

Advising TS TestingService GmbH and TS GiM GmbH on the sale to Test Industry (IGI Private Equity)

TS TestingService Sell side
TEST INDUSTRY Sell side

Advisor to SKB-GROUP

Advising SKB-GROUP on the sale of SKG to Amadys

SKB Group Unternehmensverkauf
Amadys Unternehmensverkauf

Consultation of GlasMetall GmbH

Advising GlasMetall GmbH in the management buyout

GlasMetall GmbH Sondersituationen
Management Sondersituationen

Advisor to GoldPlata Peru

Advisor to GoldPlata Peru on the acquisition of Auplata Mining Group

GoldPlata Peru Unternehmenskauf
Auplata Mining Group Unternehmenskauf

Advisor to RTi Deutschland GmbH

Advising RTi Deutschland GmbH on the sale to enercity AG

RTi Deutschland GmbH Sondersituationen
enercity AG Sondersituationen

Advisor to Aptum AB

Advising Aptum AB on the sale to Presto Brandsäkerhet AB

Aptum AB Unternehmensverkauf
Presto Brandsaekerhet AB Unternehmensverkauf

Consultation of GWB Immobilien AG

Advising GWB Immobilien AG on the sale to a private investor

GWB Immobilien AG Unternehmensverkauf
Private Investor Kapitalerhoehung

Advisor to Creovent AB

Advising Creovent AB on the sale to Evolver Investment Group

Creovent AB Unternehmensverkauf
Evolver Investment Group Unternehmensverkauf

Advisor to Tunga Lyft AB

Advising Tunga Lyft AB on the sale to Storskogen Utveckling AB

Tunga Lyft AB Unternehmensverkauf
Storskogen Industrier AB Unternehmensverkauf

Advisor to Klimatrör AB

Advising Klimatrör AB on the sale to FSN Capital Partners

Klimatroer AB Unternehmensverkauf
FSN Capital Partners Unternehmensverkauf

Advisor to Anacacia Capital Pty Limited

Advising Anacacia Capital Pty Limited on the acquisition of Muir Group

Anacacia Capital Pty Limited Unternehmenskauf
Muir Group Unternehmenskauf

Consulting Herner Glas Bernd Hoffbauer GmbH & Co. Luminaires and Industrial Glass KG

Advising Herner Glas Bernd Hoffbauer GmbH & Co. Leuchten und Industrieglas KG on the sale to a private investor

Herner Glas Bernd Hoffbauer GmbH and Co Leuchten Industrieglas KG Sondersituationen
Private Investor Sondersituationen

Advisor to ZUG Gallileo GmbH

Advisor to ZUG Gallileo GmbH on raising debt capital from a private investor

ZUG Gallileo GmbH Fremdkapital Beratung
Private Investor Kapitalerhoehung

Advisor to Schäfer-Bauten GmbH

Advising Schäfer-Bauten GmbH on the sale to Betam Infrastructure GmbH | Schäfer-Bauten GmbH

Schaefer Bauten GmbH Sondersituationen
Betam Infrastructure GmbH Sondersituationen

Advisor to Firstwood GmbH

Advising Firstwood GmbH on the sale to Golden Mile GmbH

Firstwood GmbH Sondersituationen
Golden Mile GmbH Sondersituationen

Advisor to Verein christlicher Schulen Düsseldorf

Advising the Verein christlicher Schulen Düsseldorf on raising outside capital from the city of Düsseldorf

Beratung des Verein christlicher Schulen Duesseldorf Fremdkapital Beratung
Stadt Duesseldorf Fremdkapital Beratung

Advisor to Akson AG Stahlhandel

Advising Akson AG Stahlhandel on the sale to the STABAU Group

Akson AG Stahlbau Sondersituationen
STABAU Gruppe Sondersituationen

Advisor to Frenzel Bau Gruppe

Advising Frenzel Bau Group on the sale to TripleS GmbH

Frenzel Bau Gruppe Sondersituationen
TripleS GmbH Sondersituationen

Advisor to MGO

Advising MGO on the acquisition of ARPRE - Arquitectura Preventiva Integral, SA

MGO Unternehmenskauf
Arquitectura Preventiva Integral SA Unternehmenskauf

Advisor to Primmera Inversiones en Desarrollo

Advising Primmera Inversiones en Desarrollo on the acquisition of Estructuras Burton

Primmera Inversiones Unternehmenskauf
Estructuras Burton Unternehmenskauf

Advisor to Hans Brochier Holdings Ltd.

Advising Hans Brochier Holdings Ltd. on the sale to Nürnberger Baugruppe GmbH + Co KG

Hans Brochier Holdings Ltd Sondersituationen
Nuernberger Baugruppe Sondersituationen

Capital Advisory

Key Success Factor in Real Estate Project Financing

 

Professional advisory in capital raising is a key success factor for real estate projects. Capital Advisory supports project developers, property owners, and investors in the structured procurement of equity and debt capital – from the early conceptual phase to the implementation of complex financing models. The goal is to design a robust capital structure that is both economically efficient and sustainable in the long term. Thanks to a broad network of banks, institutional investors, and alternative capital providers, Capital Advisory offers access to tailored financing solutions. Especially in a challenging market environment with rising interest rates and stricter lending practices, strategic capital advisory provides clear competitive advantages.

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Expert Opinion

Industry Outlook for Success

 

The medium- to long-term outlook for the real estate industry remains positive despite current challenges. The demand for housing, the need for modern commercial spaces, and the growing importance of sustainable, smart properties are creating stable market opportunities. Companies that invest in innovation, ESG strategies, and digital processes are particularly well positioned to drive future growth successfully.

 

In the construction industry in particular, growth potential is heavily dependent on the ongoing shortage of skilled workers. As a result, consolidation pressure is increasing, especially for small and medium-sized players in the construction industry.

Real Estate Joerg

Both sectors face challenges. At the same time, they are dynamic markets with promising growth prospects and steadily increasing demand. The focus on sustainability is also giving them a significant boost.

Jörg Schürmann
Managing Director | Head of Real Estate M&A und Capital Advisory

 

Your Contacts

Saxenhammer possesses in-depth industry expertise and maintains a broad network of sector specialists with many years of transaction experience.

We are happy to advise you!


Jörg Schürmann
Managing Director | Head of Real Estate M&A and Capital Advisory


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