Real Estate

The real estate sector - in particular brokerage, management, retail and rental of real estate - is one of the largest economic sectors in Germany. In 2021, its turnover of EUR 346 bn reflects 11% of Germany’s economic gross value added. The sector encompasses approximately 291,000 companies with 293,000 employees and continues to show stable growth.

LAST UPDATE

28/09/2022

TYPE

Executive Summary

CONTRIBUTORS

Felix Engelhardt, CFA

Current Developments

The real estate market on the upswing

The real estate industry is on the rise again. According to a study by PwC (2021), confidence in the real estate industry is at its peak although the long-term outlook remains with uncertainties. Future topics playing a key role are as follows: digital transformation, development of strategies regarding the environmental sustainability and its community as well as customer and product innovation (i.e. property technology).

Growth Rates

2020

+1.9%

2021

+1.9%

2022

+1.7%

Trends

Property Technology

“PropTech” is essential to the digital transformation of the real estate sector. It covers the entire real estate life cycle using software and hardware solutions to optimise processes and business models, driving overall efficiency. Innovation and efficiency are thus set to revolutionise the industry.

Transactions

Our Sector Transactions

0

Number of M&A transactions - DACH region, 2021 (as of August)

52

Significant Transactions

Deutsche Wohnen SE X Vonovia SE (2021)

Future Trends

An increasing relevance of sustainability affects the German real estate sector, highlighted by the rising number of “green buildings” complying with sustainable regulations in terms of planning, construction and operation. In 2021, certified sustainable property accounted for 26% of individual transactions (corresponding to EUR 12.6 bn). Most recognised certificates are issued by institutions such as the DGNB, LEED or BREEAM. An upswing of green real estate investments is expected to continue as digital transformation and product innovation play a dominating role.

People & Voices

Saxenhammer has in-depth professional and industry knowledge and can draw on a broad network of industry experts who have gained many years of transaction experience.

"Although the real estate industry faces some obstacles, it is open for innovation and adaption regarding sustainability topics. Alongside environmental shifts and the pandemic recovery, we see strong demand for mergers and strategic acquisitions in the real estate industry."

Felix Engelhardt, CFA

Managing Director

Our View

The real estate sector is proving to be very promising going forward. Trends such as green buildings, property technology and overall digitalisation provide a basis for the industry’s sustainable transformation. Innovative business models are in demand, driving the consolidation pressure within the sector.

Sector Update

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