Munich, 04.10.2022. Where and under what conditions are there still attractive investment opportunities in the office and residential market in Germany and beyond in the current market environment? This is the central question of the three-country study published jointly by Becken, bulwiengesa and INDUSTRIA, which was presented today at a press conference at Expo Real. The residential market scoring compiled as part of the study lists Amsterdam, Munich and Frankfurt am Main at the top as the most attractive investment locations. In the office market scoring, Berlin, Munich and Amsterdam are at the top of the list. For the two scorings, the most important 22 residential and 17 office markets were analyzed and various demographic, real estate, socio-economic and macro-economic factors were taken into account and added together to produce a scoring value between 0 and 100.

"With our joint study, we are providing pan-European-oriented institutional investors with an orientation aid that allows them to compare different investment objectives on a scientific basis," says Dieter Becken, Managing Partner of Becken Holding GmbH. "Especially in the current times, which are characterized by distortions and uncertainties, a sober look at the data and facts is of great importance in order to place investment decisions on a solid foundation."

Amsterdam most attractive target market for residential investments
The residential market scoring is led by Amsterdam (89.7) and Munich (81.7). Both cities are very attractive for residential investments, with the Dutch capital's higher yield level tipping the scales for first place. Frankfurt am Main (67.0) followed in third place, ahead of Paris (65.4) and Utrecht (64.6). Hanover (30.7) and Lille (29.1) were at the bottom of the table. "As the ranking analyzed those residential markets in Germany, France and the Netherlands that have comparatively positive demographic and economic data, a low position in the ranking does not mean per se that investments in these markets are completely unsuitable," says Felix Embacher, Head of Research & Data Science at bulwiengesa, commenting on the results of the study. "Even in lower-ranked cities such as Lille, Hanover or Nice, there are attractive investment opportunities with the right local market knowledge and a product geared to demand."

For the housing market scoring, a total of 19 indicators were analyzed for the 22 most important housing markets in Germany, France and the Netherlands. The indicators include the development of the population, the population forecast, the unemployment rate, the development of gross domestic product per capita, standard market rental and purchase prices and the prime yield for residential real estate.

"The winner of the housing market scoring, Amsterdam, is particularly convincing due to its good development in terms of employment figures, its good age structure and its high income level and income development," says Arnaud Ahlborn, Managing Director of INDUSTRIA. "In addition, the prime yield for residential real estate in Amsterdam is still at 3.0 percent, which is more than 0.5 percentage points higher than in Paris, Berlin or Munich."

Two German cities at the top of the office market ranking
Berlin (84.4) is at the top of the European office real estate market ranking, ahead of Munich (79.4). It is followed at some distance by Amsterdam (70.7), Hamburg (65.2) and the central business district of Paris (62.1). "The particular strength of the Berlin office market lies in the strong growth in the number of office employees, the forecast population growth, the low vacancy rate and the significant increase in prime rents," says Felix Embacher, Head of Research & Data Science at bulwiengesa. "In a direct comparison with Munich, the German capital outperforms its Bavarian rivals primarily due to the sheer size of its office market. In addition, employment growth in Munich has been below average in recent years." The French cities of Marseille (25.5) and Lille (24.7) are at the bottom of the ranking.

For the office market scoring, a total of 22 indicators relating to the macroeconomy, the regional economy and the local office market were analyzed for 17 European office markets.

Sustainability regulations offer opportunities for investors
Parallel to the economic challenges surrounding the energy crisis, disrupted supply chains, interest rate reversals and record inflation, the requirements of the capital market and the regulatory environment to make real estate investments ESG-compliant are increasing. "The new ESG guidelines are both a challenge and an opportunity. In particular, there is great investment potential in the energy-efficient refurbishment of existing buildings, the transformation of real estate and the construction of new sustainable projects," says Jörn Stobbe, CEO of Becken and Chairman of the Supervisory Board of INDUSTRIA. "In the three markets examined, Germany, France and the Netherlands, we see a large number of efforts to contribute to the achievement of sustainability goals in the EU. The Netherlands is already the most advanced in this respect. From January 1, 2023, for example, a minimum energy requirement will apply to office buildings, which, if not met, will effectively result in a ban on use. At the end of 2021, only 42% of all office buildings had the necessary energy label, resulting in a huge need for investment."

You can find the complete study here.