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Survive till 25?

In May, key executives from the German and European property market met in Frankfurt for the annual German GRI 2024.

The consensus showed that the market adjustment will take longer than expected. In the meantime, high-quality, ESG-compliant core assets in prime locations are proving most attractive to many investors. "Beds, sheds & meds" are investors darling.

The programme began with a fireside chat, which I had the pleasure of moderating, discussing investor sentiment for German real estate and the path to a sustainable recovery. While it was quite clear over the two days that Germany has lost its aura as a safe haven and that German participants in particular were very self-critical, Germany is still valued as an economic powerhouse, at least in the Gulf states.

Keynote speaker Carsten Brzeski, Chief Eurozone Economist at ING, spoke about the macroeconomic outlook for 2024 and beyond, emphasising that interest rate cuts could be smaller than expected and that the last mile of inflation will be the most difficult. In general, many participants made it clear that the current crisis is not yet over.

Another circle I was able to moderate was about the BTR (Built-to-Rent) sector and its young sub-asset classes. There is no doubt that residential property and its sub-asset classes are in high demand from tenants and investors alike. There is a lot of potential in PBSA (student housing) or other forms of serviced living. Many concepts are in competition with each other and boundaries are becoming blurred - just like the increasing pluralism of lifestyles. Professional internet communication with users, sophisticated design, smart floor plan solutions and the formation of communities were cited as success factors.

As all good things come in threes, I was also able to moderate the circle "Funding gap opening path to success or drowing in liquidity chaos". The good news right at the beginning: no sign of chaos! But there are of course plenty of challenges. As there is a funding gap here and there. And we are still in a phase of asset deflation. There is a lack of core capital. The word "standstill agreement" is often used.

The difficult situation is being managed with a professional degree of calm and composure. Large NPL portfolios are therefore not expected on the market. Nevertheless, we will see more insolvency cases.

Once again, I would like to thank all the co-chairs for their commitment and input. See you again in 2025. Maja Procz Stefanie Pfister Anni Hoenicke Anastasia Stolzenburg Daniel Ahrendt Friedrich von Trotha Jan-Felipe Salzmann Kashee Ramalingum Stefan Klingsöhr Audrey Klein Markus Wehnelt Oliver Sill Patrick Otto

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