With the Investment Atlas, we analyse when it is (again) worthwhile to invest, where the most lucrative markets are for investors, and what strategic investments look like. Whether you wish to diversify your portfolio, understand emerging trends, or simply find a valuable opportunity, the Investment Atlas supports you in making informed decisions in the commercial property sector.
AT A GLANCE
Since 2022, European commercial property markets have experienced a phase of price corrections triggered by rising interest rates and economic uncertainties. These developments led to a significant decline in transactions and a temporary hesitation in investment. However, the Investment Atlas 2024 that the market is now stabilising and offers substantial investment opportunities. The United Kingdom and Germany rank among the region’s most high-potential markets. Currently, the logistics and retail sectors present the strongest prospects for capital growth.
Germany as a prime investment
Following a comprehensive revaluation of the property markets in recent months, all market segments in Germany are classified as undervalued. This presents attractive investment opportunities for investors, particularly in the office, retail and logistics sectors, where market returns have risen by an average of 149 basis points since 2021.
All market segments in Germany are classified as undervalued
- Particular potential in the office market due to increased yields between 2021 and 2024, with an increase of 222 basis points
- A stable yield level and potential for a rental growth create promising conditions for investors
- The retail segment is experiencing a renaissance, with an increased number of undervalued markets compared to the first quarter of 2024, alongside a combination of attractive pricing and improved consumer conditions
- In addition to liquidity and expected returns, refinancing requirements and lower interest rates are key drivers that strengthen Germany as a top location for capital market opportunities
Fundamentals of the Investment Atlas 2024
The data in the Investment Atlas is based on the company's own core tools: the TIME Score, Fair Value Index and Debt & Strategy, which have assessed the attractiveness of investment opportunities in the markets analysed.
The TIME Score analyses the timing of investments, providing a precise assessment of when the market is in transition and when it is advantageous for investors to enter. It is based on cyclical market movements, indicating when stabilisation or an upswing is likely. The results in 2024 suggest that all European real estate sectors are at a turning point, indicating that investors now have the opportunity to act during the early stages of an upswing.
The Fair Value Index is a key assessment tool that analyses the relative price attractiveness of property markets in relation to their long-term yield potential. A High Fair Value Score indicates that markets are undervalued and may therefore offer higher returns when prices normalise again. According to the index, 84 per cent of European prime markets are undervalued, presenting a significant opportunity for investors. Germany, the UK, and France, stand out in particular, where price corrections have been particularly pronounced.
The Debt & Strategy component refers to the financing situation and the strategic realignment of investors in the light of the high interest costs. In the current market environment, which is characterised by high debt costs, investors must weigh whether to rely more on equity or adjust their debt structure. The study shows that capital availability is once again increasing, which indicates a normalisation of financing conditions.
Find our press release focussing on Germany here.
