New start on the real estate market

In the years of the crisis, 2022 and 2023, RHE Grundbesitz was able to realize a transaction volume of around 800 million euros. During this phase, the focus was primarily on the interest of investors with strong equity, such as family offices, which accounted for around 85% of the investments brokered.

Institutional investors are increasing their market activity

The market as a whole experienced a significant revival in the commitment of institutional investors in the following year, 2024 – especially from the third quarter onwards. Around 46% of the transactions were accounted for by this group of buyers. After a cautious start, the market had noticeably gained momentum due to successive interest rate cuts. There were increasing transaction volumes and first portfolio transactions; in the third quarter of 2024 alone, eight deals in the three-digit million euro range were concluded.

The increased supply since the interest rate turnaround is now again meeting increasing demand, especially for existing properties with potential for rent increases or densification.

Berlin remains the focus for investments

About 30% of the total German investment volume in the residential property sector is accounted for by Berlin. Berlin will remain the most attractive location for residential property investments in 2025. Compared to other metropolises, there are currently interesting purchase opportunities in central locations – at moderate prices. This makes Berlin a particularly “safe” investment. The city continues to impress with its great growth potential and global appeal.

The ongoing decline in building permits for new buildings will further increase the pressure on rents and prices for existing apartments. The returns on existing properties have already stabilized in the course of 2024. However, obsolescence risks and rental potential are decisive factors for demand and price formation. The announced continuation of the interest rate cuts by the ECB in 2025 further reduces financing risks.

A new cycle

We are at the beginning of a new real estate cycle that will be characterized by stability and realignment.

The outlook:

•         Price development: Prices remain stable, while further interest rate cuts stimulate demand.
•           High supply pipeline: Financing costs and tightened ESG requirements ensure willingness to sell and some buying opportunities.
•          New technologies: The targeted use of AI improves comprehensive and efficient property inspection.
We are experiencing a turning point at which experiences from the low interest rate phase are being consistently implemented. Market players have the opportunity to reposition themselves through precise analyses and innovative approaches.

Optimistic view of 2025

The conditions for the new year are promising: We at RHE are starting with an exclusive transaction volume of around 80 million euros and new sales processes are already emerging. The cards are being reshuffled, market shares are being redistributed. This dynamic gives reason to be optimistic about the investment year 2025.

Let’s achieve something big together!

Delano Kyles · CEO & Managing Partner