Corporate real estate: record completions expected for 2020

As Bulwiengesa reports, despite the COVID-19 crisis, a full 66 percent more completions in the corporate real estate sector could be recorded in 2020 than in the previous year 2019. In the first half of the year, the number of individual transactions also reached a record level – although the number of international players compared to the previous year has decreased significantly.

“Project developers have reacted to the acute shortage of space in corporate real estate for a long time. By the end of the year we are expecting a record result of 2.2 million square meters of newly completed space. ” This is how bulwiengesa board member Ralf-Peter Koschny was quoted in a press release published at the end of October by the independent analysis company bulwiengesa on the publication of a market report by the Corporate Real Estate Initiative.

1st half of 2020: Second highest transaction volume since records began in 2013

According to the market report, the transaction volume in the area of ​​newly completed corporate real estate was already around 1.2 billion euros in the first half of 2020 (H1). Since records began in 2013, this is the second highest value ever after the transaction volume from H1 2017, which is also a full 16 percent above the average value of all H1 since 2013.

If the expected amount of 2.2 billion completed square meters is actually achieved by the end of the year, this would correspond to an increase of 66 percent compared to the previous year 2019 (1.3 million completed square meters).

Warehouse and production properties account for 89 percent of the completions

Among the completed properties, warehouse and production properties are most strongly represented: a total of 89 percent of the completed properties belong to these asset classes. The proportion of warehouse real estate fell by 32 percent compared to the five-year median, while that of production real estate rose by 17 percent.

Nevertheless, the transaction volume of the former rose in the same comparison by 31 percent to around 197 million euros and the latter fell by a full 56 percent to 143.6 million euros, according to the market report.

According to Bulwiengesa, Koschny comments on this development as follows: “This year, a lot of production properties in particular will be completed – especially owner-occupiers are building on a large scale. This can also dispel the fear that supply could possibly exceed demand. We are excited to see how large the proportion of these properties will be that will be added to the investment market through sale and leaseback transactions in the near future. ”

The desire for multi-tenet real estate increases the proportion of business parks

Unlike the warehouse and production properties in H1 this year, industrial parks account for just nine percent of completions according to the market report, which, according to the market report, corresponds to an increase of 15 percent compared to the five-year median.

In H1 2020, the business park category will take up 73 percent of the transaction volume – an increase of 60 percent to 903 million euros compared to the five-year median.

Share of international actors lower than ever

The majority – a full 86 percent – of the total transaction volume in H1 2020 was created through individual transactions, not with portfolio transactions.

In addition, the proportion of international players has fallen: European investors made 16 percent, North American investors 11 percent fewer purchases than in the previous year 2019. The development could be attributed to the COVID-19 pandemic, according to the corporate real estate initiative in the market report.

With the lower proportion of international actors, 86 percent of buyers and sellers are German actors – there has not been such a high value since records began in 2013.

Image sources: hans engbers /


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