CBRE outlook: DACH region will continue to be a safe real estate market in 2021

The DACH region remains an attractive real estate destination. Germany, Austria and Switzerland will probably remain safe real estate locations even after the pandemic. This is shown by the cross-border Market Outlook of the real estate services and investment company CBRE.

CBRE dealt with the real estate markets of the DACH region across borders for the first time in 2021.

Entire region attractive – with national characteristics

The three experts Andreas Ridder, Managing Director CBRE Austria & CEE, Florian Kuprecht, Managing Director CBRE Switzerland and Alexander von Erdély, Managing Director CBRE Germany, explained in the introduction that the three markets are also attractive in an international comparison and are particularly characterized by stability. Nevertheless, there are some national peculiarities.

The CBRE Group, headquartered in Dallas, is the world’s largest real estate services and investment company in terms of 2020 sales. It employs over 100,000 people in more than 100 countries. In Germany, CBRE has had its headquarters in Frankfurt am Main since 1973.

The myth of the office declared dead

Although there has recently been an increasing discussion about the future of office space in the course of remote work, the experts at CBRE continue to see demand that exceeds supply, especially in central locations. The vacancy rates are generally low in the DACH region. In city centers, such as Vienna, Berlin, Munich or Zurich, demand is still very high.

Alexander von Erdély explains that there are three strategic approaches in the German office market: some companies watch and wait to see how they want to deal with their space, others make small tactical adjustments without a strategic background and some visionaries want changes and strive to adapt their space the office of the future.

The office market in Austria suffered primarily from the low level of new space production. That, and the low vacancy rate, mean that general renovations of outdated properties are becoming increasingly important. Cities such as Vienna, which are characterized by old buildings, are particularly affected. According to the Managing Director of CBRE Austria Ridder, an increasing number of evaluations and optimizations of existing office space have been observed since 2020.

According to CBRE, there has been a catching-up effect on the office market in Switzerland since the beginning of the year, but decisions are taking longer and longer. Kuprecht explains: “Many companies in Switzerland are cautious, they observe the situation and the further development of home office or remote work in order to only then make a decision about future office space.”

The consequences of online trading

Last but not least, the rapidly growing online trade, especially since the pandemic, has led to the fact that no asset class is currently booming like industry and logistics, according to Erdély. While the institutional logistics market in Switzerland and Austria is still in the development phase and characterized by a high rate of owner-occupiers, there is an excess of demand from investors in Germany. However, in all three German-speaking countries, the demand for logistics space is high, yields are falling and vacancies are low.

The boom in online retail due to changed shopping behavior is also leading to a change in retail. The three experts explain that stationary non-food retailers in the DACH region have faced some challenges in recent months as a result of the pandemic: “The pandemic here intensified and accelerated a development that was known long before the Corona. “

Rents in the top shopping locations fell the most in Germany, at 19 percent. In Austria they fell by seven percent, in Switzerland they even remained at pre-crisis level. But the experts agree that retail will continue to be part of urban life and image. After all, the pedestrian frequency in the main German shopping streets is back to the pre-pandemic level after the lockdown measures have been relaxed and lifted.

Furthermore, CBRE comes to the conclusion that districts with mixed use are becoming more and more important and are already considered a separate asset class in Germany. Although this development is not yet so advanced in Switzerland and Austria, according to Ridder there is already some development in the direction of new city quarters and quarters in Austria.

ESG criteria are becoming more and more important

The trend is also more and more towards sustainable investment strategies. The ESG criteria (environmental, social, governance) are of growing importance. Not only that, according to Erdély, investors in Germany recognize the potential of mixed-use neighborhoods and want to make a sustainable contribution to the city of tomorrow in the sense of Manage-to-ESG. ESG is also “increasingly finding its way into the strategies of institutional investors”, writes CBRE in its Outlook. In terms of awareness and development for sustainable investments, Germany is the front runner within the DACH region.

The experts conclude that the DACH region is considered one of the most important investment regions for investors worldwide due to its political stability and economic strength, despite national peculiarities and cultural differences.

Image Sources: David H. Seymour /


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