Outlook 2026: tech innovation leading to reform in real estate

Reform in the real estate sector is a necessity driven but also facilitated by innovation, experts agreed at Real Asset Media’s European Outlook 2026 – Germany: emerging trends and opportunities briefing, which took place recently in Frankfurt, hosted by PwC.

“This is not just a new cycle but a fundamental shift in the market due to technological innovation and changing trends,” said Andreas Walter, Partner, Attorney at Law, Yester & Morrow. “There needs to be reform and a different way of dealing with supply and demand in real estate if we want to get to a more competitive Europe.”

European markets are at different stages in this transformation process and market sentiment also varies, tending to be more positive in Southern and Eastern Europe, while there is less optimism in France and Germany.

“Spain and Greece have strengthened after a difficult time, but Germany unlike them has not been through tough reforms”, said Walter. “A new market-driven confidence is needed, because we are sitting on an old pile of commercial real estate which is just not needed anymore. Refinancings are at record highs, three or four times the average, there is no functioning market and people do not know what to do with obsolete assets. We are just kicking the can down the road.”

Transaction volumes are down in Germany, and the issue of what to do with assets that are not core, not ESG-compliant and not in the best locations is left unresolved.

“There is a paradox in Germany”, said Christian Kaiser, Country Manager, eFM. “Proptech, the R&D department of the German real estate sector, is playing a crucial role and the market is projected to grow further. Strategic partners are coming in and making substantial investments. The technology is there, the solutions are there, from digital governance to smart contracts to operating systems that bring it all together and deliver the flexibility that people want.”

Technological innovation is providing answers, but traditional mindsets are delaying acceptance of new concepts like space as a service.

“Inefficiencies are still massive in our industry and people are reluctant to do things they do not have to do”, said Thomas Veith, Partner, Global Real Estate Leader, PwC. “Doors are not being opened yet as the business case is not proven. We’re still on a journey, but our industry needs more innovation in everything, from construction to asset management.”

Part of the problem is that in Germany, like in Europe, there is more of a focus on meeting the regulations rather than on exploiting the opportunities and driving efficiencies.

“The industry is facing a lot of challenges, yet there is a lack of innovation”, said Susanne Eickermann-Riepe, Chair of the RICS European World Regional Board, RICS. “We cannot hide behind regulations anymore: we must act. It will be our drive and our capacity to innovate that will push the industry forward, but we need a change of mindset that is more business-driven and less regulation-driven.”