Norman Gelbart, Partner Real Estate, PwC, tells Real Estate Day that talk of freezing rents without freezing interest rates or construction or labour costs is interference in markets that are functioning well and creates great uncertainty for foreign investors
Dr Carsten Loll, Partner, Real Estate, Linklaters, Germany, tells Real Estate Day that there is a shift underway to a more operational model where brands become important, as shown by the meteoric rise of WeWork in Germany, which is doubling the office space it operates
There are big changes underway in Germany’s real estate market, Carsten Loll, Partner, Real Estate, Linklaters, Germany, told Real Estate Day.
‘The German market is changing dramatically,’ he said. ‘We are moving from a bricks-and-mortar orientation and yield orientation to a more operational model, which you can see not only in the office space, where WeWork is certainly the first port of call, but also in other sectors like senior living and student housing. Operators become a brand and these brands will be much more successful than traditional players’.
The growth of WeWork has been ‘an extraordinary story’, he said. They are the biggest tenant of office space in Manhattan and in London and now they are operating in Germany. ‘They have more than ten centres open and undergoing a phase of hyper-growth so there are at least another ten centres to come and in terms of space that means a lot, especially if you look at slightly overheated markets like Munich where there’s hardly any office space left’.
The market is so competitive because most international investors are chasing the same product, which is core offices in the top seven cities and logistics.
‘I lost so many finals and semi-finals this year in bidding processes that it is a pain,’ said Loll. ‘What makes me sceptical about the market is that the pricing is too high and there is a lack of product’.
Steep pricing and a competitive environment do not seem to deter foreign investors, who are coming ‘from all over the place,’ he said. ‘They come from Asia, especially Singapore and South Korea and now possibly Japan, but the old investors from the US and the UK are still very active’.
Germany is still seen as the safe haven in Europe and this reputation has been boosted by the problems the UK is experiencing with Brexit. Turnover in commercial real estate was over €60 bln last year and this year’s figure is likely to be equally impressive. ‘We will stay the leading investment destination in Europe,’ Loll said.
Buddy Roes, COO & Northern Europe Managing Director, Logicor, tells Real Estate Day that as more and more investors want to enter Germany, Europe’s largest logistics market, yields will remain under pressure and the same is happening in the Netherlands
Dirk Bakker, Head of Hotels EMEA, Colliers International, tells Real Estate Day that while the established big chains are coming up with new brands which are not always successful the most promising challengers are lifestyle hostels which are the real competitors to Airbnb
Raimund Paetzmann, Vice President Corporate Real Estate, Zalando SE, tells Real Estate Day that they look at every aspect, from packaging to solar power and every aspect of the supply chain, and are prepared to pay more to make sure their sustainability goals are achieved
Ingo Steves, Managing Director, Gazeley North Europe, tells Real Estate Day that it is not all about the end user or the consumer but logistics needs to be close to the industrial and manufacturing heartlands, especially in Germany where the sector is particularly strong
Buddy Roes, COO & Northern Europe MD, Logicor, tells Real Estate Day how they are trying to adapt to changing customer demands and finding the best solutions, locations and buildings that fit their customers’ requirements today and also in the future
Desirée Uitzetter, Managing Director Area Development, Bouwfonds Property Development, tells Real Estate Day that as an area developer they try to meet the huge demand for affordable housing in suburban and inner city areas in the Netherlands by creating integrated developments
Aditya Sikri, President, Indospace, tells Real Estate Day that there is a lot of consolidation and conversion going on and the challenge for logistics companies is to be more efficient, more cost-effective, more high-tech, more sustainable and moore in line with international standards
Andy Harding, Head of Industrial & Logistics, JLL UK, tells Real Estate Day that the two main requirements in the sector now are more power to future-proof the buildings and more amenities like gyms, gardens, cafes and relaxation areas to ensure the well-being of occupiers