Increased tenant activity will mean ‘good times’ are back

There is certainly a slowdown in occupier demand at present as consumer confidence has taken a dip, but in terms of e–commerce it could be described as “technical” because previous exponential growth alongside slow decision-making in the real estate market mean that current new supply is actually the product of decisions made as many as three years ago.

“There is over-capacity, but as soon as [activity] comes back you will also see increasing demand, so I’m pretty sure that over time – at the latest by 2025 – you will see that it’s back to the old times,” said independent advisor Raimund Paetzmann.

Logistics will experience the biggest improvement, he added. “In logistics we have not only e-commerce, there’s re-shoring, near-shoring and the German pharmaceutical program which wants additional storage to secure supply.”

Although the office sector is difficult at present, Paetzmann is not one of those who says “the office is dead”. He said that there will be “normalisation” but there is office over-capacity in offices because people work from home for two days per week, there will be unused space.

Meanwhile, the residential sector is driven by pricing, “because nobody can afford rents which are super-high so this is very dependent on the construction market and on land prices, he said.

ESG is an important part of occupier needs. “I think it will also be important for the future because supply is short and it’s very difficult to unlock land”.