• The background and trends that are pushing banks and savings banks to put their branch networks to the test, and as a result there are often branch closures as well as redesigns of bank branch networks, are extremely diverse.
• In the last 5 years alone, the number of bank branches has fallen by 25%.
• The reasons are: Years of zero interest rate policy by the ECB, high rental & personnel costs, Covid-19 pandemic, numerous competitors from the digital world such as FinTechs and direct banks.
• At the same time, customers' user expectations of a bank with an increasingly digital presence are changing. Increasing user numbers in online banking have been observed for several years.
• The aim will be to embed physical branches in a digitally driven outbound sales model with solitary competence centers in order to reduce costs while increasing the quality of advice.
• Larger and more heavily frequented stores will simultaneously seek to increase the feel-good factor. The aim is to stage the branch visit as an "experience" for customers and to bring the user experience to the fore.
• In the long term, however, bank branches will be available on the real estate market, for which there are already numerous creative and innovative after-use options.

Berlin's Northwest Innovation Corridor

The Northwest of Berlin covers an area from the east-west axis of Falkensee to Pankow and the north-south axis that runs from Reinickendorf to Charlottenburg. The districts of Spandau, Tegel and Siemensstadt form the nucleus of the area. For decades, Berlin’s Northwest suffered under the flight path of Tegel Airport which was closed at the end of 2020. Long before the airport was closed, the City developed plans for the area’s future. With these plans as a basis, there is a real possibility of transforming the image and economic significance of the entire Northwest.

The report highlights various factors that have a significant impact on the development of an innovation corridor:

• Accessibility and transport connections
• Integration into Berlin’s innovation ecosystem and development of an independent leading international counterpart
• Enhancing the appeal as a residential location for a new national and international community of professionals and executives
• Use of the area’s potential by providing land for expansion and resettlement space 

• Weak second quarter on the office real estate investment market in B locations
• The investment market for office real estate outside the Top 7 locations reached a transaction volume of almost €2.9bn in the first half of 2022 
• Compared with the same period in 2021, this marks growth of 15% 
• B locations and major provincials captured a share of 21% in the overall investment market
• In line with the market as a whole, the second quarter with €800m proved to be significantly weaker than the first quarter
• The portfolio share came in at around 34%, which is considerably higher than the year-earlier figure (23%)
• Core and core-plus properties remain in strong demand (67% of transaction volume); value-add and opportunistic investment properties accounted for around one third of total volume
• Outlook: diverging price expectations among buyers and sellers will level off in the course of the year and markets will pick up again

• With 197,000 sq m of take-up in the second quarter, office take-up increased by 42% year-on-year and with a total take-up of 335,600 sq m for the first half of 2022, it is at a slightly higher level than the ten-year average for the first six months (328,000 sq m)
• The prime rent has increased significantly both year-on-year and quarter-on-quarter and is now €42.50/sq m/month, a further increase is expected by the end of the year
• Compared to the first half of 2021 the weighted average rent also increased by 6% to €28.76/sq m/month
• Despite the increase in the vacancy rate (excluding space for subletting) by 0.5%-points to 3.2%, it still remains below the average vacancy rate of the Top 5 office markets of 4.8%
• The transaction volume in the first half of the year reached around €5.48bn, 13% less than in the same period of the previous year; office was the strongest asset class, their transaction volume accounted for half of the total volume
• In view of the geopolitical situation and the increased financing costs, the prime yield in CBD locations rose by 0.15%-points to 2.65% compared to the first quarter of 2022; yields in the city fringe (+0.2%-points) and in the periphery (+0.5%-points) increased more strongly, reflecting the further differentiation of locations

• In the first half of the year, take-up of 389,400 sq m was around 72% higher than in the corresponding period of the previous year
• A total of 13 transactions above the 5,000 sq m mark contributed 39% of the total take-up. In the same period last year there were only seven of these
• More than half of the take-up was accounted for by project developments, where the increasingly high demands on space quality can be realised and also all sustainability aspects can be taken into account
• Office rents continued their upward trend. The achievable prime rent is currently €43.50/sq m /month and has increased by 10% since last year. The weighted average rent even increased by 12% to €23.51/sq m/month
• Compared to the previous year, there is currently 12% more vacant office space on the Munich market (excl. available subletting space). The vacancy rate increased by 0.5%-points to 4.2%

• Düsseldorf office and investment market on course for recovery; strong rental growth offsets rising yields
• Office leasing market grew by 57% to 164,900sq m in the first half of the year
• Prime office rent up 5%, average rent up 11%
• Vacancy rate increased to 8.8%
• Prime office yield increased by 0.15%-points to 2.90%

• Take-up in the first quarter was 108,100 sq m, supported by a high owner-occupier share of 34%. Compared to the same quarter last year, an increase of 12% was achieved
• Closely linked to the three major deals over 5,000 sq m, the highest take-up shares of 31% and 16% were accounted for by the submarkets Eschborn and Europa City, respectively
• The high proportion of project developments on the total take-up of 40% reflects the enormous current demand for new high-quality office space
• The prime rent for prime office space rose by 3% year-on-year to €45.50 /sq m/month, while the weighted average rent (rolling 12 months) decreased by 4% due to the low number of larger, high-priced transactions
• Compared to the last quarter, the vacancy rate (excl. subletting space) fell by 0.4%-points to 7.8% but was 1.2%-points higher than in the previous year. In absolute numbers, office vacancy increased by 19% to 903,800 sq m
• Compared to the same quarter of the previous year, the prime office yield declined slightly by 0.2%-points to 2.70%

• In 2021, a further increase in investor interest in healthcare real estate could be observed – however, demand exceeds existing supply many times over
• Care homes still the most important segment at €2.4bn (-1% y/y), followed by assisted living at €772m (+50% y/y) and medical office buildings at €388m (+72% y/y)
• Strong demand caused prime yields to decline

• Turnover growth in the retail sector – despite the lockdowns
• Food retail is the stable winner throughout the crisis
• eCommerce: disproportionately high growth during the pandemic
• Omnichannel takes hold across all segments
• Increasing importance of ESG criteria in the real estate portfolio
• Non-food discounters show their comparative resilience
• Investor’s propensity to buy is greater compared to the last few years
• Investment focus on property types with a supply function
• Sustainability and digitalisation as drivers of innovation and efficiency
• Expert survey: further hikes in purchase prices expected

• As in most European countries, the government issued a worldwide travel warning due to Covid-19 and advised against non-essential domestic and international travel. This led to a 40% drop in overnight stays in Germany overall and a staggering 65% on average in the top cities in 2020. Demand fell even further during the first months of 2021. Only the summer showed goof results in resort destinations and  cities with touristic appeal.
• Due to the strong economic recovery and a high proportion of German guests (80% of all travelers), we expect demand for overnight stays to grow steadily but slowly in the coming years. However, we do not expect a return to pre-Covid levels for business hotels until 2023/24, depending on location. On the other hand, most resort hotels have already reached pre-Covid occupancy levels during this summer.
• Despite massive government aid and temporary rent reductions or deferrals offered by many owners, tenants bear the biggest burden as a result of Covid-19, producing highly negative cash flows from operation. Slowly increasing demand coupled with cost-saving measures and investment in digital software will help operators to return back to profitability. There will be no "business as usual"  however. Covid-19 is a turning point for the global hotel industry.
• Investments in hotel real estate have roughly halved last year and have stabilized at this level so far this year. Nevertheless, demand for hotel acquisitions continues to be high, driven mostly by strategic hotel investors. These investors focus very much on core assets run by good covenant tenants.

• Just under 40% of the office space expected to be completed in Berlin by the end of 2021 will consist of refurbishments
• For historical reasons, Berlin has a lot of catching up to do when it comes to modernizing its office space and renovating it to make it more energy-efficient
• Redevelopments are pre-leased for the most part and add less speculative space to the total stock
• Weighted average rents are more dynamic in refurbishments than on the market as a whole - tenants continue to be willing to pay for high-quality refurbished space

• The German commercial real estate investment market is visibly recovering from the pandemic. However, supply remains the limiting factor, particularly in the core and core-plus segments, so that the unabatedly high investor demand cannot be met with suitable product.
• At €62.1bn, commercial transaction volume in 2021 was just under 5% above the previous year's result and only 8% below the record year of 2019
• The ten-year average was exceeded by 32%
• The share of the top 7 locations Berlin, Düsseldorf, Frankfurt, Hamburg, Cologne, Munich and Stuttgart increased to 57%, up from 53% in 2020
• Berlin, Cologne, Munich and Stuttgart with significantly higher transaction volumes than in the previous year; supply-related declines in Düsseldorf, Frankfurt and Hamburg
• Prime yields continued to decline across asset classes
• Domestic investors dominate the market even more strongly than before
• Outlook: high investment momentum should ensure transaction volume of around €60bn; moderate continuation of yield compression

• Central bank support reaches record levels and may make their policy stand softer long term
• Growing money supply and lower for longer rates have increased asset prices, those in turn may suppress consumer price inflation for good
• The very low forward rates point to very comfortable refinancing scenarios even for low yielding properties
• Overall financial markets point to a stabilizing environment for real estate and other hard assets