The light at the end of the tunnel is slowly coming into view, but the coronavirus still has large parts of Germany firmly in its grip and continues to affect many people in their professional and private lives. It is clear that the measures and restrictions imposed on public life are having varying effects on the rental and investment market.
The investment market
The first lockdown in March 2020 led to a significant slowdown in most business activities in the investment sector. However, the initial shock was quickly overcome and most returned to their previous performance levels after a short time.
Thanks to low interest rates and high liquidity among most investors, investment pressure remained high, leading to a similarly high transaction volume as before the coronavirus crisis. The "special-purpose real estate" asset class stood out in particular, with particularly high demand observed over the course of the year. Logistics properties in particular enjoyed exceptional popularity thanks to the growth in online retail. Food, drugstore, and DIY stores also performed well with stable sales.
As is well known, the hotel and restaurant industry is among the clear losers of the coronavirus crisis. These sectors are particularly hard hit by travel and accommodation restrictions. If restrictions remain in place for much longer, they may even face relegation to niche markets.
The rental market
The rental business has been significantly affected by the constant on/off mode resulting from the second and third waves. Overall, a decline in rental activity can be observed. One reason for this is the trend toward working from home, which has taken hold in many companies. This trend is one of the reasons why many of the large rental deals are being put on hold or even canceled altogether.
Parallels to the investment market can also be seen. For example, the logistics, food retail, and drugstore sectors are benefiting from the coronavirus crisis, while outdoor dining and small retailers are only slowly recovering with further easing of restrictions.
The German real estate market is proving to be very solid and offers many investors a safe haven despite the circumstances.
