Country Report Germany Q4-2020
“The situation remains challenging for stationary retail and shopping centres.”

Dear readers,

“Looking back at 2020 shows that the commercial real estate market continued to be an attractive and reliable investment opportunity. Despite the impact of the coronavirus pandemic, the fourth quarter was also robust, and continued buoyant investor demand was observed in the attractive residential, logistics and office real estate asset classes. The agreement now reached between the EU and the UK on Brexit – after many failed discussions – also represents a ray of hope for Germany’s export-oriented trade sector. The situation remains challenging for stationary retail (except basic retail) and shopping centres, whose structural change has been accelerated by the pandemic. Increasing online trade in particular is contributing to a change in city centres. In the future, store closures and vacancies could jeopardise the attractiveness of urban centre areas, which make a significant contribution to inner-city life. Therefore, innovative concepts need to be developed to offer attractive city centres, which are essential for further good retail sales.”

José Luis Calderón Martínez

Contact

Mr José Luis Calderón Martínez
Head of Berlin Office

Phone: +49 511 3045 807
E-mail: Jose.Calderon@Deutsche-Hypo.de

German real estate economy brings the year to a positive close

Following the ongoing recovery in the third quarter, the REECOX Germany rose again by 2.0 % in the fourth quarter. At 311 points, it not only surpasses the level at the beginning of the year, but also represents the highest level in 2020. The fourth quarter of 2020 saw a sideways move: although the REECOX fell by 2.4 % in October, the losses were significantly offset in November and December by increases of 2.6 % and 1.9 %, respectively.

DAX and DIMAX record new highs

Once again, the positive development was mainly driven by the stock markets. Following a significant decline of 9.4 % in October, Germany’s leading index, the DAX, rose by 15.0 % in November, showing an overall positive performance of +7.5 % compared with the previous quarter. The DAX closed the year at just over 13,700 points, recording a new all-time high. The German DIMAX real estate share index recorded a similar development: after falling 4.3 % percent in October, it also recorded a new record high of 999 points at the end of the quarter. As a result, the overall quarterly performance, at +7.9 %, was slightly above the positive development of the leading German index, the DAX. By contrast, the business climate as measured by the European Sentiment Indicator (ESI) in Germany was unable to maintain the discernible recovery trend seen in the previous quarter: with an overall decline of 1.3 %, the business climate at the end of the fourth quarter stood at 94.3 points.

Synopsis of Input Variables and Real Estate Economic Situations Q4-2020

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q3-2010/2011/20Q4-20Delta (%)
Q3-20 / Q4-20
DE
up
up
do
eq
eq
304.9
297.6
305.3
311.0
2.0
GB
upup
up
up
eq
eq
179.7
180.8
178.2
185.3
3.1
PL
upup
up
do
eq
do
169.3
167.5
167.1
172.7
2.0
NL
upup
upup
up
eq
do
172.3
169.1
175.7
178.5
3.6
FR
upup
upup
dodo
eq
do
217.8
210.0
217.9
219.8
0.9
ES
upup
up
up
eq
do
166.7
165.9
167.3
169.6
1.7