Project developments in big German cities rise 12%
Investment in project developments planned between 2012-2019 in the top seven German cities has grown by 12% from last year to €112bn buoyed by rising rents, prices and larger space volumes, says Berlin-based research firm bulwiengesa. (The research group produce an annual rolling study covering a seven year period – last year’s study covered 2011-2018).
Total development space rose by 7% to 25.54 million sqm., bulwiengesa found in its analysis of the 3,440 property projects currently in planning and building stages in the seven largest cities (Berlin, Munich, Hamburg, Düsseldorf, Cologne, Frankfurt and Stuttgart.
Space planned has increased continually over the past three years and now reached a record 11 million sqm. According to BulwienGesa board member Andreas Schulten, “Due to the consistently low interest rates in the Eurozone, more private and institutional capital in the billions is flooding into the German property market, which has been has been fuelling price growth in the past years. The market is stretched, with high demand, rising competition and plot prices rising exponentially.”
Most growth was seen occurring in the residential sector, which was responsible for 80% of total space volume; most activity was registered in Berlin. “The city’s lead will not be challenged in the future,” said Project Head Ellen Heinrich.
In the office segment, Frankfurt and Düsseldorf registered the highest space growth by 16%, followed by 11% in Berlin. Stuttgart and Hamburg lost 6% and 8% volume compared to last year, with Stuttgart continuing a three-year fall, while completion of a large project in Hamburg was postponed to after 2019.
The ranking list of Germany’s top developers also has a new Number 1 – The Bremen-headquartered Zech Group has displaced long-time leader Hochtief from the top spot. Zech and its subsidiaries including Art-Invest, Die Developer and Die Wohnkompanie booked a turnover of 725,000 sqm, up 31% on last year. In second place is Hochtief with 589,000 sqm, followed by pure residential developer NCC with 536,000 sqm.
Zech Group leads the table also for just office developments with 368,000 sqm, followed by Hochtief (317,000 sqm), and then CA Immo (232,000 sqm). In the much more granular retail development sector, the leader is Berlin’s High Gain House Investment (196,000), followed by the Zech Group with 66,000 sqm and Bayerische Hausbau (58,000 sqm).
Germany’s Top 10 Project Developers:
1. Zech Group
2. Hochtief
3. NCC
4. CA Immo
5. CG Gruppe
6. Bayerische Hausbau
7. Wilma Wohnbau
8. Baywobau
9. Strabag
10. BPD