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Germany's real estate professionals remain divided on when transaction activity will meaningfully recover, with 44% expecting improvement in 2026 and 36% looking to 2027, according to Berlin Hyp's annual Trendbarometer survey conducted at Expo REAL. The poll of more than 650 industry participants reveals a market where deals are happening but completion rates remain modest, and family offices have emerged as the dominant active players.
The survey's headline finding captures ongoing uncertainty: only 12% of respondents expect the transaction upturn to arrive later than 2027, suggesting the industry believes recovery is coming but cannot agree on timing. "The transaction market is the most important indicator of the state of the real estate sector," said Sascha Klaus, chair of Berlin Hyp's board of management. "The results show where the key issues currently lie. The really big transactions are still lacking."
Background activity does not translate automatically into closed transactions. When asked what percentage of their company's deals would complete successfully in 2025, 32% cited a 40-60% success rate, while 31% reported 20-40%. Only 5% achieve completion rates exceeding 80%, indicating that for every deal that closes, at least one other falls apart during negotiations.
This low conversion rate reflects persistent pricing gaps between buyers and sellers, continued financing difficulties, and cautious decision-making on both sides. The market is active in discussions but selective in execution.
Who's active and how they're financing
Family offices topped the list of active players at 45%, followed by foreign investors at 33%. "The former presumably recognize opportunities for long-term investments in the current market situation," Berlin Hyp noted. "For foreign investors, the German market offers security and, despite all the challenges, a relatively stable economic situation." Private investors registered 22% and domestic institutional investors 20%. Notably, public sector activity scored just 8%, though this could change following the federal government's infrastructure investment package announcement.
The dominance of family offices aligns with broader market observations: these investors operate with patient capital, longer time horizons, and greater willingness to accept current market pricing than traditional institutional funds still anchored to historical return expectations.
With bank lending perceived as restrictive, alternative financing has become increasingly important. Private equity (44%) and credit funds (43%) dominate non-bank financing activity, followed by mezzanine capital (28%) and promissory note loans. "In view of the wave of refinancing that has already begun, these alternative financing options could become even more important," Berlin Hyp observed. The shift toward alternative lenders reflects both supply and demand dynamics: banks remain selective on asset quality and loan-to-value ratios, while borrowers face maturing debt from the low-rate era requiring refinancing at significantly higher costs.
Asset class preferences
When asked which asset class offers the most potential for near-term economic upturn, residential remained most favoured at 47% despite persistently low construction activity. The appeal appears rooted in stable rental income rather than development opportunity. Logistics followed at 23%, reflecting continued structural demand despite modest rental growth.
Offices scored just 9%, lagging market sentiment despite Klaus arguing that "the shift to sustainability and the increasing rediscovery of the office as an anchor point of corporate culture certainly offer opportunities here and there." Retail remained out of favour, with food-anchored properties at 8% and non-food at 4%, despite some positive operational signals.
The Trendbarometer paints a picture of gradual normalization rather than dramatic recovery. Transaction activity is occurring but selectively, with family offices and foreign capital willing to transact at pricing levels that continue to deter domestic institutional players. Deal completion rates below 50% suggest negotiations remain difficult, with both sides still adjusting expectations.
The prominence of alternative financing indicates the refinancing wave will be managed but at higher costs than the maturing debt. Institutional investors relying on traditional bank financing at historical LTV ratios may find deployment opportunities limited compared to those accessing credit funds and mezzanine capital.
Residential's continued appeal reflects its defensive characteristics in an uncertain environment, though the 47% figure masks the reality that new construction economics remain broken. The opportunities lie in existing stock rather than development, favouring buyers with operational capability over passive portfolio holders.
Most tellingly, the survey reveals an industry that expects improvement but remains unable to agree on timing. That uncertainty itself may be the most significant constraint on activity: participants who believe recovery is 12-24 months away have little incentive to transact urgently, prolonging the current standoff between buyers seeking further price discovery and sellers hoping to avoid distressed exits.
Berlin Hyp has conducted the Trendbarometer survey for over ten years. The current edition polled participants from 6-8 October during Expo REAL in Munich.