Hanover real estate market: crises leave their mark

The economic challenges for the real estate market in Germany and the Hannover Region will remain high in 2023: inflation, rising interest rates and energy costs, sometimes further supply bottlenecks, the after-effects of the coronavirus pandemic and the impact of the war in Ukraine are adding up to a "polycrisis". The regional real estate market is not unaffected by this situation either, asshownby the2023Real Estate Market Report, which the Hannover Region and the state capital of Hannover have now presented. The conclusion of the analysis: the multitude of crises is shaping the regional real estate industry and continues to significantly slow down the investment decisions of players on both the supply and demand side.

• There is a noticeable reluctance to invest in officeproperties. This is evident in times of working from home and digitalization with regard to the design and location of workplaces and the reduction in space that this is likely to entail.
• The residential real estatemarket is facing tougher challenges, particularly in connection with inflation, rising interest rates and sharp increases in energy costs - too few apartments are being built overall.
• After difficult years, the hotel realestate market is looking back on a significant recovery in overnight stays in 2022, hotels are gradually expanding their supply capacities again and are counting on a continued recovery this year and next.
• Meanwhile, the gaps in retailproperties are becoming more visible in all locations, although people have returned to the city and regional centers.
• And in the area of real estatefor logistics and production, there is a lack of available space to meet the booming demand.

The debateon the sustainability ofreal estate is hovering over all submarkets and has not only gained momentum as a result of the discussions on the amendment of the Building Energy Act. Despite the many challenges, the heads of the region and the state capital of Hanover as well as the consultancy firm Bulwiengesa, which was commissioned to carry out the analysis, are optimistic, as the development also offers opportunities within the scope of the possibilities.

Together with 31 partner companies from the real estate industry, Hannover Region compiles data, trends and market sentiment on all submarkets of the regional real estate industry every year and prepares these together with the consulting firm bulwiengesa AG. Current market data, assessments and forecasts for the office, logistics, residential, retail and hotel submarkets will also be presented at the international commercial real estate trade fair EXPOREAL in Munich from October 4 to 6, 2023.

The 2023 real estate market report is available for download atwww.immobilienmarktbericht-hannover.debereit.The website also contains overview maps of market-defining properties in all submarkets as well as information on selected current projects.