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Deutsche GRI 2019: RE Leaders Find Reasons to be Optimistic in Late Cycle

1 MIN READMay 15, 2019

Where are Germany’s real estate markets headed in the future? Participants at this year’s Deutsche GRI debated this question with the aim to uncover where to find returns in the late cycle. Samir Amichi, Blackstone opened the event with his personal predictions on the asset class that will come out on top in Germany as well as global macro trends disrupting acquisition and pricing strategies for core assets.

GRI Club Members and event participants were treated to dedicated discussion streams on finance and investment, commercial, residential and an ‘innovation afternoon’.

Are the markets demanding more risk?

Both debt and equity markets saw a positive disposition with continued low interest rates, while some suggested that the markets’ low yields put pressure on investors to increase their level of risk. Others agreed that chances for mezzanine investments were best found in Berlin.  

Coeverything?

To counteract the late stage of the cycle, a popular topic were new models in the different asset classes. In particular coliving and modular housing, flexible workspaces and city logistics were perceived as potential ways to break out of the modest yields, yet doubts were raised over the long term performance of such assets in a downturn and what cities should look like in the near future.

Is the sky the limit for residential developments?

The biggest challenges that attendees identified centred around sky high construction costs, increases in rental prices and the simmering political tensions that could potentially even lead to government driven expropriation of landlords. In particular, affordable housing was a key subject combining these concern

Are Core projects still profitable?

Especially, opportunistic and value-add schemes were regarded as the best bet going forward for local investors, in order to generate decent yields. The yield hunt played a central role in city specific discussions focusing on the state of Berlin and Frankfurt. Dr Michael Heise, Allianz SE, gave his insights into different economic scenarios that could potentially lead to a German downturn.

Deutsche GRI is part of the Deutsche GRI Club which features similar events throughout the year such as Europe GRI and Deutsche GRI Wohnen.


Check out some of the main moments of Deutsche GRI 2019

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