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Develop-and-Hold-Study 2021

New housing construction in am era of low interest rates and social urban development

Dear Readers,

For the third time in a row, we have worked handin-hand with bulwiengesa to precisely examine the develop-and-hold residential project development market in Germany’s seven Class-A cities. Our current study confirms the trend we have seen in recent years: The develop-and-hold segment is becoming more and more important.

Currently, 6.2 million m2 of residential space is being developed in Germany’s top seven cities as part of develop-and-hold projects scheduled to be completed by 2025. A year ago, this figure was 5.4 million m2 (by 2024). The calculated project volume increased from approximately EUR 35 billion to EUR 43 billion. It is therefore apparent that there is significant movement in rental apartment construction. However, it is still not enough to meet demand.

A closer look at the larger-scale projects being developed additionally reveals that in many cities, publicsector or municipal housing companies are still the top dogs, but private-sector developers are increasing in importance. If the aim is to alleviate the housing shortage in the foreseeable future, no hurdles should be placed in their way. This is a clear message to the new federal government – but it is also quite explicitly directed at the new Senate in Berlin.

In the special section of the study this time, we discuss sustainability and the three-letter acronym “ESG,” along with the related requirements, particularly for housing construction and the leasing of existing properties. Johannes Kreißig, CEO of the German Sustainable Building Council (Deutsche Gesellschaft für Nachhaltiges Bauen - DGNB) was kind enough to provide us with an interview in which he explains the current regulatory situation. Read about for yourself!

Lahcen Knapp
CEO Empira Goup

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