The property market is in a somewhat challenging phase, but it also offers great opportunities. The geopolitical uncertainties and subdued economic outlook are likely to continue for the foreseeable future. Changed financing conditions, regulatory requirements and the necessity for sustainable investments are also imposing new tasks on market participants. However, it is in precisely this kind of environment where new opportunities arise. Those who do not merely adapt to the changed environment, but actively shape change and develop future-oriented solutions, will emerge from this transition strengthened.

There are first signs of a moderate recovery. This year’s MIPIM was again shaped by speakers taking a pragmatic look ahead. It was evident that international investors are turning to Germany in larger numbers again – many now speak about ‘German chance’ instead of ‘German angst’. There are investment opportunities in other regions as well, despite demanding markets. The use types ‘Logistics’ and ‘Residential’, in particular, are promising investments. In addition, investors should selectively look into opportunities offered by other segments – such as ‘Office’ and ‘Hotel’. However, the differentiation and qualitative dichotomy between the market segments are likely to continue in 2025 – for example between modern and sustainable offices in central locations and standard office space in less sought-after locations. Depending on the location, some considerable differences in attractiveness are becoming apparent in other asset classes, as well. This is why a targeted investment strategy is essential.

Decisive action is essential, particularly in challenging times. Hence, not only is it important to understand when to invest, but also to consequently use opportunities which arise. Moreover, in-depth market expertise and a proactive approach are vital. 

Our local teams – in Germany, France, Spain, the Netherlands, Ireland, Belgium, Luxembourg and in Australia – are close to the markets. This local presence allows us to react quickly on market trends. Our approach is primarily based on active asset management, targeted ESG-related measures and a thorough market selection process. It is what makes our portfolio future-proof and creates long-term value for our investors.

A best-practice example of this is one of our office buildings in Dublin. We bought this property for the pension scheme of a specialised institutional alternative investment fund (AIF) in 2027. Under our efficient and active asset management, the approximately 6,600 thousand square-metre 19th-century building is not only being rented long-term, but also sustainably developed. We have invested in the improvement of the ESG performance of the office and commercial building and significantly upgraded the energy rating. Not only have we been able to satisfy the sustainability needs of users in this way, but we have also made the entire property much more competitive. This has enabled the existing tenancy agreements to be extended on a long-term basis. The building has continued to be fully let and will ensure an attractive cash flow during the coming ten years.

The logistics centre Emmerich II in the German federal state of North Rhine-Westphalia is another project in line with our strategy. The property was acquired in 2023 for our thematic investment fund Deutschland II. Thanks to highest standards in terms of energy efficiency, the German Sustainable Building Council (DGNB) awarded the complex a ‘Certificate in Gold’ . Equipped with photovoltaic systems and heat pumps, the building generates sustainable electricity and heat. This has a positive impact on operating costs, and the property is compliant with the relevant ESG standards. The generated green energy almost entirely covers the annual electricity needs of the logistics centre. A part of the energy produced on site is fed back into the local electricity grid. Long-term tenant of the entire property is the logistics service provider Fiege, a renowned tenant of good credit standing. Last but not least, the modular construction method allows for a high adaptability. 

The Irish residential property market currently offers very promising investment opportunities. We have a track record of resilience in this segment, thanks not least to our local team. The Emerald Isle is now one of Real I.S.’s four biggest investment markets. Ireland is noted for its strong economy and a high growth in population. The demand for residential space there is higher than ever before: while Dublin remains strong as a centre of economic activity, the surrounding region is growing even faster. By 2042, the counties Louth, Meath, Kildare and Wicklow, for example, are likely to see population growth of 19.7 percent, the centre of Dublin by around eight percent. The expansion of the transport system will further improve the accessibility of the Dublin metropolitan area. This will have a positive impact on demand and on property appreciation in well-connected areas. In the past ten years rent prices in the Dublin metropolitan area have more than doubled. However, rents are still around 20 percent lower than in the city centre.

Since the market outlook for Irish residential properties is promising, we continue to take advantage of the opportunities, for example for our Ireland Residential Fund. As regards the environmental aspects of the properties, for our Irish fund we pursue an investment strategy that complies with Article 8 of the EU Sustainable Finance Disclosure Regulation in order to fulfil our own quality standards and the growing requirements with regard to sustainable investment.

The current market environment is challenging, but there also are promising trends. With expert knowledge, far-sightedness and courage, it is possible to take advantage of attractive investment opportunities, even in the current tight market phase. Real I.S. focuses on diversification, ESG-compliant investments and active asset management. The company takes an approach that creates stability as well as space for new opportunities. Our high occupancy rate of 94.94 percent across all our products is proof of the success of our strategic approach.

At the end of my first half year at Real I.S., I am looking ahead with confidence – and looking forward to continuing my role in actively shaping the future of Real I.S., together with our investors, tenants and partners. With a strong team and a clearly defined strategy, we are prepared to embrace opportunities, and we will continue to make a significant impact in the market in 2025.