Chapter 11

Infrastructure

Germany Real Estate Market Outlook 2024

Real Estate Market Outlook 2024 (EN)

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Key Takeaways 

  • New EU directives
    In the context of accelerating the decarbonization of transport, the EU is introducing regulations aimed at facilitating the charging of electric vehicles. Accordingly, public charging stations are to be provided, each with an EV charging point capable of servicing ten electric cars.
  • Advantages for property owners
    The mobility transition offers property owners a possibility of participating in the most recent trends. Along with additional rental income and fulfilling ESG requirements, partnerships with charge point operators (CPOs) offer a number of advantages.
  • Rising demand and insufficient available space
    Charge-point destinations in business parks and retail locations increases footfall. Popularity is visibly growing, especially in the case of land in good locations, and there is partly not enough land available.
  • 5G network expansion creating new opportunities for property owners 
    Along with antennas, new decentralized data center space in existing buildings is also required for the nationwide expansion of Germany’s 5G network.   
  • Exploitation of difficult-to-market vacant space
    New space is needed to accommodate the decentralized distribution nodes necessary for the 5G infrastructure, particularly in urban areas. Vacant space that is otherwise difficult to market is ideal for this purpose. 

Mobility transition: charging infrastructure for electromobility

Germany is facing huge challenges if it wants to achieve its e-mobility goals. By 2030, 15 million e-vehicles are predicted to be on German roads, with one million public charging points available. The EU directive prescribes one public charging station for every ten electric cars. Consequently, the level targeted for 2023 needs to be significantly higher than that set by the German government. The current rate of expansion has to accelerate significantly in order to achieve this target. Over the past year, around 70 new public charging points were installed every working day. However, fulfilling the target stipulated by the German government requires seven times as many charging points to be installed per working day. Consequently, around 500 new charging stations need to go online per day.

A nationwide charging infrastructure tied to requirements will be decisive for the electrification of private transport in Germany. Adjusting the existing transport network in accordance with rising usage is necessary in the context of the energy transition in the transport sector. No disadvantage should arise from using an electric car compared with a combustion vehicle. Going forward, this also applies to using an electric vehicle for long distance travel and equally to shopping for everyday needs.  The sparsely populated and less frequented regions are also not to be neglected in the long term. A strategy based on and supplementing the existing structures is recommended for promoting the expansion of the charging infrastructure.

In September 2023, the federal government awarded regional lots as part of the "Deutschlandnetz" tender. This initiative provides for companies installing rapid charging stations in defined areas and receiving subsidies in compensation. Ten companies in total are to install and operate 900 sites with approximately 8,000 new HPC (High Power Charging) points for electric vehicles.
Development of charging points in Germany, 2017-2023
Abb_24_Development of charging points in Germany
Source: Bundesnetzagentur 

The mobility transition also offers property owners and occupiers the opportunity of participating in this trend by enhancing the sustainability of properties by implementing charging points. Along with additional rental income and fulfilling ESG requirements, partnerships with charge point operators (CPOs) and in compliance with the latest statutory requirements offer a number of advantages. In addition to different types of charging, growing disparity in the quality of CPO performance is detectable. Competent advice in selecting the right CPO for real estate portfolios prevent subsequent dissatisfaction caused by technically unreliable charging points. 

5G: expansion of the network infrastructure in Germany creates opportunities for property owners

By 2030, state-of-the-art mobile radio standard is to have been installed wherever people live, work or are on the road – that is the German government’s Gigabit Strategy. Mobile network operators are responsible for planning the network expansion and for erecting new mobile phone masts.

Comprehensive coverage with new antennas will also have to be connected up and network with many decentralized distribution nodes along the fiber optic networks.
Together with customary outdoor installations, the expansion of these smaller and larger “data center units” will also increasingly require solutions in existing stock, especially in urban environments.

Consequently, this demand will offer property owners fresh opportunities of repurchasing difficult-to-market (vacant) space in or on office properties, warehouse and logistics properties, retail real estate, multi-storey car parks etc., for this purpose. Given the substantial funds they invest in these data center units, network operators are looking for long-dated leases, which offers property owners the opportunity of benefiting from steady cash flows from tenants with good credit ratings.

Chapter ESG
Chapter 10 Data Centres