In its "5-% Study", the analysis company Bulwiengesa examines the German real estate market in terms of its return potential. The recently published sixth edition of the study provides a market overview from the year 2020, taking into account investment prospects in the residential, commercial and office real estate markets. Using a dynamic model, the study identifies projected annual investments. The calculated return prospects of the respective real estate markets can be compared with other asset classes.
Using the so-called internal rate of return (IRR) method, the study determines the probable internal rate of return of an investment, based on a holding period of ten years. In addition to the asset classes of residential, hotel and office properties, the study also examines the real estate markets of micro apartments, shopping centers and retail parks, corporate and logistics properties. The evaluations relate to cash flow security and liquidity.
In the study, real estate is divided into core and non-core assets. In summary, it can be observed that above all production properties and industrial parks promise above-average returns. Both are above five percent in the base value for interest opportunities. The base value for office yields in A-markets, on the other hand, continues to decline and was around two percent in 2020. The situation is similar for residential yield opportunities in A-markets.
Source: Bulwiengesa
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