PERE real estate roundtable: The challenge of unlocking Germany’s potential

At its recent Germany roundtable, PERE (Private Equity in Real Estate) magazine brought together leading investors and managers to discuss how to unlock the country's real estate potential. René Dubois, Munich Managing Partner at Dentons, was part of the conversation, along with senior representatives from Ardian, Nuveen Real Estate, PGIM and Redevco.

Several key themes emerged from the discussion:

• Germany is at a fragile turning point. After several difficult years, GDP has inched back to growth and real estate investment picked up in the second half of 2025, but the recovery is vulnerable to external shocks such as the war in the Middle East and related energy and inflation risks.
• Sector views: residential dominant but early in recovery; prime ESG offices and 'necessity-driven' assets favored. Residential remains the largest asset class but is at the start of a slow recovery, with developers only just beginning new projects and exit routes for subsidized housing constrained. Prime, ESG-compliant city-center offices command record rents in Munich, while outdated secondary offices are seen mainly as conversion plays (e.g., to PBSA). Necessity-driven segments such as food-anchored retail, urban living, logistics, data centers and other "assets close to the people" are viewed as the most attractive today.
• Shift in capital: fewer large core deals, more opportunistic and "Anglo-Saxon" money. A lack of domestic core capital has reduced deal sizes; family offices and opportunistic foreign investors are more active, while German pension and insurance capital is largely sidelined. This changes return requirements and exit assumptions for value-add strategies.
• Significant capital is waiting on the sidelines. René Dubois highlighted that substantial capital has been reallocated from the US to Europe and is "still waiting" due to a lack of suitable investment opportunities in Germany.
• Pricing and volatility are reshaping dealmaking. Transaction volumes remain below previous years as buyer and seller expectations have not fully converged. Uncertainty around interest rates, margins and inflation requires wider underwriting buffers and is also delaying or re-pricing deals.
• Market activity is driven by special situations and resilient sectors. René Dubois noted that most current transactions are special situations (restructurings, insolvencies, market exits), with more typical deals largely confined to food-anchored retail and residential.
• Regulation and rent control debates are key structural issues. Participants argued that Germany is not exploiting its full economic potential partly because of over-regulation, especially in residential. René Dubois stressed that rent caps (if introduced) could have a huge impact on the sector, while others pointed to new "Construction Turbo" rules as a rare pro-development initiative.
• Policy, public spending and the need for a strategic vision. Expected increases in German defense and infrastructure spending should support sectors such as logistics and industrial outdoor storage, but the effect will be gradual. René Dubois underlined that fiscal measures alone are not enough: Germany needs regulatory reform and a clear political strategy to unlock its full potential.

To read the full report, download PERE's feature article on the roundtable.

If you would like to discuss what these themes mean for your Germany or pan-European real estate strategy, please feel free to contact René Dubois or David Zafra Carollo from our Real Estate team in Germany.

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