EXPO REAL 2025: Real estate market undergoing structural change

09/09/2025
Reading time 5 Minutes

EXPO REAL 2025 will take place in a market environment characterized by uncertainty, pressure to adapt, and new opportunities. While transactions are increasingly focusing on existing properties with development potential, new construction remains limited due to regulatory and economic barriers. At the same time, utilization concepts are changing – especially in inner-city locations – presenting new challenges for investors and project developers alike.

In the financing sector, the market is facing a wave of refinancing, which is being met with more restrictive lending criteria. The availability of traditional and mezzanine financing instruments is limited, leading to longer negotiation cycles and increased restructuring.

Real estate valuation needs to adapt as well: volatile markets and changing user requirements call for flexible valuation approaches and technical support – without replacing the critical eye of experienced valuers.

Our experts' detailed outlook:

Real estate market: Between conversion, space shortages, and construction crisis – the real estate market is undergoing structural change

The real estate market in Germany will continue to present a mixed picture in 2025. While some segments are still suffering from structural pressures, new opportunities are opening up in others – not least as a result of regulatory developments and changing utilization requirements.

Residential construction: The framework conditions for new construction projects remain tense. Approval processes continue to be complex and time-consuming, while construction costs remain high. At the same time, serial construction is gaining in importance. The construction of modular buildings is accompanied by new requirements for planning and contract structures. Tax incentives (such as increased depreciation) must be carefully examined on a case-by-case basis, taking into account all necessary requirements.

Due to the obstacles to new construction, demand for existing properties continues to rise. Assets with development potential are particularly high in demand. Building in existing structures regularly raises legal questions regarding conversion, renovation, and marketing.

Inner-city locations: The decline of traditional retail has intensified the debate about the future of urban spaces. Multi-use concepts – such as combining living, working, and leisure – are becoming increasingly popular. Building regulations, historic preservation requirements, and tenancy law are key challenges that must be considered at an early stage.

Logistics and commerce: The ongoing e-commerce boom continues to drive demand for logistics space. However, available space remains limited, especially in locations with good transport links. This leads to intense competition and complex transaction processes, in which legal clarity regarding rights of use, development, and financing plays a central role.

The legal framework is becoming increasingly crucial for the successful implementation of real estate projects – whether in development, use, or sale. Forward-looking legal support can help identify risks at an early stage and make effective use of creative leeway.

your contacts

Dr. Hendrik Theismann

Michael Mehler

Financing: Debt maturity wall meets restrictive lenders – will there be a new wave of NPLs?

The refinancing wave is rolling: billions in refinancing are due in the real estate financing market over the next 15 months.

This applies to traditional bank financing as well as subordinated loans and mezzanine loans. This refinancing requirement is being met by a shrinking number of banks willing to lend, which are also offering significantly more conservative LTVs and maturities.

The mezzanine financing market has largely dried up. In some cases, whole-loan financing is available as a substitute, mostly from specialized credit funds. However, it is unlikely that the whole-loan market will be able to refinance all expiring mezzanine/senior structures.

Therefore, numerous standstill solutions with or without subsequent liquidation/sale are still to be expected. Further insolvencies and restructurings are to be expected. It remains to be seen whether, as in the last financial crisis, there will also be increased NPL activity on the part of banks and specialized purchasers.

In any case, refinancing takes much longer in today's market; therefore, discussions with potential refinancers should be sought up to a year before the maturity of a current loan.

your contact

Bernhard Gemmel

Valuation: Volatile markets, changing user requirements – changing valuation realities

Volatile markets, changing user requirements, and cautious investment behavior characterize the current situation on the real estate market. These developments have a direct impact on valuation strategies – for commercial, residential, and special-purpose properties alike.

Market uncertainty requires greater methodological flexibility. Traditional valuation approaches are increasingly reaching their limits as usage cycles become shorter and regulatory intervention restricts discretionary scope.

At the same time, technical tools are becoming increasingly important, for example, for scenario analysis or dynamic modeling. The use of agentic AI will also enable significant efficiency gains in the area of real estate valuation in the medium term. Nevertheless, the role of experienced appraisers remains central: particularly in complex individual cases, the ability to identify gaps in reasoning is required in order to represent market value in a substantiated and realistic manner.

Uncertain markets are not bad markets – they are markets in which valuation quality becomes apparent. Those who not only reflect the market but also critically question it can create reliable values that provide guidance to investors and users.

your contact

Andreas Röhr

Let's talk – at EXPO REAL 2025

Current developments in the real estate market raise complex questions – about transactions, financing solutions, and valuation approaches. Especially in an environment characterized by uncertainty and structural change, well-founded assessments and dialogue with market participants are particularly valuable.

We look forward to discussing these topics with you in person at EXPO REAL 2025. Whether you would like to discuss specific projects, share strategic considerations, or simply gain an expert perspective on the market, we would be happy to talk to you.

Feel free to make an appointment in advance or visit us directly on site at booth B3.125.