German real estate sentiment continued its downward trend in February, marking the third consecutive monthly decline, according to the latest Deutsche Hypo Immobilienklima index. The index fell by 3.2% to 90.6 points in the February survey of approximately 1,000 real estate experts.
The decline was broad-based, with both investment and earnings climates experiencing setbacks. The investment climate decreased by 3.7% to 88.8 points, while the earnings climate (rental income) fell by 2.5% to 92.5 points. Only the office climate remained relatively stable, though at a low level.
The commercial property sector experienced particularly sharp declines. The trade climate registered the largest drop, falling 8.3% to 78.1 points. The logistics climate, which had remained above 100 points for over two years, dipped below that threshold, losing 4.1% to reach 98.6 points. Residential property also saw a slight decrease, falling 2.2% to 142.9 points, but continued to lead all asset classes.
The hotel climate also experienced a slight decline, decreasing 2.4% to 103.3 points, surpassing the logistics climate. The office climate remained at a low 73.6 points.
José Luis Calderón Martinez, Head of Central Acquisition at Deutsche Hypo, attributed the renewed deterioration in sentiment to a challenging combination of geopolitical tensions, structural transformation pressures, and regulatory adjustments. He emphasized the increasing importance of strategically developing existing real estate portfolios.
According to Haufe, ESG-compliant, energy-efficient properties continue to gain importance for rentability, value stability, and financing. The February report indicates that while the mood among experts remains subdued, opportunities exist through the further development of existing properties, a theme expected to be crucial throughout 2026.
The Deutsche Hypo Immobilienklima is designed to identify turning points in the real estate market and provide insights for strategic economic decision-making, according to Deutsche Hypo. The index’s latest reading suggests continued headwinds for the German property market.