News/Real Estate Finance

REECOX – German real estate economy brings the year to a positive close

Deutsche Hypo REECOX at annual high

Following the ongoing recovery in the third quarter, the REECOX Germany rose again by 2.0 % in the fourth quarter. At 311 points, it not only surpasses the level at the beginning of the year, but also represents the highest level in 2020.

Andreas Rehfus, Member of the Board of Managing Directors at Deutsche Hypo: “This recovery was largely driven by developments in the stock and real estate indices. A clear stabilisation was observed in all countries monitored. Overall, however, only the REECOX Germany was able to show a positive development of 2.2 % in 2020. The other countries have not yet returned to the pre-crisis levels. Increasing vaccination coverage will now be of particular importance for the further recovery, so that the spread of the virus can be contained in the long term.”

Once every quarter, the REECOX provides an overview of real estate market economy in Germany, France, the UK, Poland, Spain and the Netherlands. The index for each of the six countries is calculated using five input variables. In Germany, those variables are the DAX, the DIMAX, the European Commission’s Economic Sentiment Indicator for Germany, the basic rate of interest pursuant to Section 247 of the German Civil Code (BGB) and the interest rate for ten-year German government bonds. Once again, the lion’s share of support for the positive trend came from stock markets. The leading German index, the DAX, saw positive development overall, gaining 7.5 % quarter on quarter to stand at just over 13,700 points at the end of the year, recording a new all-time high. Germany’s DIMAX real estate share index showed a similar development and also closed the quarter at a record high of 999 points. By contrast, the business climate as measured by the European Sentiment Indicator (ESI) in Germany fell by 1.3 %.

José Luis Calderón Martínez, Head of Central Acquisition and Head of the Berlin Office, says: “Looking back at 2020 shows that the commercial real estate market continued to be an attractive and reliable investment opportunity. Despite the impact of the coronavirus pandemic, the fourth quarter was also robust, and continued buoyant investor demand was observed in the attractive residential, logistics and office real estate asset classes.”