GERMANY Trends and Developments Contributed by: Carsten Loll, Otto von Gruben, Ivo Veit Wanwitz and Sebastian von Hornung, Latham & Watkins LLP
Sustainability compliance has become a key value driver, shifting from a peripheral consideration to a core component of property valuation. With the EU Energy Performance of Buildings Directive required to be transposed into national law by May 2026, along - side stricter requirements under the Building Energy Act, ESG readiness now directly affects rentability, financial viability, and exitability. Residential real estate is expected to remain a core investment pillar due to ongoing supply constraints, although regulatory compliance will remain challenging. Investors must navigate rent control mechanisms, affordability poli - cies, and, particularly in Berlin, heightened political and regulatory risk.
Overall, Germany’s PERE market remains attractive, although it is undergoing a strategic shift towards alternative investments, flexible financing solutions, and ESG-aligned opportunities. Investors able to adapt to this evolving environment by combining qual - ity-focused asset selection with a careful approach to Germany’s increasingly complex regulatory frame - work are likely to access resilient assets capable of delivering sustainable returns in a market shaped by structural adjustment rather than cyclical exuberance.
271 CHAMBERS.COM
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