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Real Estate Monitor April 2025
Residential sector reassessment: Facing an 11.2% downturn in March
Our PwC Real Estate Monitor provides you with a range of monthly derived Real Estate Capital Market KPIs. Our analyses are based on major listed German Real Estate Companies and provide you with sound insights into developments in the real estate industry.
With more than 20 percent of national income before the automotive and engineering industries, the real estate industry is one of the largest economic sectors in Germany. The dynamic business environment opens up new growth opportunities, but also brings with it new challenges and risks. Market participants must ensure that they anticipate developments in the markets at an early stage. Therefore, their success depends to a large extent on valid market information. PwC’s Real Estate Monitor provides monthly information on key capital market benchmarks that highlight current trends in the real estate industry.
Significant gains for PwC Real Estate Index for residential (+6.9%) despite market fluctuations and geopolitical risks
In April 2025, the PwC Real Estate Indices for residential and commercial property holders increased. While the index for residential property holders grew by +6.9% on average to 162 points, the index for commercial property holders rose by +0.9% during the same period, reaching 203 points.
The German financial regulator, BaFin, has reduced the capital buffer requirement for banks specific to residential property loans from two to one percent, easing conditions amid a stabilised housing market. This regulatory adjustment has fuelled interest in property shares, with notable gains reported for some companies in our peer group in response to market fluctuations. Despite these developments, uncertainties related to geopolitical tensions and economic weaknesses persist which could affect loan default rates.
Stock price data per company within the respective peer group is collected using the S&P Capital IQ Data Idem „IQ_ClosePrice_Adj“. Capital IQ defines the Close Price as: The closing price of the day, calculated once per day after the market close. Close prices are adjusted for stock splits, cash dividends, rights offerings, and spin-offs. The underlying peer groups are revised and adjusted once per year on 31 December. New players on the German real estate market are thus identified and included, while delisted companies are excluded.
“Reliable benchmarks are key for every investor in order to balance the information asymmetry in a real estate investment process.”
The Index shows the development of respective peer group (residential and commercial) companies’ stock prices on a monthly basis. Stock price data per company within the respective peer group is collected from S&P Capital IQ and reflects the closing price of the day after adjustment for stock splits.
In order to gain insight into the changes in value of 19 major players in the German real estate market, we have analysed the sector-specific Real Estate KPIs FFO 1 and EPRA NTA from the financial periods FY2023, FY2024 and TFQ2025 (TFQ: Trailing Four Quarters). We have put the share prices as of the balance sheet dates 31 Dec 2023, 31 Dec 2024 and 30 Apr 2025 in relation to the above-mentioned key figures from the corresponding financial periods. The resulting average ratios by segment are shown in the figures below.
The table below shows the individual FFO 1 multiples and Price/EPRA NTA ratios of our peer group by segment. The key figures relate to the financial periods FY2023, FY2024 and TFQ2025 and the share prices as of 31 Dec 2023, 31 Dec 2024 and 30 Apr 2025.
Reading example: TAG Immobilien AG was valued by the market at 14.4x of its FFO 1 as of 31 Dec 2024, whereas on 30 Apr 2025, it was valued at 14.3x of its FFO 1.
Compared to the end of FY2024, Commercial's current valuation level (as of 30 Apr 2025) has decreased by +4.5% (FFO 1 multiple) and +6.5% (Price/EPRA NTA ratio). On the other hand, the current valuation level of Residential has increased by -4.0% (FFO 1 multiple) and -3.3% (Price/EPRA NTA ratio).
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Residential sector reassessment: Facing an 11.2% downturn in March
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PwC Real Estate Index for Residential (171) - Lack of stimulus for a continuation of the recovery, uncertainties weigh on valuations
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German WACC (5.6%) – Capital costs rise to a 12-month high and the spread to Global WACC falls to the lowest level in 2 years.
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PwC Real Estate Index (-2.5%) - Residential takes a break in December after strong upswing in recent months
Disclaimer (important notice): This publication includes information obtained or derived from a variety of publicly available sources. PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft does not give any representation or warranty of any kind (whether expressed or implied) as to the accuracy or completeness of this publication. This publication has been prepared solely for general informational. Nothing in this publication should be construed as individual advice. Before making any decision or taking any action, you should consult the sources or contacts listed here. The graphics may contain rounding differences.
