Real estate market report 2025

The submarkets

Office properties: market recovery - focus on quality and location

Following the slump in 2023, the office market in Hannover recovered significantly in 2024 (139,000 sqm take-up). Companies are demanding less, but higher-quality space in good locations. Existing properties of an older standard are therefore coming under pressure. Demand on the investment market is slowly picking up again, but remains subdued. In the medium term, ESG criteria, quality and flexible usage concepts will determine the development of the office market.

• 63,000 sqm take-up in the 1st half of 2025 (previous year: 50,000 sqm)
• Expected annual take-up: >120,000 sqm
• Prime rent increases to 24.50 euros/sqm (2024: 21.50 euros/sqm)
• Vacancy rate: 5.8 percent

Residential real estate: high demand, little new construction - market situation remains tense

Demand for residential space remains high, while completions and approvals are falling significantly. Only 2,600 new apartments were completed in 2024 (down 55% on the previous year), while approvals also fell by 26%. Financing conditions remain challenging: High equity requirements and difficult calculations are slowing down new construction and acquisitions. In the short term, the market remains tense - in the medium term, stable interest rates and political measures could bring more movement again.

• 600 residential units completed in 2024 (- 55 %)
• Building permits also declining (- 26 %)
• Prime rent for new builds: 18.20 euros/sqm, prime property: 6,550 euros/sqm

Logistics properties: short-term restraint - long-term high demand pressure

After weak years with only 130,000 sqm of take-up in 2024 and 85,000 sqm in the first half of 2025, the market is showing the first signs of stabilization. The average rent is rising to EUR 5.10/sqm. Logistics is the strongest asset class on the investment market with a share of almost 50% (approx. €200 million take-up in 2024). However, the weak economy is slowing things down in the short term. Hannover remains a robust and sustainable logistics location.

Hotel properties: Stable recovery - positive prospects despite uncertainties

The hotel market in Hannover continued to recover in 2024: Over 4 million overnight stays were recorded, with a new high of 2.38 million in the city of Hannover. Revenue per available room rose to 66 euros, with occupancy at 62.5 percent. The supply of beds is also growing again and is now above the pre-crisis level. The investment market has seen new momentum since mid-2024: Several transactions, mainly by international hotel chains, underline Hannover's attractiveness. Major events, leading trade fairs and new hotel projects are strengthening the location, while international brands are bringing capital and reach.

• 4.03 million overnight stays in the city and region (2024)
• 2.38 million in Hannover alone - new record figure
• 114 hotels with 16,350 beds
• Since 2020: 10 new hotels with 1,600 rooms

Retail: new concepts in demand for city center and retail

The city center is on the verge of profound change: in addition to retail, living, gastronomy, culture and quality of stay are gaining in importance. Numerous renovation projects as well as the establishment of international labels and new gastronomy formats show that attractive concepts are making the location fit for the future. Retail sales in the Hannover Region are expected to rise to 8.73 billion euros in 2025.