Hanover real estate market: between light and shadow

Olaf Mahlstedt (Sculpture: H.-J. Maibach)

Office, logistics and industry, retail, hotel and residential - Hannover's real estate sector was confident and successful in all submarkets before coronavirus shook up the market to varying degrees from March 2020. Eighteen turbulent months have followed so far, which have shaped the real estate market in different ways.

With a view to the current situation and regional trends, the Hannover Region and the state capital of Hannover today jointly presented the 2021 Real Estate Market Report. For the first time, in addition to the printed edition, there is also a comprehensive online presentation with maps and information on the most important projects at www.immobilienmarktbericht-hannover.de.

The study was conducted in collaboration with bulwiengesa AG and 22 market-shaping companies.

The common conclusion: all in all, the regional real estate market has come through the crisis relatively unscathed. However, the review and outlook for the individual submarkets is very different. Residential and logistics properties as well as local supply-oriented retail properties have emerged stronger from the last year and a half.

In the retail, restaurant and hotel submarkets, on the other hand, the already foreseeable structural change accelerated by coronavirus has had a major impact. City centers have been weakened by long lockdown phases and the boom in online retail. Urban hotels will recover more slowly than expected over the next two to three years.

The order books for office properties are full and demand for office space is currently comparatively unbroken. However, it remains to be seen how working from home, accelerated digitalization and restructuring processes in economically weakened companies, for example, will affect regional demand in the long term.

Hannover has been perceived as a strong economic region in Germany for years.

"Despite all the difficulties of the past year and a half, the Hannover Region remains a sought-after location for development and investment. To keep it that way, we need to work together to set new and exciting trends in areas such as technology, tourism and retail," saysUlf-Birger Franz, Head of Economic Affairs for the Hannover Region."This will also benefit the real estate industry in the medium and long term."

There are bright spots in all submarkets.

Dozens of cranes are turning in the large residential areas of Kronsrode and Wasserstadt Limmer. Several hotels opened during the crisis or are currently being completed, for example the me and all Hotel on Aegidientorplatz or Motel One opposite the opera house.

At the end of Podbi, H3ö is planned, an office quarter in which one of the buildings will be made entirely of wood.

Large combined logistics and industrial space projects such as the VGP Park in Laatzen show once again that the logistics industry makes a decisive contribution to creating and securing jobs. And retail formats such as VAUND in Georgstrasse point the way to the future of innovative retail in the city center.

A large number of other projects prove that Hannover continues to be the focus of project developers and investors who successfully place their ideas on the market.

"The often-invoked resilience of the location has become clearly visible in recent months: Hannover as a real estate location has the potential in all submarkets to overcome the crisis in the long term," says Kay de Cassan, Head of the Department of Economics of the City of Hannover.

Andreas Schulten, Chief Representative of bulwiengesa, an analysis agency specializing in real estate, is also optimistic. He is confident in the comparison of German locations:

"At the end of the corona tunnel, we will see more light than shadow at the Hannover location. All relevant market players will continue to find a strong economic area in the Hannover Region."

Hannover Region and Olaf Mahlstedt (sculpture: H.-J. Maibach)

The real estate market report was compiled by the Hannover Region together with the state capital and 22 other partners from the regional real estate industry. The project group has been supported by bulwiengesa AG since 2004.

The market data that is usually used to assess the regional real estate market is currently only of limited value due to the global impact of the pandemic. It is therefore particularly important to be able to assess and classify current developments on the Hanover real estate market on the basis of reliable data and opinions from regional players.

The figures and trends are updated every six months and will also be expanded online from October 2021. The study will also be presented to an international trade audience together with partners at the EXPO REAL real estate trade fair in Munich from October 11 to 13.