Expo Real 2023, recently held in Munich, once again demonstrated its importance as one of the largest real estate exhibitions in Europe by presenting a wealth of topics and challenges currently affecting the real estate industry.
Hotel properties at Expo Real 2023
In the hotel real estate sector, Expo Real 2023 served as a forum for dialogue between professionals from the hotel and real estate industry. Current market trends caused by the crisis were discussed here. Financial experts made predictions that included market dividends, an increase in bankruptcies and significant write-downs at the end of the year, according to the fair’s website. In addition, topics included increased demand in the summer, increased prices and sustainability efforts in the industry, as well as the financial challenges caused by the pandemic and its impact on hotel real estate transactions.
At the same time, increasing market activity in the hotel property sector was recorded in the summer of 2023, as an article on the Expo Real website explains. The industry is experiencing higher demand compared to last year and has significantly increased prices, reflecting an ongoing desire to travel. In Germany, for example, holidaymakers pay an average of 12 percent more, while prices in leading hotels in mountain or coastal regions have risen by 20 to 30 percent, with willingness to spend appearing particularly high in the luxury segment, it goes on to say.
Furthermore, the city’s hotel industry has recovered after initial difficulties. Budget lifestyle hotels in particular are benefiting from the revival in demand in the tourism sector, as the article makes clear. In addition, business trips, seminars and smaller meetings are experiencing increasing demand that exceeds expectations.
Office properties
In the office property segment, however, a large number of current trends and challenges that are shaping the market were also discussed at Expo Real 2023. Here the participants were also able to find out about the latest developments and exchange ideas with other experts
The economic conditions, in particular the persistently high demand for living space and the increasing tendency to work from home, also influence investment decisions in the office real estate sector, as Engage reports in an online article. It has also been observed that traditional office investors are now also becoming active in the residential real estate segment.
The development towards home offices is leading to an increased need for living space and therefore also to a greater need for private square meters per person, Engage continues. Despite the challenges associated with high levels of regulation, particularly when it comes to renovations and ESG (Environmental, Social, Governance) requirements, residential property in Germany continues to be perceived as a stable and safe investment.
According to the company, it also became clear during Expo Real 2023 that the weak economy had not led to increased cost sensitivity among office tenants. Companies are more likely to suffer from recruiting problems and the lack of high-quality offices available at short notice in attractive locations. Companies that want to move are therefore not necessarily looking for larger areas, but rather for higher quality areas, as it goes on to say. Flexible working time models and remote work have also opened up new possibilities that do not allow the overall location costs to rise too much or even allow a change to a significantly better property to be cost-neutral overall, Expo Real concluded.
Digitalization and ESG
The topic of digitalization and innovation received particular attention during Expo Real 2023 as it represents crucial aspects of current and future developments in the real estate industry. In particular, the opportunities and challenges of digital transformation in the real estate industry were discussed, as can be seen from the trade fair website. The fair served as a platform to discuss digital solutions related to planning, operations, valuation and investment in real estate.
Through digitalization, it was argued, the real estate industry could be made more efficient and sustainable, which seems almost unavoidable these days given the shortage of skilled workers and the requirements of the ESG taxonomy. Digitalization helps to automate processes and could therefore offer a solution to the shortage of qualified workers, at least in certain areas.
In addition, the ESG topics of environmental, social and governance were discussed intensively at Expo Real 2023. ESG issues are of great importance in the real estate industry because they promote sustainable and socially responsible business management, as the German bauzeitung reports in an online article. As part of Expo Real, a wide range of offers relating to ESG were presented, including the building resource pass and the BEG funding with the associated QNG seal.
The German Society for Sustainable Building (DGNB) played a central role and provided information about the importance of sustainable and climate-friendly construction. It was emphasized that the topics of sustainability and climate protection have become increasingly important in the real estate industry and that more and more investors, builders, project developers and property owners are actively addressing the opportunities and requirements in the ESG context.
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