Market Trends of Germany Commercial Construction Industry
Increasing Investments in Green buildings is Driving the Market Growth
The investment volume in certified green buildings will remain very high in Germany in 2022 at around €11.2 billion. Although the volume, like the investment market as a whole, fell slightly in absolute terms compared to the previous year, the relative share of certified assets in the investment market rose to an absolute record level of 30.6%.
DGNB (1,670) remains the market leader in the area of green building certificates, followed by BREEAM (660) and LEED (490). BREEAM further set itself apart from LEED through the existing certification.
In 2022, around 80% of the investment volume for certified Green Buildings was accounted for by A locations. In the three largest investment locations, Berlin, Frankfurt, and Munich, the share of sustainable buildings in commercial transactions totaled over 40%.
Although certificates such as BREEAM, DGNB, or LEED are not congruent with the ESG criteria of the taxonomy, they are understood as an essential indication that ESG criteria are considered, which will drive the market in the coming years. As in previous years, there was a significant increase in the number of certifications in Germany in 2022. Over 2,800 buildings in Germany have now been certified. The analysis of the certifications according to asset classes impressively shows that the relative share of retail in the nationwide certified buildings has declined for several years, while logistics has recently made relative gains.
In 2022, most of the investments in green buildings in Germany were for office space. Logistics was the end use with the second biggest share of green building investments. There were almost 1.5 billion euros of green building investments for logistics and roughly 150 million euros for hotels. In 2022, the investment in green buildings in Germany made a significant share of the overall investment.
Increasing Infrastructure Construction Activity Rising the Demand for the Market
The increased value of new orders received for civil engineering works will support the infrastructure construction sector's growth over the forecast period.
In Germany, the turnover of building construction was higher than that of any civil engineering or special construction segments as of 2022. Within the civil engineering activities, road and railway construction turnover was the largest at over 21 billion euros, followed by utility project construction at 12 billion euros.
Most significant construction project initiated in Germany in Q2 2022 is Leipzig Witznitz Energy Solar PV Park 650MW; the project involves the construction of the Witznitz Energy Solar PV Park on a 650ha land with a generating capacity of 650MW on Lake Hainer in Leipzig, Saxony, construction work started in Q2 2022 and is expected to be completed in December 2023, The project aims to meet the energy consumption of around 200,000 four-person households. It will save more than 250,000 tons of CO2 annually based on the German energy mix in 2020.
Another construction Project is the Hochmuttinger Strabe Residential Quarter. The project includes the construction of the Hochmuttinger Strasse residential quarter on an 8.4ha area in Munich-Feldmoching, Bavaria. Construction work commenced in Q2 2022 and is expected to finish in Q4 2025. The project aims to build an affordable, ecological housing quarter. The project will be built according to the Efficiency House 55 standard.
Frechen NEOBEL Mixed-Use Development: The project involves the construction of the NEOBEL Mixed-Use quarter with residential facilities on a 25,000m2 area and office and commercial facilities on a 16,400m2 area in Frechen, North Rhine-Westphalia. Construction work commenced in Q2 2022 and is expected to be completed in Q4 2025. The project aims to build a mix of business, living, and commercial facilities and line up between the commercial facilities and downtown Frechen.
Goldammerweg Distribution Center Expansion: The project involves the construction of a distribution center for the food delivery service in Oberhausen, North Rhine-Westphalia. Construction work started in Q2 2022 and is expected to be completed in Q4 2024; the project aims to build the most modern e-food warehouse in the world with the highest degree of automation, enable fast and reliable distribution, packaging, and delivery facilities with the help of 1,500 robots and 21km of conveyor belts, and provide delivery services to more than 200,000 customers. This project will drive the growth of the German commercial construction market in the coming years.
