LEG Immobilien acquires majority stake in BCP, adding 9,100 apartments

LEG Immobilien SE has successfully acquired a majority stake in Brack Capital Properties N.V. (BCP), increasing its ownership from 35.52% to 88.20% as part of a deal with Adler Group concluded in November 2024. This acquisition brings an additional 9,100 residential units under LEG’s management, with a significant regional focus on North Rhine-Westphalia, Lower Saxony, Bremen, and Leipzig. The transaction, valued at €219 million, aligns with LEG’s commitment to providing affordable housing in Germany.

Over 90% of the acquired BCP portfolio is located in LEG’s core regions, with North Rhine-Westphalia accounting for nearly half of the units. The acquisition also marks LEG’s entry into Leipzig, an emerging growth market, and expands its presence into eastern Germany with units in Leipzig and Magdeburg. This strategic move underscores LEG’s goal to reinforce its footprint in key locations while upholding its mission of delivering affordable housing solutions.

BCP’s portfolio aligns with LEG’s focus on affordable housing, offering an average rent of €7.29 per square meter. While slightly above LEG’s current portfolio average rent of €6.78 per square meter, the pricing reflects the concentration of BCP’s properties in growth markets. The portfolio boasts a high occupancy rate of 96.4%, further enhancing its value proposition.

LEG has assured tenants that their lease agreements will remain unchanged, in compliance with legal requirements. Starting in mid-January, tenants will receive welcome letters detailing new points of contact, services, and procedures. LEG will assume full management responsibilities for the properties in February 2025 at the earliest. Local on-site management teams and regional offices will continue to provide operational support and maintain direct communication with tenants and stakeholders.

The acquisition represents LEG’s cautious transition from portfolio optimization to expansion, following a period of internal adjustments. The move builds on LEG’s initial purchase of Adler’s portfolio and a 36% stake in BCP in 2021, positioning the company for sustainable growth at a fair purchase price.

“With this transaction, we are continuing the strategic expansion we initiated in 2021 with the Adler portfolio and our initial stake in BCP,” said Lars von Lackum, CEO of LEG Immobilien SE. “We are excited to welcome new customers and expand into additional locations in Germany. While continuing to execute our sales program, we remain vigilant for attractive opportunities that align with our mission of offering high-quality, affordable housing.”

LEG remains committed to fostering strong relationships with local authorities and stakeholders in its newly acquired regions. The company will implement localized points of contact to support tenants and communities, ensuring a seamless integration of the new properties into its operations.

The acquisition includes:
• 9,100 residential units and additional commercial spaces in BCP’s portfolio.
• Focused regions: North Rhine-Westphalia, Lower Saxony, Bremen, Leipzig, and Magdeburg.
• Continued emphasis on sustainable and affordable housing.

Source: LEG Immobilien
Photo: Lars von Lackum, CEO of LEG Immobilien SE

German residential property market sees year-end rally: rising prices and signs of reversal

The German residential property market concluded 2024 with a significant upswing, recording a transaction volume of €4.0 billion in the fourth quarter, marking the strongest quarter since the onset of interest rate hikes. The latest analysis by Lübke Kelber, a leading independent real estate consultancy, highlights a potential turning point for the market, with signs of yield compression in select locations and an increase in large-scale transactions driving activity.

Record-Breaking Q4 Performance

With a transaction volume of €4.0 billion, Q4 2024 exceeded the historical 10-year average of €3.5 billion for the first time since Q2 2022. This quarter alone accounted for a higher number of traded units—approximately 34,100 apartments—than the total for 2023. The year-end rally also brought the annual volume to €8.6 billion, substantially outpacing 2023 and signaling a potential market recovery.

Large-scale transactions dominated the quarter, with deals over €100 million contributing 70% of the total turnover. Key transactions included portfolios from Vonovia/Buwog/Quarterback, HIH Invest, and ZBI’s acquisitions of Net Zero Properties and the Adler portfolio by Orange Capital Partners, collectively adding €2.9 billion to the volume.

Yield Compression Signals Rebound

For the first time since 2022, initial yields for residential properties have shown signs of compression in select markets, indicating a stabilization in investment pricing. Gross initial yields for existing properties in prime (A) markets averaged 4.7% in medium locations and 4.3% in good locations. In secondary (B, C, and D) markets, yields were correspondingly higher. For new builds, yields ranged from 4.1% in premium locations to 4.3% in mid-tier A markets.

“Yield compression in selected markets suggests that the correction phase in the residential investment sector is nearing its end,” stated Mark Holz, Head of Research at Lübke Kelber. He attributed the trend to rising rents, falling interest rates, and renewed investor confidence. However, Holz cautioned that further devaluations in some portfolios remain possible, as valuations are yet to fully align with achievable market prices.

Drivers of the Market Upswing

1. Tight Rental Market

Vacancy rates remain critically low, standing at just 2.5% in 2022, with new residential completions consistently falling short of targets. In 2024, the goal of constructing 400,000 new units was missed, exacerbating supply constraints and pushing rents higher. Between 2020 and 2024, average rents in portfolios increased by 5.3% annually. By 2025, rents for existing properties are expected to surpass €10.00/m², while new-build rents could exceed €15.00/m² nationwide.

2. Declining Interest Rates

Interest rate reductions by the US Federal Reserve and the European Central Bank (ECB) have supported the property market. Recent ECB key rate cuts have stabilized construction financing rates between 3.0% and 3.5%, with further decreases anticipated in 2025. LBBW forecasts a deposit rate of 1.75% by year-end, reinforcing favorable conditions for investment.

3. Renewed Investor Demand

Institutional investors, real estate companies, and fund managers such as HIH and municipal housing entities (e.g., Gesobau, Hogowe, Degewo, Münchener Wohnen) have actively pursued acquisitions, particularly in new-build and development projects. This renewed demand underscores the sector’s recovery and growing confidence in Germany’s residential property market.

Outlook: Opportunities and Risks

While declining interest rates and strong rental fundamentals provide a supportive backdrop, potential risks include geopolitical tensions, Germany’s impending elections, and global economic uncertainties. Holz emphasized that while the market shows promising signs of recovery, the interplay between macroeconomic conditions and local factors will shape its trajectory.

“Germany’s residential property market is at a pivotal moment. Although challenges remain, the sector’s resilience and structural fundamentals offer significant growth potential,” Holz concluded.

Methodology

The analysis includes residential properties with at least 20 units, excluding mixed-use, M&A deals, and specialized housing (e.g., student or senior housing). Yield data reflect average-to-good properties without significant under-rent or capex requirements.

Source: Lübke Kelber,

Czech economy grew by 1.4% in Q3 as ČSÚ revises estimate upward

The Czech economy experienced a 1.4% year-on-year growth in the third quarter of 2024, marking the strongest quarterly improvement since Q3 2022, according to revised data released by the Czech Statistical Office (ČSÚ). On a quarter-on-quarter basis, gross domestic product (GDP) increased by 0.5%.

The ČSÚ adjusted its initial estimates upward by 0.1 percentage points for both metrics, reflecting a slightly better economic performance than originally anticipated. This revised growth underscores a period of modest recovery for the Czech economy, following subdued activity earlier in the year.

The upward revision highlights positive momentum, driven by key sectors and improved domestic demand, as the economy continues to navigate global and regional economic challenges.

Source: ČSÚ and CTK

Atal’s CEO: Housing prices in Poland likely to remain stable in 2025

Despite challenges such as high land prices in major cities, housing costs in Poland are expected to remain stable in 2025, according to Zbigniew Juroszek, CEO of Atal Group. Factors like steady construction costs and material prices, coupled with robust supply, suggest limited fluctuation in housing prices.

“In 2025, interest rates will play a pivotal role in shaping the housing market,” Juroszek said. “We anticipate rate cuts during the year, which would enhance buyers’ creditworthiness and positively influence real estate purchase decisions. However, this demand stimulus is unlikely to lead to significant price increases beyond inflation levels due to the ample supply of new housing. Prices remain stable, and there are no indications of drastic growth or decline. While construction and material costs are not undergoing major changes, high land prices in large cities continue to pose challenges. Balancing these factors suggests housing prices will stay relatively steady.”

Juroszek noted that the housing market’s trajectory could also depend on the government’s housing policies, which remain unclear.

“The current political and legislative environment introduces uncertainty,” he said. “Decisions around policies like loan subsidies have led to a temporary pause in buyer activity, demonstrating how government interventions can influence market dynamics.”

Atal, a leading developer specializing in residential complexes across Poland’s largest cities, has been a key player in the market. The company, listed on the Warsaw Stock Exchange since 2015, reported strong performance in 2024, selling 2,068 apartments and service premises.

As 2025 unfolds, Atal’s focus remains on meeting market demand while navigating potential policy shifts and maintaining stability in a competitive real estate landscape.

Source: Atal Group and ISBnews
Photo: Nowy Targowek VI, Warszawa

Housing prices in major Polish cities rise 5–12% YoY in 2024

The prices of new apartments in Poland’s largest cities remained stable month-over-month in December 2024, fluctuating within a 0–1% range, according to preliminary data from Big Data RynekPierwotny.pl. On a year-over-year basis, however, prices rose between 5% and 12%, with Wrocław experiencing the highest increase and Warsaw the lowest.

“In 2024, the average price per square meter for apartments offered by developers increased across all major cities. Notably, five of these cities saw single-digit growth, which hasn’t occurred in the past six years,” commented portal expert Marek Wielgo.

Regional Trends in Price Increases
• Wrocław topped the list with a 12% increase, bringing the average price per square meter to approximately PLN 14,700.
• Łódź saw a 10% increase, with prices nearing PLN 11,500 per square meter.
• Poznań came in third, recording an 8% rise to approximately PLN 13,300 per square meter.
• In Kraków, prices rose by 7%, reaching around PLN 16,500 per square meter.
• The Tri-City area experienced a 7% increase as well, while the Upper Silesian-Zagłębie Metropolis saw a 6% rise to PLN 11,200 per square meter.
• Warsaw, Poland’s most expensive city, had the lowest increase at 5%, with prices averaging PLN 17,700 per square meter.

Notable Market Dynamics

Wrocław stood out as the only city where apartment prices have consistently grown at a double-digit rate over the past six years. Kraków, which previously shared this trend, experienced a marked slowdown in 2024. Warsaw also recorded its smallest increase in six years, marking a shift toward more moderate growth.

Encouragingly, the second half of 2024 saw a deceleration in price increases. Preliminary December data from Big Data RynekPierwotny.pl indicated that average prices in all cities either stabilized or slightly decreased, with a 1% drop observed in the Tri-City.

Outlook for 2025

According to Wielgo, there is a possibility of price stabilization or even slight declines in 2025, contingent upon developers increasing the supply of more affordable housing. Evidence of this trend emerged late last year in cities like Warsaw, Kraków, Łódź, and Poznań.

However, there remains a risk of a less favorable scenario for buyers: an increase in supply focused primarily on high-end properties targeted at affluent clients. This could drive average prices upward again, as was the case in November 2024 in the Tri-City, where the entry of luxury apartments priced at PLN 21,200 per square meter pushed the average price up by 4% month-over-month.

Another potential factor influencing future prices is the acceleration of infrastructure projects under the National Recovery Plan. This could lead to increased costs for building materials and labor, further impacting housing prices, Wielgo concluded.

Source: RynekPierwotny.pl and ISBnews

GTC completes acquisition of German residential portfolio

Globe Trade Centre (GTC) has finalized the acquisition of a German residential portfolio from LFH Portfolio Acquico S.À R.L. and Peach Group companies, following the fulfillment of all suspensive conditions. The transaction terms align with those disclosed on November 16, 2024, the company announced.

As a result, GTC, through its subsidiary GTC Paula S.À R.L., acquired:
• 89.9% stakes in partnerships Kaiserslautern I GmbH & Co. KG and Kaiserslautern II GmbH & Co. KG from Peach Group companies.
• 79.8% stakes in several limited liability companies, including Portfolio Kaiserslautern III GmbH, Portfolio KL Betzenberg IV GmbH, and others, from LFH Portfolio Acquico S.À R.L. These acquisitions reflect an adjusted portfolio value of approximately €448 million for full ownership.
• Additionally, 51% of shares in GTC Peach Verwaltungs GmbH, the portfolio management company, were acquired indirectly from Peach Group.

The transaction follows agreements signed in November 2024 between GTC and Peach Property Group AG, along with LFH Portfolio Acquico S.À R.L. The portfolio, previously part of Peach Property Group, comprises 5,165 residential units, 47 commercial spaces, 71 additional units, and 2,108 parking spots, with a total leaseable area of 324,167 m².

Portfolio Highlights

The portfolio is concentrated in three key German cities: Kaiserslautern, Helmstedt, and Heidenheim. Residential properties make up nearly 100% of the portfolio, with an occupancy rate of approximately 87.4%. The assets primarily consist of properties built between 1950-1969 and newer buildings from 1970-1984.

To finance the acquisition, GTC secured a five-year loan of €190 million.

Source: GTC and ISBnews

Babiš: 2025 will be a turning point for the Czech Republic

The year 2025 will mark a critical juncture for the Czech Republic, with the upcoming parliamentary elections set to determine the country’s future direction, stated Andrej Babiš, former Prime Minister and Vice-Chairman of the opposition ANO movement, in his New Year’s address. Babiš pledged to work tirelessly to unseat Prime Minister Petr Fiala’s government, labeling it as “incompetent, antisocial, arrogant, and dishonest.”

“It’s enough to compare the costs of rent, food, medicine, transportation, and energy from 2021 to now. Due to the governing coalition’s complete ineptitude, everything has become about a third more expensive,” Babiš remarked, criticizing the government for the rise in living costs. He also claimed that Fiala’s administration has burdened the country with greater debt than the previous three and a half governments combined.

Criticism of Government Policies

Babiš accused Fiala’s cabinet of neglecting the needs of Czech citizens. “This government has increased taxes, raised the retirement age, and proposed higher TV and radio fees as well as salary hikes for top politicians—all while ignoring the struggles of ordinary citizens,” he said.

For the former prime minister, the current government’s actions have consistently failed to prioritize the well-being of Czechs. “We have the experience, the expertise, and a proven track record of managing the country responsibly. Unlike this government, we understand the real needs of our citizens,” Babiš asserted. He also dismissed Fiala’s recent claim that his government could bring Czech wages closer to German levels, stating, “We don’t make empty promises. We only promise what we can deliver.”

Babiš outlined ANO’s priorities: restarting the economy, curbing inflation, and improving the quality of life for citizens. The party aims to create a predictable business environment that encourages investment and innovation. “We will support traditional industries while fostering growth in new sectors like cryptocurrencies and start-ups,” Babiš noted. He emphasized that ANO is focused on winning the parliamentary elections to form the next government. “I believe 2025 will be a year of renewal, hope, and progress,” he concluded.

Pirate Party Leader’s Critique

Zdeněk Hřib, leader of the Pirates and former coalition partner turned opposition, also released a New Year’s message, stressing the elections’ significance. “We have a choice: continue stagnating and letting backroom deals dictate our economy and technological development, or enact real change,” Hřib stated.

Hřib highlighted key issues such as the lack of affordable housing, low wages, and a struggling education system. “We are the only party free of corruption. Our time in government taught us that we must be more assertive in fighting for the public’s interests,” he said.

The Pirates exited the five-party coalition last year following the dismissal of Deputy Prime Minister Ivan Bartoš. Prime Minister Fiala justified the move by citing inefficiencies in digitizing construction procedures. However, Hřib maintained that the Pirates’ focus remains on advocating for meaningful reform. “We must ensure that 2025 is the year when the Czech Republic steps forward rather than treading water,” Hřib added.

A Year of High Stakes

As the Czech Republic gears up for a pivotal election year, the political landscape is increasingly polarized. Babiš’s ANO is campaigning for a return to its governance model, emphasizing stability and economic growth, while Hřib’s Pirates are rallying for systemic reforms to address stagnation and inequality. Both leaders agree on one thing: 2025 will be a turning point for the country’s future.

Source: CTK
Photo: Andrej Babiš

President Pavel Highlights Elections and Economic Challenges in New Year Speech

In his second New Year’s address as President, Petr Pavel emphasized the significance of the upcoming parliamentary elections, the state of the Czech economy, and the potential benefits of adopting the euro. Coalition politicians welcomed the speech’s optimistic tone, while opposition figures criticized its lack of government critique and focus on European integration.

Call for a Visionary Government

President Pavel underscored the importance of electing a government committed to ensuring the Czech Republic remains a safe and free nation, with robust laws and a fair environment for both citizens and businesses. He lamented the growing reliance on political marketing, stating that even fundamental terms like “peace” are now manipulated for rhetorical gain. Despite acknowledging some economic challenges, Pavel maintained that the country’s overall condition is not as dire as portrayed by negative narratives.

He also reiterated his support for adopting the euro, though indirectly, by suggesting that aligning with the European currency would bolster the nation’s long-term prosperity.

Coalition Politicians Praise the Speech

Prime Minister Petr Fiala described the speech as dignified, statesmanlike, and unifying, commending the alignment between his government and the president’s positive vision for the future. Markéta Pekarová Adamová, Chair of TOP 09 and the Chamber of Deputies, praised the address’s constructive tone, a sentiment echoed by People’s Party Chairman Marek Výborný and STAN leader Vít Rakušan, who appreciated Pavel’s call to reduce regional disparities.

Opposition Voices Criticism

The opposition was less enthusiastic. Karel Havlíček, ANO’s first vice-chairman, agreed with Pavel’s call to combat misinformation but suggested the speech lacked substantive critique of the government. SPD leader Tomio Okamura dismissed the address as out of touch with reality, while Senator Róbert Šlachta of the Oath movement criticized Pavel for promoting euro adoption in the New Year’s speech.

Other opposition leaders, including Zdeněk Hřib of the Pirates and Kateřina Konečná of KSČM, challenged Pavel’s assertion that the economic situation is stable, pointing to slow wage growth and other persistent issues. Political scientists, meanwhile, characterized the speech as unsurprising, noting its emphasis on positivity but highlighting a perceived lack of concrete solutions after nearly two years in office.

Political Leaders React on Social Media

The New Year also saw responses from key political figures on social media. Prime Minister Fiala framed 2025 as a decisive year, urging voters to choose a path aligned with democratic Western values rather than a return to “chaos” and alignment with the East.

Former Prime Minister Andrej Babiš, leader of ANO, labeled 2025 a turning point and vowed to end what he described as the “incompetent and antisocial” government of Petr Fiala. Pirate Party leader Zdeněk Hřib emphasized the need to address critical issues like affordable housing, low wages, and educational reforms.

Looking Ahead to 2025

As the Czech Republic enters an election year, Pavel’s speech set the tone for a debate on the country’s future direction. While coalition leaders embraced his vision of optimism and progress, opposition figures underscored unresolved challenges, making it clear that the road to the autumn elections will be marked by significant political discourse.

Source: CTK

Czechia: Amendment on heritage care digitization tightens archaeological supervision

An amendment to the Act on the Digitization of Heritage Care, enacted by the Ministry of Culture and signed by President Petr Pavel in June 2024, comes into effect yesterday. The legislation introduces enhanced oversight of archaeological excavations and facilitates the digital integration of heritage protection data into the land registry. Jana Zechmeisterová from the Ministry of Culture’s press department shared details of the changes.

The amendment empowers regional authorities with improved supervision of archaeological findings, particularly for large-scale rescue excavations. Regions can now set explicit conditions for how artifacts are documented and processed before being handed over.

Additionally, the Ministry of Culture’s powers over archaeological organizations and private companies have been expanded. The ministry can now revoke excavation authorizations not only for a loss of professional qualifications but also for repeated or severe breaches of the law. “If an authorized organization has either repeatedly violated obligations over the last two years or committed a serious offense, the ministry can withdraw its authorization,” Zechmeisterová explained. However, the ministry’s existing control mechanisms will remain unchanged.

The law also facilitates the digitization of heritage protection by introducing machine-based data transfer on conservation zones to the land registry. Starting from January 1, 2025, the system’s implementation will be gradually rolled out, with its launch officially announced in the Collection of Laws and International Treaties.

This development means that the land registry will now include data on protected areas and buildings, providing a comprehensive view of monument protection. “The inclusion of protected areas in the basic register will allow for seamless sharing across public administration, ensure modern updates, and guarantee data accuracy,” stated Culture Minister Martin Baxa.

The Ministry of Culture anticipates minimal financial impact from the amendment, estimating costs at approximately CZK 3 million. The expenses will primarily cover updates to the Integrated Information System of Monument Protection to accommodate the new requirements.

By digitizing records and streamlining archaeological supervision, the amendment aims to modernize and enhance heritage care, ensuring the responsible management and preservation of cultural artifacts while promoting efficiency in public administration.

Source: CTK

Atradius survey: German companies face record pessimism heading into 2025

A wave of pessimism has swept over German businesses as only 14% of companies express optimism about economic improvement in 2025, according to a survey conducted by Atradius. With 32% anticipating a worsening economic climate and 54% expecting no change, the outlook suggests turbulent times ahead for Germany’s economy. Atradius Germany’s CEO, Frank Liebold, forecasts a challenging year: “We expect around 25% more insolvencies in 2025.”

Rising Insolvency Risk

Nearly 30% of surveyed businesses report high insolvency risks in their industries, with only 17% considering their sectors low-risk. The construction, automotive, and energy-intensive industries, including steel, paper, and chemicals, are particularly vulnerable. “Zombie companies that survived on pandemic-era loans are now beginning to fail,” Liebold stated. In 2024, corporate bankruptcies rose to 22,400 cases, up from 18,020 in 2023, and this trend is expected to worsen.

Liebold also warns of the potential for deindustrialization, noting that declines in German production could have a domino effect across other industries. “Well-paid jobs in sectors like automotive are at risk, which would reduce consumer spending and weaken the broader economy,” he added.

Cautious Optimism on Employment

Despite the grim economic forecasts, only 6.7% of companies plan to reduce their workforce in 2025, while 32.1% expect to hire new staff. Nearly 75% of businesses surveyed plan to maintain current employment levels. This cautious optimism reflects a focus on workforce stability, even amid economic uncertainty.

Business Demands for Political Action

The Atradius survey reveals mounting frustration among German businesses, with 82% calling for reduced bureaucracy, 73% advocating for lower energy costs, and 61% demanding tax breaks. Political stability remains a priority for 54% of respondents. Businesses argue that Germany’s regulatory framework, including measures like the Supply Chain Act and Packaging Directive, burdens their ability to focus on core operations.

“Sustainability and climate protection are essential, but they should be pursued from a position of economic strength,” Liebold emphasized. Companies also urge the government to tackle the skills shortage, reduce social security contributions, and foster innovation through investment incentives.

Economic Drivers and European Momentum

While German companies see limited internal drivers for economic growth in 2025, they are more optimistic about European markets. Forty-one percent of respondents believe most economic momentum will come from Europe, with Asia, particularly China, accounting for 26% and 14%, respectively. Only 17% expect North America to drive economic recovery.

Setting the Right Course

Germany has a track record of resilience in the face of crises, but businesses now look to policymakers for decisive action. “We have the ability to move forward again,” Liebold concluded, “but we need the right course to be set to unlock our potential.”

Survey Details: The Atradius survey was conducted in late November 2024, sampling over 470 businesses across industries such as automotive, construction, chemicals, IT, consumer goods, and more. Respondents represented companies ranging from under €5 million to over €1 billion in annual revenue and employed between fewer than 100 to more than 1,500 staff.

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