Key facts
- The BF.direkt barometer for commercial property financing sentiment in Germany fell to -25.97 in Q2 2026.
- This represents a significant drop from -9.74 in the first quarter, indicating very limited readiness to finance.
- Over 46% of surveyed financiers reported that financing conditions had worsened.
- The war in Iran and its consequences, including energy price shocks driving inflation and fears of rising interest rates, are cited as key reasons.
- This situation impacts an industry already fragile since the 2022 interest rate hikes.
- Commerzbank research suggests the German commercial real estate market has bottomed out and expects moderate price increases.
Sentiment among those financing commercial real estate in Germany significantly worsened in the second quarter, according to a survey by BF.direkt. The barometer score dropped to -25.97 from -9.74 in the first quarter, indicating a very limited willingness to provide financing. This decline is primarily attributed to the war in Iran and its consequences, including an energy price shock that has driven up inflation and fueled fears of rising interest rates.
More than 46% of surveyed financiers reported that financing conditions had deteriorated. This situation is particularly challenging for an industry already in a fragile state following the substantial interest rate hikes in 2022. Commercial real estate prices, which had fallen in the wake of the Ukraine war in 2022, have since begun a slow recovery.
However, Commerzbank research suggests that the German commercial real estate market has bottomed out. Factors such as expected ECB interest rate cuts between mid-2024 and mid-2025 are anticipated to improve financing conditions. Additionally, tight supply due to low construction activity is expected to support rising rents and investment returns. While investor sentiment remains cautious, it has brightened since early 2024, with other areas of commercial real estate regaining appeal.