Private Real Estate: Securing and Growing Wealth

Residential real estate is a diverse asset class that encompasses different types of housing, including single-family homes, apartments, multi-family buildings, and alternative solutions such as tiny houses and intergenerational housing.

Growing urbanisation and the rise in single-person households are having a significant impact on supply and demand. In Germany, for example, the majority of people live in multi-family buildings, with a high proportion of tenants (over 50% in 2021). At the same time, the shortage of affordable housing is intensifying, particularly in large urban areas.

Until 2022, the property market experienced a continuous rise in prices and rents, particularly in urban centres. However, since then, several factors have changed the dynamics of the sector:

• Slowdown in new construction: New housing production has fallen, with only 210,000 units expected in 2024 and 175,000 in 2025.
• Rising interest rates: Mortgage rates have risen from around 1% to over 4%, making home ownership more difficult.
• Rising rents: Rental demand remains strong, putting further pressure on the rental market.
• Green transition and regulations: Energy efficiency is becoming a key factor in property valuation.

The involvement of private investors is crucial to the dynamism of the real estate market. Since the 1990s, privatisation of the sector has given rise to profitable real estate groups and attracted significant international capital. However, in 2023, transaction volumes declined, impacted by higher financing costs and increased economic uncertainty.

Private real estate faces several major challenges:

• High construction costs: Expensive materials, labour shortages and regulatory constraints complicate the development of new projects.
• Transition to sustainable housing: Energy renovation of existing buildings remains insufficient, with only 1% of housing being refurbished each year.
• Digitalisation and home automation: The integration of smart technologies is becoming a key factor in optimising property management.

To address these challenges, private investors have several options available to them:

• Invest in high-demand areas: Identify attractive cities and neighbourhoods to ensure optimal profitability.
• Focus on energy-efficient properties: Reduce operating costs and anticipate future environmental regulations.
• Optimise rental management: Maximise income by adapting your rental strategy to market demand.
• Diversify your assets: Invest in different types of properties to reduce risk.

While private real estate remains an attractive long-term investment, owners must nevertheless be informed, advised and supported throughout the ownership period. Our experts are available to develop together with you the project that best suits your needs.

Our team of private real estate experts offers tailored support to maximise the value of your assets. We focus on several strategic areas:

• Operational advice: we take care of all your reporting obligations relating to your real estate assets and monitor the overall cost to alert you to any anomalies.
• Wealth engineering advice: we advise you on the constitution and organisation of your real estate assets in line with your objectives and constraints.
• Transfer advice: we support you regarding the transfer of your real estate assets, whether you wish to sell them, donate them or plan your estate.
• Liquidation and distribution advice: we manage joint ownership, help you terminate it and organise liquidations or distributions.
• Focus on France-Germany, France-Austria, France-Belgium and France-Switzerland: we have extensive experience in real estate structuring involving foreign entities for the ownership or financing of real estate assets in France and vice versa.