Permission to enter

No foreign ownership restrictions on commercial real estate. Grundbuch title system, internationally recognised, legally unambiguous. Acquisition cost stack known before you open the model. Grunderwerbsteuer 5.5% in most states. Notary and land registry approximately 2%. Total 7 to 9%. No structural ambiguity. No hidden exposure at the jurisdiction level.

Permission to operate

Full EUR convertibility. No capital controls. No repatriation friction. BaFin-regulated credit environment, transparent, rule-based, predictable. Commercial leases index to CPI. German inflation at 2.7% in March is not a risk to model around. It is income support.

Permission to exit

Deepest exit market in continental Europe. Institutional liquidity. Rule of law with full enforceability. No currency trap. No approval process standing between your capital and the door.

The Monetary Cycle

ECB main refinancing rate (March 2026) 2.15% — held
ECB 2026 inflation forecast 2.6% — raised on energy prices
Deutsche Bank base case Rates on hold through 2026, first hike mid-2027
10-year Bund 3.11% — highest since May 2011, up nearly 50bp in March
Bond market signal Not waiting for the ECB — entry conditions today better than 12–18 months hence

The Credit Cycle

BaFin systemic risk buffer (effective May 2025) Lowered 2% to 1% — reduced systemic stress
CRE loans facing refinancing 2025–2026 EUR 100 billion
BaFin CRE assessment Fragile broadly — rising NPLs, refinancing pressure on legacy stock
Distress concentration Secondary office, legacy retail, non-compliant stock
Prime logistics, grade A, ESG-compliant Distress absent — institutional demand present

The Fiscal Foundation

Fiscal stimulus EUR 57 billion
Real wage growth 2025 1.9%
Minimum wage increase 2026 8.5%
Unemployment (ILO) 3.7% — below OECD average
German CRE vs 2022 peak approx. 8% below — correction was rate-driven, not fundamental

The jurisdiction gives you permission. The cycle gives you timing. The asset selection is what determines whether you deserve both.

Advisory

If you are allocating to European commercial real estate, a 30-minute scoping call is the starting point.

Book a scoping call →