Chart of the Month June: Every Fourth Project Development Postponed
Project developments in the A-cities have not only declined rapidly. Many projects are also postponed.
Many have already felt it, and now we have the confirmation in figures: the evaluation of projects in the Development Monitor shows that a good 23% of all space will be completed later than the originally planned date at the end of 2022. The Development Monitor 2023 evaluates 4,641 projects in the seven A-cities Berlin, Hamburg, Munich, Frankfurt, Stuttgart, Cologne and Düsseldorf with 43.5 million sqm of project space. We presented the results at a press conference in May (report here in the magazine). The analysis is a continuation of the 17-year time series that bulwiengesa began with the Project Development Study and which has now been further developed into the Development Monitor. For the current analysis, completed projects as well as projects under construction and in planning between 2020 and 2027 were evaluated.
For us, "late completion" in this evaluation means that completion is at least two quarters later than the originally planned date at the end of 2022.
We see the most delays in office projects, the fewest in logistics projects. For logistics properties, developers assume that demand will remain high in the future - only 12% of the planned square metres will be completed later - but this is apparently not the case for offices. Here it is 34% because the exit is very difficult for developers to calculate and the economic viability of a project is often unclear.
An analysis looking at business models is also interesting: in Berlin, for example, only 16% of investor development projects (project developments for the developer's own portfolio) are delayed, compared to 28% of trading developments ("classic" project developments for sale). The classic project developers are more dependent on market developments and bear a higher risk.
In addition, 12% of the space under construction was postponed. The pipeline is filled with projects with a realisation period of 2026/2027.
Contact person: Felix Embacher, Head of Research & Data Science, embacher@bulwiengesa.de, and Max Witte, Consultant, witte@bulwiengesa.de
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