Germany is seeing a significant increase in new-build residential properties, as investors look to enhance their ESG credentials and fight off the threat of inflation to portfolios.

Development projects accounted for 39 percent of the €4.4 billion of residential real estate traded in the first quarter of 2022, according to Savills. The five-year average for development projects stands at 23 percent of overall volume. In the single-property sale segment, development projects accounted for almost 76 percent of the transaction volume in the first three months of 2022.

Matti Schenk, an associate in Savills Germany’s research team, says that the focus on new build can be explained by the increased emphasis on ESG among many investors and the need to combat inflation. “As it stands, ESG criteria can be fulfilled and adhered to more easily with new build properties,” he says. “The fact that indexed leases are agreed on many development projects also favours new buil