Sentiment in the property sector remains subdued, yet the market is beginning to pick up again. Rising transaction volumes in the residential and logistics sectors, the growing importance of data centres, and new areas of investment in infrastructure indicate that the sector is re-organising itself. At the same time, high construction costs, limited availability of capital and protracted planning and approval procedures remain key constraints. The EXPO REAL 2026 Trend Index thus paints a picture of a market caught between caution and a tentative recovery.

Following several difficult years, the property sector remains in a phase of reorientation. Uncertainty has not disappeared, but some market segments are once again sending out more positive signals.

At the same time, the current EXPO REAL Trend Index shows that sentiment among market participants is more cautious than it was a year ago. 40 per cent of the exhibitors and visitors surveyed rate the current market situation as ‘cautious’ or ‘very cautious’. In 2025, the figure was 22 per cent. At the same time, the proportion of optimistic market participants has fallen from 44 to 25 per cent.

This more cautious assessment is, however, offset by increasing activity in the investment market.

The transaction volume for property investments in Germany rose again in the first half of 2026 compared with the same period last year. Depending on the market analysis, the increase stands at around 13 to 15 per cent. Residential and logistics properties in particular are contributing to this upturn. Residential remains the strongest asset class, accounting for around one-third of the investment volume. The transaction volume in the logistics segment rose by around 22 per cent to 2.9 billion euros.

This paints a mixed picture: capital is gradually returning to individual market segments, but there is still no sign of a broad-based recovery.

Capital and red tape are holding the market back

The key obstacles have hardly changed compared with previous years.

According to the respondents, the market’s future development is determined primarily by national economic and political developments, interest rate levels and the availability of capital. Added to this are regulatory frameworks and building regulations.

The verdict is particularly clear when it comes to bureaucracy. 73 per cent of respondents see the reduction of bureaucracy as a decisive factor for the sustainability of the property sector. Last year, the figure was 79 per cent.

The availability of capital, on the other hand, continues to gain in importance. 69 per cent of respondents cite it as a key driver, up from 64 per cent the previous year. A further 50 per cent would like to see a more harmonised legal framework in Germany. The transformation of the property stock remains an important issue for 43 per cent.

This highlights a key challenge facing the market: a willingness to invest alone is not enough. Projects must be financeable, capable of obtaining planning permission and economically viable.

“The Trend Index shows an industry caught between caution and signs of recovery. Transaction markets are picking up again, whilst structural challenges remain significant,” says Stefan Rummel, Managing Director of Messe München, summarising the situation.

Affordable housing remains an unresolved issue

The structural problems are particularly evident in residential construction.

74 per cent of respondents expect the residential asset class to continue to grow in importance in future. At the same time, the creation of affordable housing remains one of the sector’s most difficult issues.

The assessment of political measures taken to date is correspondingly critical. A majority of respondents rate the so-called ‘construction boost’ as a ‘four’ or lower on a school grading scale.

When asked about possible improvements, the picture is almost unanimous: 97 per cent consider a reduction in construction costs to be important or very important. Better financing terms also have high priority, with 94 per cent in favour.

In addition, serial and modular construction, as well as the conversion and further development of existing buildings, are gaining in importance. The sector is thus increasingly seeking ways to reduce construction time, costs and regulatory burdens.

The assessment is considerably more sceptical when it comes to government intervention in the market. Social housing quotas are regarded as appropriate measures by 49 per cent, whilst statutory rent controls are seen as such by 48 per cent.

The contradiction therefore remains: demand for housing is high, and investors continue to view residential property as attractive – yet it is precisely where additional capacity is needed that costs and regulatory conditions are hampering the development of new projects.

Data centres continue to rise in the rankings

One of the most striking shifts is evident in the assessment of the individual asset classes.

Residential property remains at the top with 74 per cent. However, data centres are already in second place. 69 per cent of respondents expect this asset class to gain in importance in future. In 2025, the figure was 63 per cent.

Data centres have thus overtaken care homes, which rank third with 64 per cent.

This result reflects a trend that extends far beyond the traditional property market. Increasing digitalisation, cloud applications and the expansion of artificial intelligence are significantly boosting the demand for data centre capacity. As a result, issues relating to land, energy supply, network connections, cooling and physical security are increasingly becoming property-related issues.

Data centres, in particular, exemplify just how closely property and technical infrastructure are intertwined.

The value of a plot of land is not determined here solely by its location and size. Equally crucial are energy availability, network capacity, redundancy, connectivity and the ability to safeguard sensitive infrastructure in the long term.

Traditional asset classes are losing momentum

Whilst residential property, data centres and infrastructure are gaining in importance, traditional property segments continue to be valued much more cautiously.

Only eight per cent of respondents expect the retail sector to grow in importance. Office properties and car parks each account for nine per cent.

These figures highlight a structural shift that has been evident for several years now. Working from home, changing working models and new usage concepts are weighing on parts of the office market. In the retail sector, online business and changing consumer behaviour are putting pressure on traditional retail space concepts.

As a result, capital is increasingly shifting into sectors where demand is more strongly driven by fundamental social and technological developments: residential property, healthcare, digital infrastructure, energy and logistics.

Investors remain selective

The Trend Index also reveals a certain shift in the structure of investors.

Funds and asset management companies remain at the top with 81 per cent, but have lost ground compared with the previous year. In 2025, their share stood at 89 per cent.

Private equity also accounts for 81 per cent. Family offices, as well as insurance companies, pension funds and pension schemes, follow closely behind.

The high importance of different sources of capital underlines just how heavily the property sector continues to rely on institutional and private capital.

Residential property continues to dominate investment priorities. 67 per cent of respondents cite residential buildings as a relevant target.

However, digital infrastructure – particularly data centres – and social infrastructure for education, healthcare or public administration are already following some way behind.

This is simultaneously broadening the traditional understanding of property investment.

Infrastructure is becoming an asset class in its own right

One of the most interesting developments highlighted by the Trend Index concerns infrastructure.

46 per cent of respondents state that infrastructure projects have become more important to their business over the past five years. 71 per cent agree with the statement that infrastructure must be given greater consideration in property projects today than it was five years ago.

The expectations regarding financing are even clearer: 70 per cent anticipate that the rising investment requirements will, in future, have to be met increasingly by private and institutional investors.

This is blurring the boundaries between property and infrastructure investment.

Energy infrastructure, data centres, healthcare and education facilities, as well as security-critical and particularly resilience-dependent facilities, combine land, buildings, technical utilities and long-term operational models.

EXPO REAL is responding to this by broadening its scope. Under the title InfrastructureNow, investable infrastructure projects will, for the first time, be given their own dedicated focus.

The aim is to bring investors, financiers and project developers more closely together with stakeholders from the property sector.

“Property and infrastructure are increasingly being considered in tandem – both in project development and in investment decisions,” explains Claudia Boymanns, Exhibition Director of EXPO REAL.

This development is likely to extend beyond the trade fair.

This is because the investment requirements for energy supply, digitalisation, mobility and public infrastructure are considerable. Government funding alone will be barely sufficient to cover many of these projects. At the same time, institutional investors’ interest in infrastructure investments that can be planned for the long term is growing.

Property is becoming part of technical ecosystems

The Trend Index thus points to a more fundamental shift.

For a long time, a property could largely be assessed on the basis of its location, use, floor area, financing and yield. These criteria remain crucial. However, technical and infrastructural factors are increasingly coming into play.

In the case of data centres, the energy supply determines the quality of the location. Logistics properties require high-performance transport and digital infrastructure. Modern neighbourhoods depend on energy, mobility and communications concepts. Healthcare and public sector properties require resilient supply structures.

As a result, property is increasingly becoming an integral part of a technical ecosystem.

This development also has implications for security concepts. The more closely buildings are connected to energy, data and communications infrastructures, the less possible it is to separate property, infrastructure and security planning from one another.

This applies in particular to data centres, energy facilities, logistics sites and other infrastructure-related properties, where physical protection, access management, cybersecurity, redundancy and operational capability must be considered jointly from the outset.

Europe remains a key investment focus

Despite economic uncertainties, Europe remains the most important future market for respondents.

33 per cent rate Europe as ‘very important’, with a further 44 per cent rating it as ‘important’. Overall, the continent thus accounts for 77 per cent, down from 80 per cent in the previous year.

Within Europe, Western Europe – including the D-A-CH region – and Northern Europe are regarded as particularly attractive future markets.

At the same time, the Asia-Pacific region continues to gain in importance. 67 per cent see significant future prospects there, compared with 64 per cent the year before.

Here, too, there is no sign of an abrupt change of direction, but rather a gradual shift within an increasingly internationalised investment market.

Between recovery and structural change

The EXPO-REAL Trend Index 2026 does not paint a picture of a market experiencing a classic upturn.

Sentiment remains too cautious, financing too challenging and cost and regulatory pressures too high for that.

At the same time, it would be equally wrong to speak solely of stagnation. Transaction volumes are rising again, capital is returning to selected segments, and clear investment priorities are emerging in residential property, logistics, data centres and infrastructure.

The decisive development may well lie at a deeper level anyway.

The property market is not merely changing direction; it is broadening its scope.

Property is becoming more closely linked to energy supply, digital infrastructure, mobility, public services and resilient operations. This is creating new points of interface between the property sector, infrastructure investors, technology providers and security managers.

The growing importance of data centres and investable infrastructure in particular shows that, in future, buildings will increasingly need to be viewed as part of complex supply, data and value-creation systems.

This opens up new markets for investors. At the same time, the demands on planning, financing and operations are rising. The quality of a location will depend more heavily on energy availability, grid connectivity and technical infrastructure. Issues of resilience, security and long-term operational viability are becoming relevant at earlier stages of projects.

This is also changing the logic of investment.

Properties no longer compete solely with other properties. Capital is increasingly being allocated between different forms of long-term infrastructure: between housing, logistics, data centres, energy projects, social facilities and other investable real assets.

This is precisely where EXPO REAL 2026 is likely to place its most interesting emphasis.

The trade fair is taking place against the backdrop of a market that, whilst cautiously stabilising, is at the same time undergoing a fundamental reorganisation. The focus is no longer solely on when traditional transaction markets will return to their previous levels. At least as important is the question of where new investable structures are emerging and how property, infrastructure and capital will be considered together in future.

The Trend Index provides a remarkably clear signal in this regard: caution still prevails. Yet capital is beginning to flow again – more selectively than before and increasingly towards areas where property intersects with infrastructure, utilities and long-term social demand.

As a result, EXPO REAL 2026 will serve less as a stage for a traditional property boom and more as a barometer of a market that is currently broadening its very definition of property.

EXPO REAL 2026 will take place from 5 to 7 October 2026 in Munich.

The Trend Index is based on an online survey of 430 exhibitors and visitors to EXPO REAL. The survey was conducted in August 2026 by the independent market research institute IfaD on behalf of Messe München.