Real Estate Capital Market KPIs – updated every month for you
Our PwC Real Estate Monitor provides you with a range of monthly derived Real Estate Capital Market KPIs. Our analyses are based on major listed German Real Estate Companies and provide you with sound insights into developments in the real estate industry.
The Real Estate Industry
With more than 20 percent of national income before the automotive and engineering industries, the real estate industry is one of the largest economic sectors in Germany. The dynamic business environment opens up new growth opportunities, but also brings with it new challenges and risks. Market participants must ensure that they anticipate developments in the markets at an early stage. Therefore, their success depends to a large extent on valid market information. PwC’s Real Estate Monitor provides monthly information on key capital market benchmarks that highlight current trends in the real estate industry.
Real Estate Monitor, April 2024
Performance indices for residential (151) and commercial property (196) continue to converge
Stocks of residential property portfolio holders show slight recovery in March
In March 2024, the PwC Real Estate Indices for commercial property stagnated, while the index for residential property portfolio holders rose again slightly. While the stocks of residential property holders increased by +9.8% on average to 151 points, commercial increased by +0.9% during the same period, reaching 196 points.
Although expectations of future interest rate cuts have briefly revived the market in March, the extension of the rent freeze (“Mietpreisbremse”) could put pressure on the market for residential property portfolio holders again.
The WACC for German real estate companies remains unchanged at 5.2% (+/- 0 bps) while its global counterpart decreased to 7.2% (-10 bps).
The EBITDA multiples (Residential: 25.5x & Commercial: 19.2x) show no significant change compared to the average of the previous quarters.
Stock price data per company within the respective peer group is collected using the S&P Capital IQ Data Idem „IQ_ClosePrice_Adj“. Capital IQ defines the Close Price as: The closing price of the day, calculated once per day after the market close. Close prices are adjusted for stock splits, cash dividends, rights offerings, and spin-offs. The underlying peer groups are revised and adjusted once per year on 31 December. New players on the German real estate market are thus identified and included, while delisted companies are excluded.
“Reliable benchmarks are key for every investor in order to balance the information asymmetry in a real estate investment process.”
Real Estate Benchmarks
- PwC Real Estate Index
- WACC
- EBITDA Multiple
PwC Real Estate Index
The Index shows the development of respective peer group (residential and commercial) companies’ stock prices on a monthly basis. Stock price data per company within the respective peer group is collected from S&P Capital IQ and reflects the closing price of the day after adjustment for stock splits.
WACC
The WACC is the rate of return required by investors (both debt and equity) taking into account the systematic risk characteristics inherent in the business. The derived WACC is an average value of a peer group of German listed real estate companies as well as its global counterpart.
EBITDA Multiple
The EBITDA Multiple is a financial indicator that relates the enterprise value of a company to its EBITDA. We have derived the EBITDA Multiple based on last twelve month available EBITDA and the capitalized value for each company within the peer group (residential and commercial).
Real Estate KPIs
Development of the RE KPIs generally consistent with the development of the performance indices
In order to gain insight into the changes in value of 17 major players in the German real estate market, we have analysed the sector-specific Real Estate KPIs FFO 1 and EPRA NTA from the financial periods FY2021, FY2022 and TFQ2024 (TFQ: Trailing Four Quarters). We have put the share prices as of the balance sheet dates 31 Dec 2021, 31 Dec 2022 and 31 Mar 2024 in relation to the above-mentioned key figures from the corresponding financial periods. The resulting average ratios by segment are shown in the figures below.
FFO 1 multiples and Price/EPRA NTA ratios by segment
The table below shows the individual FFO 1 multiples and Price/EPRA NTA ratios of our peer group by segment. The key figures relate to the financial periods FY2021, FY2022 and TFQ2024 and the share prices as of 31 Dec 2021, 31 Dec 2022 and 31 Mar 2024.
Reading example: TAG Immobilien AG was valued by the market at 5.6x of its FFO 1 as of 31 Dec 2022, whereas on 31 Mar 2024, it was valued at 12.6x of its FFO 1.
Valuation level remains stable
Compared to the end of FY2022, Commercial's current valuation level (as of 31 Mar 2024) has decreased by -22.9% (FFO 1 multiple) and -18.7% (Price/EPRA NTA ratio). On the other hand, the current valuation level of Residential has increased by +27.0% (FFO 1 multiple) and +27.3% (Price/EPRA NTA ratio).
Previous Issues
Disclaimer (important notice): This publication includes information obtained or derived from a variety of publicly available sources. PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft does not give any representation or warranty of any kind (whether expressed or implied) as to the accuracy or completeness of this publication. This publication has been prepared solely for general informational. Nothing in this publication should be construed as individual advice. Before making any decision or taking any action, you should consult the sources or contacts listed here. The graphics may contain rounding differences.
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