Bell Management Consultants
The 13th Asset Management Report, released at the end of November by Cologne-based Bell Management Consultants, shines a spotlight on the growing operational pressures facing Germany’s real estate asset management sector. With efficiency and resource constraints increasingly shaping decision-making, process optimisation has become a core focus for asset managers.
The 2024 report highlights the consolidation of the sector, with only 30 asset management firms participating, down nearly 20% from 2023. Market leaders Deka Immobilien and Art-Invest Real Estate maintained their dominance, managing €17.25 billion and €10.9 billion in assets, respectively. Their stable performance reflects the persistently low transaction momentum in the real estate market, with transaction volumes in Germany still hovering far below pre-pandemic levels. This downturn has been driven by rising financing costs and economic uncertainty, which continue to stifle activity in key markets.
Simon Schneider, Research Manager at Bell Management Consultants, emphasised the urgency of improving operational efficiency. “Scarce resources and high demands are forcing companies to decide which tasks can be implemented and which must be postponed,” he explained.
Nearly half (46%) of asset managers are now considering insourcing property management services to streamline operations. This reflects a broader trend of integrating tasks internally to cope with escalating requirements and limited staffing.
ESG Implementation and Skilled Worker Shortages
Environmental, social, and governance (ESG) standards remain the sector’s most pressing challenge, with 43% of firms identifying it as a top priority. However, the report suggests that the bottleneck is not the regulations themselves, but the resources required for implementation. Schneider noted, “Even large companies struggle with too few staff to meet the additional demands of ESG compliance.”
The shortage of skilled workers compounds these challenges, forcing firms to set stricter priorities and even reduce the scope of services. Schneider observed that companies are under scrutiny to determine whether current resources are sufficient to deliver promised results.
The report’s findings underline the pressures asset managers face in balancing institutional investor expectations, regulatory requirements, and operational constraints. Low transaction activity, driven by economic headwinds, not only limits asset management firms' revenue streams but also creates knock-on effects for developers and investors. Tighter credit conditions and a reduced appetite for acquisitions are delaying projects and compressing timelines, leaving fewer opportunities for asset managers to create value.
For over a decade, Bell Management Consultants has provided critical insights into the institutional real estate asset management market through its annual report. This year’s edition continues to highlight the evolving dynamics and challenges reshaping the sector. For a copy of the report, contact Simon Schneider at: simon.schneider@bell-consultants.com
