The interview by André Eberhard (Editor-in-Chief of Immobilien Manager) with Viktor Weber was published on 12.02.2024.

What is your view of the transaction market in 2024?

There is no good carnival atmosphere yet, as the Fed remains cautious and the ECB is unlikely to cut the key interest rate first. The issue of non-performing loans at some banks and the insolvency reports are also causing concern, and in the preliminary discussion you said that there was also a glimmer of hope. That doesn't sound like much.

In the preliminary discussion, you said that there was also a glimmer of hope. That doesn't sound like much.

That's right. Now to the positive.

Our 330+ clients have used Acquirepad for a good billion euros of deals in the last year. Even more are in the process of preparing for sale in 2024. We can see in real time which transactions are working and how asking and offer prices are moving. All data is not visible to third parties, but is securely stored in our database with a time stamp. This is a unique real-time insight into the market. And it reveals that the momentum is increasing.

That really sounds like a glimmer of hope. Can you briefly explain exactly how this works with Acquirepad and how you get such data?

Professional sellers can create assets confidentially on the platform. Our artificial intelligence then checks several thousand purchase profiles for each property, which corresponds to a total of over 90,000 data points per asset. This results in a longlist of investors, from which the seller manually creates their shortlist and confidentially invites only these investors to the transaction, who are then automatically notified. We then map teasers, NDAs, IMs, data rooms, research data and offers on the platform in an intuitive workflow so that we can actually see how transactions are developing in real time. The process therefore offers transparency and security for both parties to the transaction, meaning that Acquirepad is also used by BaFin-regulated KVGs and their funds.

And what other positive signals besides deal volume can be gleaned from the data?

Depending on the asset class and location, of course, we notice how high the feedback rates are for transaction invitations. With a total of more than 2,500 transaction invitations, we usually receive almost 90 percent feedback from our registered customers. For companies that are not yet registered on the platform but whose purchase profiles we have in our database, the average response rate is 40 percent. This feedback has increased over the course of the year, which is a positive signal.

Although the deal volume decreased at the end of 2023, it has been rising much faster since January 15, but in the form of somewhat smaller properties in the range of 5 - 20 million.

More bids are also being placed that match the asking prices. Whereas six months ago there were still some insurmountable deltas, these are increasingly closing, particularly in the residential, food retail and land segments. Logistics, healthcare and light industrial are also converging. This continues to be a positive signal.

And what about offices?

It depends even more on the asset, i.e. location, condition, tenant structure and so on, but that is no surprise. A look at the USA shows rising vacancy rates, which only become apparent here with a lag due to longer-term rental agreements. However, if you talk to asset and portfolio managers, it becomes clear that requests for subletting are frequently received even for officially rented space because it is not being used sufficiently. I have also written several articles for you on this subject from 2020 and the predictions are now coming true. Nevertheless, there is a convergence here too. In my personal opinion, sustainable assets in good locations with future-proof space concepts will appreciate again in the long term. I am not alone in this, but there are some opportunistic investors, including some from abroad, who are now updating their acquisition profiles and are on the lookout. The USA, Switzerland and the UK dominate here.

Does the investor who deposits a purchase profile immediately see an asset?

We are often asked this question. Yes, if a company receives an email from us that there is an offer on Acquirepad, then you can see this immediately after registration. Otherwise, you won't see any assets unless you have been explicitly invited. If you want to make a purchase, you register and confidentially enter your purchase profile, whereby investment managers in particular enter much more detailed purchase criteria for individual funds. This data can only be viewed by the company itself and is only processed by our algorithm in order to check the profiles for our sellers. This means that the seller controls the process. They see the name of the company with a matching score for their asset, but not the exact purchase profile data. Nobody except the companies that are invited to the transaction see the asset. The process is therefore completely discreet and no data is leaked.

Can you give us an insight into who is active with you and who is buying or selling?

Unfortunately, I can't really talk out of the box. We recently conducted a survey in which 135 of our clients took part. These included project developers, investment and asset managers, REITs, private equity, family offices, a few banks and insurance companies. In fact, and somewhat surprisingly even for us, 49 percent of investors primarily want to buy in 2024. 34 percent are planning both acquisitions and sales. The clear majority therefore see the potential for acquisitions again this year, whereby attractive prices and the quality of the assets continue to be decisive. From the personal discussions, it is clear that no one assumes that the "pre-crisis price level" will soon be reached again. For 17 percent of companies, only sales are planned. However, it must also be said that such information continues to be handled with particular confidentiality, which is why we assume a higher number of unreported cases.

You don't think every company wants to admit in a survey like this that it has to sell?

Exactly. However, I can reveal the unsurprising top reasons for sales, namely ESG-induced portfolio adjustments and liquidity procurement. We also monitor the issue of insolvencies closely, which is why Acquirepad also works with renowned insolvency administrators and companies under self-administration.

Another indication of greater interest in selling is the increasing use of our platform to assess marketability. Portfolio managers are currently evaluating which assets should be sold in 2024 and are marketable at all.

Despite the promising developments, you don't seem euphoric. Why is that?

In my opinion, it is too early for euphoria. However, the waters have become somewhat calmer overall in Germany, even if there are some potential external shocks on the horizon. I am thinking here of financiers that have got into difficulties, uncertainty regarding interest rates and geopolitical risks. However, there are glimmers of hope and a willingness to develop projects and carry out transactions in the new market. The industry is adapting.

You can find the original article at: https://www.immobilienmanager.de/fuer-euphorie-ist-es-meiner-meinung-nach-zu-frueh-12022024