(Bloomberg) -- Germany’s property sector is poised for a rebound in 2024 after the volume of transactions plunged 57% last year, according to BNP Paribas.

Deals in German commercial real estate amounted to about €23.3 billion ($25.5 billion) in 2023, compared with €54.1 billion in the previous year, BNP said in a report. Volume increased in the fourth quarter from the previous three months, hitting the highest level since the end of 2022. 

There was a “clear pickup” in deal preparation between October and December, which will lead to rising volumes in 2024, Marcus Zorn, head of BNP Paribas Real Estate Germany, said in the report. With activity likely accelerating in the second half, a sales rise of 20% in the current year is “quite realistic,” he added.

Germany has been hit hard by a property market slump that was triggered when rising interest rates ended a decade-long boom. With deals slumping to the weakest levels since the aftermath of the financial crisis, weak economic growth, ongoing geopolitical crises and a slumping labor market will continue to weigh on activity. 

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Sales have slowed as sellers balk at granting the steep discounts sought by buyers, but as debt refinancing looms, more landlords may be prodded on to the market. Vonovia SE, Germany’s largest residential landlord, has said it plans to sell assets, especially commercial real estate, to lower its debt burden.

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