The Federal Statistical Office has published the number of corporate insolvency applications for May 2026, which shows a slight decrease of 2.0 per cent compared to the same month last year. The current insolvency trend from the Leibniz Institute for Economic Research Halle (IWH) confirms this slight downward trend for July 2026, with 1,689 insolvencies of partnerships and limited companies, representing a one per cent decrease compared to June 2026. According to Dr. Christoph Niering, chairman of the Professional Association of Insolvency Administrators and Trustees in Germany (VID), this development primarily reflects an economic structural change and not a widespread wave of insolvencies.
Dr. Niering explains that not every business model that was successful ten years ago meets today's market conditions. Companies are facing significant pressure to adapt due to changing consumer behaviour, progressive digitalisation, higher financing costs, and new forms of work organisation. This requires an objective consideration and precise classification of the consequences of the necessary structural change, without resorting to alarmism.
Implications for the real estate market
The commercial real estate market, in particular, reflects this structural change. Since the COVID-19 pandemic, the world of work has fundamentally changed, manifesting in the increased use of home office, digital processes, and paperless offices. For many companies, this reduces the need for traditional office and archive space. In parallel, bricks-and-mortar retail has been under significant pressure for years, necessitating an adaptation of business models and space utilisation.
However, these changes do not mean that properties completely lose their value. Rather, it is about a need for value adjustments, not a total loss. The crucial question is whether the properties are used where there is actual demand. An example of this is the repurposing of suitable commercial and office properties into residential units, particularly in cities with scarce housing supply. The demand for housing is persistent, even if not every individual residential property is economically successful in every case.
Outlook and need for adaptation
Dr. Niering emphasises that the current development of insolvency events gives no cause for alarmism, but rather indicates economic change. Although every insolvency is painful for those affected and entails considerable consequences, capacities become available where old business models are no longer viable. It is crucial that capital, space, and labour can be channelled into future-oriented uses and innovative business models.
While the insolvency figures must be taken seriously, they do not prove a widespread crisis in the German economy. Instead, adaptability, willingness to innovate, and the courage to change existing structures are essential to successfully meet the challenges of structural change.
