TOP 7 INVESTMENT MARKETS 1Q2024: Looking firmly ahead
HAMBURG / 03.04.2024
First the good news: in the 1st quarter of 2024 the volume of investment transactions in commercial properties located in Germany’s top 7 cities grew by 19 % year on year. Sales totalled €2.50bn.
Now the bad news: a year ago the volume traded in the top 7 (€2.10 bn) was lower than in any first quarter bar one – in 2009 the total result was €1.66bn. Therefore the current increase is more of an arithmetical blip than a sustainable market recovery. This emerged from figures compiled by German Property Partners (GPP).
“Between January and March very few sales were completed in Germany’s top 7 cities. Accordingly, the mood was rather subdued,” says GPP spokesperson Björn Holzwarth.
- In the early part of the year there was enormous variation in trading activity in the top 7 cities. Whereas in Stuttgart, for the first time ever, not a single sale was completed, trading in Munich skyrocketed by 142 % due to two big-ticket sales. These two transactions comprised 80 % of Munich’s result.
- Accounting for 15 % of the transaction volume (1Q23: 40 %) international investors steered clear of the top 7 cities. In Düsseldorf, Frankfurt, Stuttgart and Munich no overseas buyers made any purchases at all. However, international players are keeping a close watch on the German market so they do do miss any opportunities.
- Due to the two large trades in Munich mixed-use real estate accounted for the lion’s share of 49 % of the transaction volume, ahead of office buildings (18 %) and logistics real estate (13 %). Mixed-use assets thus posted the biggest surge, with growth of 509 %.
Holzwarth: “Office buildings are generating more interest again. At present the market offers very good opportunities to cash-rich buyers. The prime yields on offices and on industrial and logistics properties have converged appreciably, whereby the low number of transactions means that these parameters have limited information value. In view of falling inflation and a possible base rate reduction, more people are entering into talks and investigating a variety of approaches. This points to a moderate market revival as the year progresses.”
GPP commercial property network consists of Grossmann & Berger, Anteon Immobilien, GREIF & CONTZEN Immobilien, blackolive and E & G Real Estate.