TOP 7 INVESTMENT MARKETS 2Q2024: Growing number of transactions expected in second half year

In Germany’s top 7 cities the volume of transactions in commercial real estate totalled €4.6bn in the first half of 2024, falling 7 % below the low figure posted a year before. This is the second-weakest half-year result since 2009. “As in the past, private investors, family offices and corporates are among the most active buyers on the market,” comments GPP spokesperson Björn Holzwarth. “Consequently, most of the transactions completed are in the small to mid-sized price segments. Big-ticket trades remained rare in the second quarter”.

  • Across the board, the top 7 reported an ongoing pattern of few transactions, most of which were small to medium-sized trades. In Stuttgart and Berlin GPP noted a pronounced slump with transactions falling by 54 % and 38 %. By contrast, the totals in Munich (+138 % to 1.36bn) and Frankfurt (+67 % to €534m) shot up.  This growth stems from two large-volume trades in Munich at the start of the year and several big-ticket trades in Frankfurt. Of all top 7 cities Munich, capital of Bavaria, thus posted the highest transaction volume, followed by Berlin at €1.18bn.
  • Thanks to the large properties that changed hands in Munich and Frankfurt, mixed-use real estate was the most traded class of asset. Such properties accounted for 34 % of the volume traded in the top 7 cities, followed by offices with about 21 % of the total.
  • Year on year the proportion of portfolio acquisitions fell from 31 % to about 6 %. In Düsseldorf, Frankfurt, Stuttgart and Munich no portfolio trades were posted.
  • During the 1st half year prime yields stabilized in most cities surveyed. The gap between yields on offices and on industrial or logistics properties remains small. In Hamburg, Cologne, Frankfurt and Stuttgart yields are at the same level.

Holzwarth forecasts that, “In some cities we observe an increase in preparatory sales work, so that it is likely that more transactions will be completed before the year ends. Potentially, the sale of more Signa properties could boost the volume of trading. The ECB lowered interest rates in June, so investors will probably take this as a first sign that they can afford to be less cautious. However, we do not expect the market to recover in 2024.”

German Property Partners (GPP) consists of Grossmann & Berger Immobilien, Anteon Immobilien, GREIF & CONTZEN Immobilien, blackolive and E & G Immobilien.

Katharina Koester

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Katharina Koester

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