According to Savills latest report, the German real estate investment market for commercial and residential properties (transactions of at least 50 residential units only) has gained some momentum in recent months. Transaction volumes in the third quarter totalled almost €7.6bn, which was around a fifth higher than in the previous quarter. Between January and September, properties changed hands for a total of c.€21.6bn.

Of the total investment volume for the first three quarters of the year, the living sectors accounted for c.€5.5bn (-13% year on year), followed by retail with €4.3bn (-3%). The office sector moved ahead of industrial/logistics property for the first time in a long time: The former was responsible for c.€3.6bn of volumes (-1%), while the latter accounted for c.€3.5bn (-17%). Healthcare and care homes achieved a transaction volume of c.€1.1bn (+103%), a third of which was based on the sale of a care home portfolio by Deutsche Wohnen AG. 

Prime yields remained unchanged across all sectors, ranging between 3.6% for apartment buildings and 5.8% for shopping centres.

Karsten Nemecek, Deputy CEO Germany and Head of Capital Markets, says: “The deals pipeline is slowly translating into a rising number of completed transactions. However, our general view remains unchanged: the recovery is fragile in view of the unstable market conditions.”

While institutional buyers were also more active once again, private sources of capital, including family offices, remain the backbone of the investment market. With a direct acquisition volume of c.€3bn, they were the second largest buyer group behind investment managers (€5.9bn). Private equity firms and the public sector shared third place, accounting for net acquisition volumes of around €600m. 

Matthias Pink, Head of Research Germany at Savills, says: “In the office investment market in particular, institutional investors remain reserved and private investors are seizing the opportunity to secure high-value properties. The latter are also among the most active investors in retail and the living sectors.” 

Private investors/family offices are on track to set a new record for acquisition volumes this year, says Savills, with the previous benchmark of €3.4bn being set in 2019. 

For further insights, please visit our
Dashboard Investment Market Germany