Market for residential portfolios in Germany defies economic uncertainty with total investments of €2.3 billion in the first quarter of 2025
Following a rise in purchase and sales volumes, Open-Ended Funds and Special Fundsrepresent the second strongest buyer as well as the dominant seller group ahead of Project Developers and Contractors
Increase in portfolio trading in the mid-price segment; decrease in the category below €10 million
Outlook for 2025: General conditions remain challenging. Portfolio streamlining of properties in need of refurbishment, fire sales and resilience of the residential property markets are boosting transaction activity, however. A dynamic start to the year and increased investment interest on the part of institutional market players indicate that the €10 billion mark will be exceeded, as was most recently the case in 2022.
Take-up of 202,100 sqm represents one of the strongest Q1 results on record
Banks, financial service providers and insurance companies dominate the market
58 % of take-up lies within the Central Business District
Rise in vacancies is halted
Increase in rents owing to large lettings in projects, new buildings and refurbishments: prime rent now at €51.50/sqm and average rent at €30.60/sqm
Positive outlook for 2025: further major deals are close to completion; financial package from the new government will help boost demand for office space
NAI apollo: Rhine-Main logistics space market reaches 249,000 sqm in the first half of the year after an upturn in activity
Take-up in second-quarter of 2024 reaches 159,900 sqm and exceeds prior and year-ago quarters
Result primarily based on new building activity and sublettings
Take-up in large-space segment increases by 170 %
Industry and manufacturing represents the most important user group, followed by logistics service providers, while retailers remain less active
Broad distribution of market activities within the market area
Outlook: demand for space to remain at a high level; the supply of space is still insufficient owing to a lack of speculative building activity; weakening economy additionally slows down market activity in some cases; annual take-up at previous year’s level, and further rental price growth is expected
Transaction volume at €2.4bn, the highest quarterly level in a year and a half
Half-year result of €3.2bn represents lowest level since 2011
Increasing transaction activity in smaller portfolio segment
Public Sector quadruples purchase volume and is now the strongest investor group
Project Developers & Contractors as well as Listed Property Companies & REITs are the most active sellers
German investors are dominant on the buy-side with a share of almost 80 %, foreign players invest 33 % less
Outlook for 2024: sluggish economic development proves challenging for residential property market performance; market activity intensifies amid rising rents, an advanced bottoming out of prices and signs of stabilisation in interest rates; ongoing pressure to sell as part of refinancing measures and to secure liquidity, Berlin remains a hotspot for major investors.
Growth in new-building segment owing to a large lease signing
Large spaces account for highest share of take-up
Greatest demand came from industrial and manufacturing companies, while take-up by retailers was much lower
Outlook: difficult economic environment hampers market activity; space shortages remain the biggest problem; new developments remain scarce owing to high costs and a lack of suitable sites; sustained growth in rents can be expected
Quarterly result of around €790m represents the lowest level since 2010
Project developments account for a market share of more than 59 %
Increasing trade in smaller portfolios particularly in the value-add segment; significant falls in segments above €50m
Public Sector increases purchase volume and is now second-largest investor group after Asset Managers & Funds Managers
German investors dominate on buy side despite around 66 % decline in sales
Outlook for 2024: General conditions remain challenging; refinancing and securing liquidity increase pressure to sell; end of the price negotiation phase and stabilisation of interest rates encourage market activity; investment incentives in the rental market with rising excess demand and dynamic rental price growth especially in growth regions
Space take-up reaches 172,800 sqm in the fourth quarter of 2023
Annual take-up of 484,700 sqm is 40 % above the previous year, but remains below the long-term average
Take-up increases in segment for large spaces, of which sub-lettings account for 30 %
New building segment sees further decline in market activity
Warehousing and logistics service providers placed ahead of companies from industry and manufacturing
Outlook: shortage of available space continues to limit market activity; increase in new developments, especially from a speculative standpoint, is unlikely owing to higher costs and a lack of suitable sites; prime rent expected to exceed €8
Transaction volume amounts to €6.2bn for 2023 as a whole
Fourth quarter in line with previous three months at €1.4bn
Lack of large transactions has biggest negative impact on the overall result
Trading in project developments falls to a 22 % market share
Manage-to-green strategies and ESG conformity of growing importance
Asset Managers and Funds Managers are most active buyers, while Listed Property Companies dominate on the sell-side
Outlook for 2024: transaction activity expected to remain subdued in the coming months in light of the continuing difficult economic conditions; increased pressure to sell as a result of refinancing and to safeguard liquidity; signs of market recovery later in the year owing to a growing demand-supply imbalance on rental markets as well as dynamic rental trends and price stabilisation
