wbr Frankfurt
The German real estate investment market has recovered in 2024, even if it continues to struggle with uncertainty. The major players in the market confirm a slight increase in transaction volumes.
According to CBRE, transaction volume increased to 22.2 billion euros in the first three quarters of 2024, an increase of 9% compared to the previous year. Investments were concentrated on the seven top locations, which accounted for almost half of the total volume. The markets also benefited from the European Central Bank’s first interest rate cuts.
Office segment continues to stagnate
JLL describes the market as being in a bottoming phase. Interest is concentrated heavily on residential and logistics properties, which represent almost 50% of the total volume. However, institutional investors remain cautious, particularly in the office segment, where volumes continue to stagnate. However, A-locations such as Berlin and Munich are recording positive developments.
Savills emphasizes the consistent top yields that make transactions easier. With sales of 16.4 billion euros, the commercial real estate market remained at the previous year’s level. The company also sees a high level of interest in residential and logistics properties. The office segment, however, remains problematic. Savills emphasizes the potential of value-add strategies, particularly through converting office buildings into residential developments.
Interest rate cuts boost sales
From BNP Paribas Real Estate’s perspective, the market is benefiting from the interest rate cuts, which would have led to improved financing conditions. Retail and logistics investments would stand out with sales of €4.9 billion and €4.4 billion respectively, while the office segment would remain weak. The increase in portfolio deals is noteworthy, increasing by 40% compared to the previous year.
Brokers expect the recovery on the markets to continue to be moderate. However, a year-end rally like in previous years is not in sight.
