CLEAR LEADER AMONG THE A-CITIES
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The Munich investment market closed September with a commercial investment volume of around €1.7 billion, retaining its position as the strongest investment market among Germany’s A-cities. Against the backdrop of the latest interest rate hike and ongoing geopolitical conflicts, transaction volume in the third quarter was somewhat lower at around €470 million, in line with the nationwide trend. However, the fact that both large-volume transactions and several non-core deals were successfully completed in recent months reflects the continued high level of confidence in Munich. This is further underpinned by the office occupier market, which posted its strongest result since 2022 and continues to generate strong rental growth, particularly in the premium segment. Compared with prior year, a higher number of large-volume transactions was also recorded. These include the sale of Alte Akademie to the Thiele Foundation in the retail segment, as well as the sales of the centrally located office properties at Prinzregentenplatz 7-9 and Sonnenstraße 15 (formerly Lindbergh-Haus).
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In terms of prime office yields, Munich remains one of the most stable markets. While initial adjustments have been recorded in other cities in response to changing capital market conditions, the net prime office yield has remained stable at 4.20% since 2023. Adjustments for high-street assets have also been relatively limited, with yields currently standing at 3.50% (+5 basis points y-o-y). Only logistics properties have followed the nationwide trend, with the prime yield rising to 4.70%, 30 basis points above the prior-year level.