OFFICE INVESTMENT MARKETS CLEARLY UP
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The office investment markets closed the first half of the year with an investment volume of just under €2.7 billion. After a strong start to the year, which included the sale of the Upper West in Berlin, the second quarter was somewhat quieter. Overall, there was an increase of about a fifth compared to the same period of the previous year.
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Investors continue to focus on core and core-plus assets. Together, these assets account for around 80% of the total volume. However, investors are not only focusing on A locations. There is also demand for attractive office properties with a solid tenant roster in B, and C cities. These locations are reporting volume growth similar to that of major metropolitan areas, which underscores this point.
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The portfolio segment remains underrepresented in the latest results. Currently, the transaction volume is based solely on single deals. However, the average transaction size is increasing again: after averaging around €20 million per deal in the same period last year, the average is currently slightly higher at €24 million.
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The sideways movement in prime yields continued in the office segment in the second quarter. Accordingly, the average net prime yield across all A-locations remained at 4.36%. Munich was the most expensive location at 4.20%, followed by Berlin and Hamburg at 4.25%. Cologne and Stuttgart followed with 4.40%. Currently, Frankfurt and Düsseldorf are the cheapest A-locations at 4.50%.