OFFICE INVESTMENTS SLIGHTLY ABOVE LAST YEAR’S LEVEL
The German office investment market started the new year with a transaction volume of €1.8 billion and as the strongest commercial asset class. This is the third time in a row that the result is at a stable level with a moderately increasing momentum. Compared to the previous year, an increase of 5% is registered. Even if the 10-year average is clearly missed, it is the best result since the interest rate turnaround.
In addition to a continuously brisk investment momentum in the smaller segments, the increasing number of large-volume deals is currently having a positive impact, including the new building of the NRW financial administration in Kaarst. Furthermore, German investors are particularly involved with 88% market share, but this is to be understood as a snapshot. Foreign investors are currently intensively exploring the attractive investment opportunities offered by the German office investment market. They are aware of the stabilised tenant structures, rental markets and the potential for rental growth.
Prime yields have largely solidified at the previous year's level. There were only singular adjustments in Berlin and Stuttgart, with an increase of 10 basis points each. Munich remains the most expensive location with 4.20%, followed by Hamburg with 4.25%. The net prime yield in Berlin is now 4.35%, followed by Cologne with 4.40%. Düsseldorf, Frankfurt and Stuttgart are trading at a peak of 4.50%.