RESIDENTIAL REMAINS THE STRONGEST ASSET CLASS
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The German residential investment market remained robust through the end of the third quarter of 2026. With an investment volume of €5.9 billion in residential portfolios of 30 units or more, the prior-year result was missed by only 5%. While the moderate market recovery seen so far this year has continued, albeit with slightly weaker momentum, market conditions have recently become more challenging again.
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Following four existing residential portfolio transactions above €100 million in the second quarter, only one transaction of this size, the Polarlicht portfolio, was recorded in Q3. At the same time, a large number of mid-sized existing residential portfolio transactions contributed significantly to the transaction volume of around €860 million generated in this segment in the third quarter. This underlines the return of larger value-add transactions. The recent rise in capital market yields and heightened geopolitical uncertainty have made price discovery more challenging again and led to more selective investor behavior. Investments in new-build projects in particular have become more challenging amid higher yield requirements. However, strong residential market fundamentals continue to support high demand for residential investments. Against this backdrop, residential remains one of the most attractive asset classes on the German investment market.