Munich’s commercial real estate transaction volume was around EUR 505 million in the first quarter of 2023, according to figures from international real estate consultancy firm Cushman & Wakefield (C&W). Compared to the first quarter of 2022, this corresponds to a fall of 47 percent.
Few large office transactions
While the office segment still accounted for 73 percent of transaction volume in the first quarter of 2022, this fell to 37 percent (EUR 185 million) in the first quarter of 2023, when Cushman & Wakefield noted only three office transactions, including two in the value-add segment, the sales of the property at Nymphenburger Strasse 112 for around EUR 65 million to Becken Holding AG and the sale of Ungererstrasse 71 for around EUR 18 million to Bauwerk Capital GmbH & Co. KG. One core asset was acquired by an insurance company for over EUR 100 million. For comparison: In the first quarter of 2022, six office buildings with a total transaction volume of EUR 700 million changed hands.
Other asset classes the focus of investors’ attention
With a transaction volume of around EUR 290 million or 57 percent of the CRE total, the focus of transactions in the first quarter of 2023 was on asset classes other than the usual office, retail, hotel, industry/logistics. A plot of land at Seidlstrasse 15 was sold for EUR 250 million, which was the largest transaction of the quarter, and there were also further transactions of mixed-use buildings and a school and university building.
Retail and industry/logistics each achieved transaction volumes of EUR 15 million in the first quarter of 2023. Compared to the first quarter of 2022, this represents decreases of 70 percent and 85 percent respectively.
Jan Isaakson, Head of Capital Markets Munich at C&W, summarizes: “While many investors from the insurance or pension fund sectors are currently acting rather cautiously, private buyers and family offices are becoming increasingly active. Established locations continue to be preferred by buyers. With regard to the existing transaction pipeline, it is assumed that sales will increase in the coming months.”
Further increase in prime office yields
The prime yield for high-quality, modern core office properties in Munich was 3.50 percent at the end of the first quarter of 2023, 20 basis points above the level of the previous quarter and 100 basis points above the level of a year ago (Q1 2022, 2.50 percent).
At the end of the first quarter, the prime yield for 1a retail properties was 3.40 percent, 20 basis points more than in the previous quarter. In the first quarter of 2023, logistics properties traded at a prime yield of 4.15 percent, thus exceeding the 4 percent threshold.
