Cushman & Wakefield, one of the world’s largest real estate consultancies, recorded investment turnover of EUR 1.91 billion in the Berlin commercial real estate market in the first half of 2024. The volume is 49 percent below the 5-year average of the respective 1st half-year and thus remains at a low level.
Clemens von Arnim, Head of Capital Markets Berlin at Cushman & Wakefield, summarizes: “There is still uncertainty on the Berlin investment market, primarily due to external factors. The first interest rate cut has hardly changed the behavior of institutional investors. The next few months will continue to be largely characterized by insolvency-related sales.”
Transaction volume: one transaction dominates the market
- Of the EUR 1.91 billion transaction volume in the first half of the year, around EUR 1 billion was attributable to the complete sale of Signa’s KaDeWe property to the Thai Central Group. This makes the transaction volume 35 per cent higher than in the first half of 2023. Without this sale, the volume for the first half of the year would have been the lowest in ten years.
- Another significant transaction was the acquisition of a supra-regional portfolio of Austrian S Immo by the Livos Group, of which the Berlin properties account for around EUR 130 million. The sale of the “Hotel de Rome” at the beginning of the year was similarly large at 145 million euros.
Yields: Prime yields remain at a high level
- The prime yield for office properties rose slightly and now stands at 4.80 per cent (+85 basis points compared to Q2/2023). Within two years, the increase thus adds up to 195 basis points and follows the rapid rise in bond yields.
- The prime yield for city center commercial properties remained constant compared to the end of March and is still at 4.35 per cent (+55 basis points compared to Q2/2023).
- The prime yield for logistics properties is currently 4.50 per cent, unchanged from the previous quarter but 35 basis points higher than at the end of Q2/2023.
Types of use: Weak half-year for office properties
- The transaction volume for office properties amounted to EUR 320 million in the first half of the year. This represents a decline of 11 per cent compared to the first half of 2023 or 83 per cent compared to the 5-year average of the respective first half-years. Of all types of use, office properties are currently experiencing the sharpest decline.
- In the first half of the year, Cushman & Wakefield registered logistics and industrial property transactions with a volume of EUR 130 million, which corresponds to an increase of 24 per cent compared to the first half of 2023. This is largely due to the acquisition of Pickens Selfstorage by Shurgard.
- Retail properties accounted for EUR 1.08 billion, mainly due to the sale of KaDeWe. There were also some sales of retail parks such as the “Cladow-Center”.
- Hotel properties changed hands for 155 million euros. However, only two transactions were recorded here.
- 177 million was transacted in land and EUR 229 million in mixed-use properties.
