Cushman & Wakefield, one of the world’s largest real estate consultancies, has recorded a turnover of EUR 775 million for the Frankfurt commercial investment market in the first half of 2024. Compared to the previous year, the turnover result more than doubled with an increase of around 110 per cent. However, the 10-year average and the 5-year average were both missed by 64 per cent.
Michael Fleck, Head of Capital Markets Frankfurt and Central Region at Cushman & Wakefield, explains: “The result provides positive impetus for the Frankfurt commercial investment market. Sales are back on track, but the processes are taking longer than before the interest rate turnaround and it will take time for this development to be reflected in the sales result. We expect the market to gain further momentum in the second half of the year.”
Transaction volume: investment volume turbo-charged in the 2nd quarter
- With a commercial transaction volume of EUR 560 million, the sales result for Q2 2024 is around 160 per cent higher than the previous quarter and exceeds the same quarter of the previous year by around 180 per cent.
- The proportion of purchases by international investors was around 21%, 36 percentage points lower than a year earlier (Q1–2 2023: 57per cent). Both the owner-occupier purchase of Hauptwache 1 by Frankfurter Sparkasse and the sale of the Opernplatz 2 property to Capital Land Holding for several family offices and the acquisition of Bockenheimer Anlage 15 by the German investment company Conren Land have strengthened the share of national capital on the Frankfurt market.
- At around 53 per cent, sales in the Opportunistic and Value-Add risk classes predominated in the first half of the year. Core-plus transactions accounted for just under 35 per cent.
Yields: Slight quarter-on-quarter increase in prime office yields
- From June 2023 to June 2024, the prime office yield for core properties in Frankfurt rose by 95 basis points to currently 4.90 per cent.
- The prime yield for city centre commercial properties increased by 45 basis points year-on-year to 4.55 per cent. The prime yield for logistics properties is currently 4.50 per cent, 35 basis points higher than a year ago.
- Prime yields for logistics properties and city centre commercial properties have thus stabilised since the end of 2023. The prime office yield has risen by 20 basis points compared to the end of the first quarter of 2024.
- Cushman & Wakefield expects yields to remain stable across all asset classes for the remainder of the year. The moderate reduction of 0.25 percentage points in the ECB’s key interest rate in June sends a positive signal to the market.
Types of use: office properties responsible for half of the sales volume
- Sales of office properties dominate the result for the first half of 2024 with EUR 395 million and a turnover share of around 50 per cent. Year-on-year, the share of office investments in the overall result increased by 7 percentage points. Seven sales with a combined volume of around EUR 320 million were registered within this utilisation class in the 2nd quarter alone. The owner-occupier purchase of Hauptwache 1 by Frankfurter Sparkasse from Signa in Frankfurt city centre and the acquisition of the Access Tower by Abaton Real Estate from Preos in Frankfurt-Niederrad contributed to this result.
- Mixed-use properties and land accounted for a total of 32 per cent and 250 million euros respectively. The partial sale of the “Am Opernplatz 2” property from Signa to Capital Land Holding for a group of family offices was one of the reasons for this.
- The industrial and logistics segment contributed around 15 per cent or EUR 115 million to the commercial transaction volume on the Frankfurt market. Their share increased by one percentage point compared to the previous year.
- Hotel properties traded for around EUR 15 million, which corresponds to a share of turnover of around 2 per cent. No sales of retail properties have been recorded in the year to date.
