Cushman & Wakefield, one of the world’s largest real estate consultancies, has recorded a turnover of EUR 1.45 billion for the Munich commercial investment market in the first half of 2024. Compared to the previous year, an increase in turnover of 109 per cent was recorded, more than doubling the result. Despite this significant growth, however, current sales are around 21 per cent below the 5-year average.
Jan Isaakson, Head of Capital Markets Munich at Cushman & Wakefield: “Overall, there was a significant increase in interest in property investments in the first half of 2024 compared to the previous year. Even if some transactions still fail due to different price expectations, the proportion of successful exclusivities compared to cancelled transactions has increased noticeably. The background to this development is the perception among buyers that purchase prices have bottomed out.”
Transaction volume: hardly any international capital involved
- At EUR 205 million, the transaction volume in Q2 was 83 per cent below the value of the previous quarter (EUR 1.24 billion) and around 11 per cent above the same quarter of the previous year (EUR 185 million). The increased transaction volume in the first half of the year is largely due to the strong performance in Q1 2024.
- International capital accounted for around 3 per cent of the total volume in the first half of 2024, around 50 basis points below the previous year’s figure. This represents the lowest international transaction volume for 1st half-years on the Munich commercial property market in the past seven years.
- Sales in the core risk class dominated in the first half of the year at 65 per cent. Together, the Core-Plus and Value-Add risk classes accounted for just under 31 per cent of the investment volume in the year to date.
Yields: Stable prime yields for three consecutive quarters
- As in the previous quarter, the prime yield for core office properties is 4.60 per cent. Compared to the same quarter of the previous year, there was an increase of 90 basis points. Only in Munich did the prime rent for core office properties remain stable among the top 7 markets.
- The prime yield for city centre commercial properties also remained constant at 4.10 per cent (+70 basis points compared to Q2/2023).
- The prime yield for logistics properties is currently 4.50 per cent and also remains unchanged compared to the previous quarter.
- Compared to the same quarter of the previous year, this corresponds to an increase of 35 basis points.
Types of use: sales volume for office properties improves year-on-year
- Mixed-use properties achieved the highest share of sales in the first half of 2024 at EUR 1.025 billion (71 per cent). This was largely due to the sale of the mixed-use property “Fünf Höfe” from Union Investment to Athos in the first quarter of 2024. The core types of use of this property are retail and office.
- The transaction volume for office properties totalled EUR 375 million in the first half of 2024. This represents an increase of 42 per cent compared to the first half of 2023, although there was a decline of 90 per cent compared to the 5-year average for the first half of each year.
- In contrast to the previous quarter, in which no transactions involving hotel properties were recorded, hotel properties with a volume of EUR 25 million were traded in Q2 2024, which corresponds to an increase of 150 per cent compared to the same period of the previous year. However, this figure is 92 per cent below the 5-year average for hotel property sales.
- The half-year result for industrial and logistics properties was weak at EUR 10 million and contributed just 1 per cent to the commercial transaction volume on the Munich market at the end of the first half of the year. Compared to the previous year, the share fell by 2 percentage points.
- Retail properties accounted for EUR 10 million in the 1st half of 2024. At the same time last year, the transaction volume for retail properties was EUR 25 million, which corresponds to a decline of 60 per cent.
