Cushman & Wakefield, one of the world's largest real estate consultancies, has analysed developments on the investment markets in Berlin, Düsseldorf, Hamburg, Frankfurt and Munich for the fourth quarter and the full year 2024 and summarised the transaction volumes and yields below.
BERLIN
Over 40% of the transaction volume on the Berlin property investment market is related to SIGNA insolvency
Clemens von Arnim, Head of Capital Markets Berlin at Cushman & Wakefield, comments: ‘In 2024, family offices and opportunistic value-add investors were particularly active on the Berlin investment market. The transaction volume even increased compared to the previous year due to some large distressed sales. Whether more risk-averse investor groups will return to the market in 2025 depends largely on the macroeconomic environment, which will be influenced by geopolitical factors this year in particular.’
Transaction volume: 4th quarter with 970 million euros
Despite the major KaDeWe transaction in the 2nd quarter, the 2024 transaction volume of €3.4 billion is only around half the 10-year average.
The largest office transaction of the year is the 10,500 m² office section in the ‘Neue Bockbrauerei’, which was sold by Bauwert to the state-owned Berliner Bodenfonds GmbH in the 4th quarter.
A transaction volume of EUR 285 million was attributable to logistics and industrial properties and EUR 390 million to hotel properties - 35 per cent of the transaction volume was attributable to the two risk-sensitive investment classes Opportunistic and Value-add. The sale of KaDeWe resulted in a high share of the Core risk class at 42 per cent.
Yields: Stable yields for all types of use
The phase of rising prime yields over the past two years has come to an end for all types of use. The constant to slightly falling long-term bond yields support this development.
At the end of the 4th quarter, the prime yield for office properties stood at 4.80 per cent, for city centre commercial properties at 4.35 per cent and for logistics properties at 4.50 per cent.
DÜSSELDORF
Cushman & Wakefield: Düsseldorf investment market has bottomed out
Simon Jeschioro, Head of Capital Markets & Investment Advisory Germany at Cushman & Wakefield, comments: ‘With transaction momentum already on the rise, there is growing confidence that the market will pick up more strongly in 2025, supported above all by improved conditions on the financial markets. In view of the now attractive yield levels for core properties, institutional investors will also invest more again.’
Transaction volume: more transactions than a year earlier
- The commercial investment market in Düsseldorf and the extended logistics market area achieved a transaction volume of EUR 1.1 billion in 2024 as a whole. Compared to the previous year, this corresponds to a strong increase in turnover of 65%. Around EUR 325 million was realised in the 4th quarter.
- The market benefited from increased transaction momentum with a total of 46 registered sales (previous year: 33). At the same time, there were also more transactions in the three-digit million euro range. The largest sale of the year is the 83-hectare Vallourec site from the 4th quarter. CTP acquired the site for 155 million euros in order to construct a modern business park here over the next few years.
- The volume of office transactions increased again and totalled €255 million in 2024, an increase of 34% compared to the previous year. The share of the total transaction volume is 23 per cent. Retail and logistics industrial properties accounted for 14 and 19 per cent respectively.
Yields: Stability in prime yields in the 4th quarter as well
- Following a slight increase in prime office yields in the 2nd quarter (+10 basis points), the past year was characterised by stability in the key office, retail and logistics usage types.
- The prime yield for core office properties currently stands at 5.10 per cent (+10 basis points compared to the previous year); for logistics properties at 4.50 per cent (+0 basis points) and for commercial properties at 4.45 per cent (+0 basis points).
FRANKFURT
Slight recovery on Frankfurt's commercial property market gives rise to optimism for 2025
Michael Fleck, Head of Capital Markets Frankfurt and Central Region at Cushman & Wakefield, comments: ‘The end-of-year results for 2024 on the Frankfurt commercial property market show promising momentum for the upcoming year 2025. Office properties were able to regain sales shares compared to the previous year and prime yields suggest a stable development. They show that the price expectations of buyers and sellers have converged.’
Transaction volume: Investment turnover more than doubled compared to the previous year
- A transaction volume of around €1.88 billion was achieved on the Frankfurt commercial investment market in 2024. This exceeds the previous year's result by 123 per cent. However, the 5- and 10-year averages were missed by around two thirds. The sales result for the 4th quarter amounts to EUR 535 million and is 5 per cent below the previous quarter (EUR 565 million).
- Office properties accounted for 53 per cent of transactions in 2024 with around EUR 985 million. In addition to four other transactions, the sale of the ‘Options’ in Frankfurt's Europaviertel helped to generate a volume of around EUR 305 million from office properties in the 4th quarter, which corresponds to 57 per cent of the quarterly result.
Yield: recovery in prime yields for office and logistics properties forecast for 2025
- From December 2023 to December 2024, the prime office yield for core properties in Frankfurt rose by 20 basis points to currently 4.90 per cent.
- The prime yield for city centre commercial properties remained stable year-on-year and stood at 4.55% at the end of 2024. The prime yield for logistics properties was 4.50 per cent and also remained unchanged compared to the previous year.
- Cushman & Wakefield expects prime yields for the office and logistics asset classes to fall slightly over the course of 2025.
HAMBURG
Cushman & Wakefield: Hamburg property investment market on the upswing, but with room for improvement
Simon Jeschioro, Head of Capital Markets & Investment Advisory Germany at Cushman & Wakefield, comments: ‘The Hamburg property investment market is showing signs of a turnaround. We saw several major deals again in the last quarter of 2024 and, as expected, prime yields have remained stable after a long phase of rising yields. For 2025, we expect the upward trend to continue and prime yields for office and logistics properties to fall minimally.’
Transaction volume: major deals support upward trend
- A transaction volume of around €1.49 billion was achieved on the Hamburg commercial investment market in 2024. Although this exceeded the previous year's weak result of €1.21 billion by 24%, the result is 59% below the 5-year average of around €3.59 billion.
- While investment activity in the first half of the year focussed primarily on the small to medium purchase price category below EUR 50 million, four major transactions with a volume of more than EUR 100 million each were concluded in the second half of the year. One of these was the sale of the HCOB headquarters on Gerhart-Hauptmann-Platz from the Signa insolvency estate to the City of Hamburg for its own use for around €112.5 million in the fourth quarter.
- Office properties are the asset class with the highest turnover in 2024 as a whole (€785 million, 53 per cent). Logistics and industrial properties rank second (EUR 295 million, 20 per cent).
Yields: Prime yields stable - trend reversal expected in 2025
- Prime yields for first-class office and logistics properties as well as commercial properties in prime locations remained stable in the 4th quarter of 2024 compared to the previous quarter. Year-on-year, there were slight increases for office properties (4.90 per cent, +15 basis points), while yields for logistics properties and commercial buildings remained unchanged at 4.50 per cent.
- Cushman & Wakefield expects prime yields for first-class office and logistics properties to fall slightly again in 2025 for the first time since the beginning of 2021.
MUNICH
Cushman & Wakefield: Transaction volume on the Munich property investment market rose sharply in 2024
Simon Jeschioro, Head of Capital Markets & Investment Advisory Germany at Cushman & Wakefield, comments: ‘The confidence of market players in the Munich investment market is increasing.This can be seen from the high transaction result.As one of the strongest business locations in Germany, Munich remains in the focus of investors. This is all the more true for institutional and international investors, who are exploring good investment opportunities at the start of a new investment cycle.’
Transaction volume: growth through major transactions
- A transaction volume of €2.25 billion was achieved in the Munich commercial investment market in 2024. This corresponds to an almost doubling (+90 per cent) compared to the same period of the previous year. However, the 4th quarter only accounted for €205 million - together with the 2nd quarter, the weakest of the year.
- At around 500 million euros (22 per cent), the retail property usage type is just ahead of office properties (20 per cent).Due to a number of high-priced transactions involving mixed-use properties, almost half of the transaction volume was attributable to the ‘Other’ category.
- In the year as a whole, three transactions over 100 million euros were registered - but none in the fourth quarter.Prime yields stable - trend reversal expected in 2025
- Prime yields for first-class office and logistics properties as well as commercial properties in prime locations remained stable in the 4th quarter of 2024 compared to the previous quarter.Year-on-year, there were slight increases for office properties (4.90 per cent, +15 basis points), while yields for logistics properties and commercial buildings remained unchanged at 4.50 per cent.
The three major transactions above the €100 million mark are the main reason for this.
Yields: Further stability in prime yields
- The level of prime yields in Munich is the lowest among the top 7 German markets. Prime yields for office, logistics and commercial property have been stable since the end of last year. The outlook for the future is also stable.
- The prime yield for office properties is 4.60 per cent, for logistics properties it is currently 4.50 per cent and for commercial properties 4.10 per cent.
