Cushman & Wakefield recorded a transaction volume of EUR 3.51 billion in the German residential property market for the fourth quarter of 2024.
This reflects increased investor interest, resulting in an 81 per cent rise compared to the previous year’s figure. Consequently, 2024 concludes with a total transaction volume of EUR 9.25 billion, 45 per cent above the previous year's figure (2023: EUR 6.39 billion).
Jan-Bastian Knod, Head of Residential Investment Germany at Cushman & Wakefield, comments: ‘The significantly increaseased transaction volume clearly indicates a stabilisation of the market. Investors view the current market conditions as an ideal entry point.’
Focus on portfolio transactions, Strong Performance in Single Asset Deals
In the fourth quarter, portfolio transactions amounted to EUR 2.12 billion, accounting for 60.4 per cent of the total transaction volume for the quarter. 39.6 per cent was accounted for single asset transactions, a large share attributed to the Konnekt project. Laborgh Investment and Kondor Wessels are constructing 1,700 residential units for the Howoge housing association.
Large-scale transactions in 2024
The 2024 transaction market was predominantly shaped by large-scale deals, such as in the third quarter with the sale of 7,800 residential units from the Uniimmo:Wohnen ZBI Fund, as well as the ZAR Real Estate / Net Zero Properties S.A. transaction to a Luxembourg-based subsidiary of ZAR Real Estate. Additionally, Howoge acquired a large local residential portfolio in Berlin for EUR 700 million.
Furthermore, Vonovia completed several large transactions, including the sale of property project developments to HIH Invest for EUR 650 million in Q3. In addition, further project developments were sold to HIH Invest for EUR 516 million in Q4 2024.
Peach Property sold 89.9 per cent of its shares in a EUR 448 million portfolio to Globe Trade Centre (GTC) in Q4 2024. The transaction comprised 5,165 residential units with a rental space of 324,000 m².
National investors acquired residential properties worth EUR 6.72 billion in 2024, maintaining their position as the dominant buyer group with 64 per cent. However, international capital is becoming increasingly active in the German residential market, accounting for EUR 1.26 billion in Q4 2024, or approximately 36 per cent.
Price stabilisation largely completed
The prime yield continues to be stable at 3.90 per cent. Cushman & Wakefield anticipates that the prime yield will fall slightly in 2025.
Low activity in student residences and micro-living
Despite strong investment demand for student housing and micro-living, transaction activity remained low in 2024 due a shortage of available products. However, the percentage increase compared to the previous year is significant, rising by around 50 per cent to EUR 183 million (2023: EUR 122 million).
Jan-Bastian Knod concludes: ‘Based on the positive developments in 2024, we expect the recovery of the residential property investment market to continue, and that we anticipate increased transaction activity in 2025.’
