Cushman & Wakefield, a global real estate consultancy, has analysed developments in the first quarter of 2025 on the investment markets in Berlin, Düsseldorf, Hamburg, Frankfurt and Munich and summarised the transaction volumes and yields below.
BERLIN
Positive start to 2025 on the Berlin property investment market
Clemens von Arnim, Head of Capital Markets Berlin at Cushman & Wakefield, comments: "The Upper West is making a significant contribution to the fact that 2025 is starting with a relatively high transaction volume of €1.08 billion. But even apart from this prominent transaction, the market is more lively at the start of the year than in 2024 and 2023. While family offices dominate the buyer pool, some institutional investors are now showing renewed interest in core investments up to €50 million, making us cautiously optimistic for 2025."
Transaction volume: increase compared to previous quarter and previous year
- The commercial transaction volume in Q1 2025 was €1.08 billion, 11 per cent above the figure from Q4 2024 and 105 per cent above the previous year's result. Compared to the 5-year average, however, the volume was 25 per cent lower.
- By far the largest transaction and also the largest office transaction was the Upper West, which the Schoeller Group bought from Signa for a purchase price of around EUR 450 million.
The volume for office properties totalled €630 million and was therefore already almost on a par with the entire year 2024 (€735 million) in the first quarter of 2025. - A transaction volume of €125 million was attributable to logistics and industrial properties and €65 million to retail properties.
- Core properties accounted for 53 per cent of the transaction volume, largely influenced by the Upper West. The value-add and opportunistic risk classes followed with 22 per cent and 18 per cent respectively.
Yields: Prime yields unchanged for all types of use
- Prime yields for all commercial property types in Berlin have remained unchanged for around a year. They stand at 4.80 per cent for office properties, 4.35 per cent for city centre commercial properties and 4.50 per cent for logistics properties.
- There is a lack of core transactions in many asset classes for evidence-based validation of the prime yield. Properties such as the Upper West do not have a representative yield due to their particular history.
DÜSSELDORF
Cautious start to the year on the Düsseldorf investment market
Simon Jeschioro, Head of Capital Markets & Investment Advisory Germany at Cushman & Wakefield, comments: "The persistently stable and attractive yield level of core products is likely to prompt institutional investors to explore the Düsseldorf market more intensively for suitable investment opportunities. In contrast, the marketing prospects for value-add office properties outside the city centre and established office locations remain challenging. Price discounts continue to be observed in this segment."
Transaction volume: No office transactions in the 1st quarter
- A transaction volume of €180 million was achieved on the commercial investment market in Düsseldorf and the extended logistics market area in the 1st quarter of 2025. Compared to the same quarter of the previous year, this corresponds to a decline of 31 per cent. The 5-year average was undercut by 69 per cent.
- No office transactions were registered in the 1st quarter. Logistics and industrial properties accounted for more than half of the volume at 53 per cent or 95 million euros. The sale and leaseback transaction of the ‘SMS Campus’ in Mönchengladbach to Sirius Real Estate for around €17 million contributed to this, for example.
- The second strongest asset class was properties in the other asset class with a share of 42 per cent. Retail and hotel properties each accounted for 3 per cent.
Yields: Prime yields stable compared to the previous year
- 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).
- Slight reductions in prime yields are conceivable for the remainder of the year. However, due to the high volatility, fuelled by the overall economic situation in the area of tension between the German debt package, US tariffs and a weak economy, the outlook is subject to a high degree of uncertainty.
FRANKFURT
Cautious 1st quarter on the Frankfurt commercial property investment market - office properties in third place among asset classes
Michael Fleck, Head of Capital Markets Frankfurt and Central Region at Cushman & Wakefield, comments: ‘Logistics and mixed-use properties with an office focus below the €100 million threshold remained in particular demand in Q1 2025. Even though there are stable transactions in the core segment in some cases, renewed interest rate hikes due to the announced debt package are further exacerbating institutional investors' reluctance. Rising financing costs are also influencing yield expectations."
Transaction volume: logistics properties dominated the market in the 1st quarter
A transaction volume of around €225 million was achieved on the commercial property investment market in Frankfurt in the first quarter of 2025. This exceeded the previous year's result by 5 per cent. However, the 5-year and 10-year averages were missed by around 79% and 77% respectively.
- With a share of 58 per cent (130 million euros), sales in the logistics & industry asset class made the largest contribution to the commercial investment volume. The main driver was the purchase of a 38,000 m² logistics facility in Raunheim, near Frankfurt Airport, by Hines.
- Other properties, including land and mixed-use buildings, accounted for the second-largest share of the quarterly result at around 22 per cent (EUR 50 million). In addition to other transactions, the ‘Rahmhof’ office and commercial building in Frankfurt city centre was sold to project developer Cilon with the aim of repositioning the property in line with ESG criteria.
- Office properties accounted for 16 per cent of transactions in the first quarter of 2025 with around €35 million.
Yield: No change in prime yields at the start of the year
- At the end of the 1st quarter of 2025, prime yields in Frankfurt were at the same level as the previous quarter across all asset classes.-
- The prime office yield for core properties in Frankfurt increased by 20 basis points compared to the same quarter of the previous year to currently 4.90 per cent. The prime yield for city centre commercial properties also remained stable year-on-year and stood at 4.55% at the end of March 2025. The prime yield for logistics properties was 4.50 per cent and also remained unchanged compared to the previous year.
- For the remainder of the year, C&W expects yields to remain stable for the time being and only anticipates a possible downward trend towards the end of the year. The expectation that yields will fall in the near future has been curbed for the time being by the renewed rise in bond yields.
HAMBURG
Property investment market in Hamburg with positive result and outlook
Simon Jeschioro, Head of Capital Markets & Investment Advisory Germany at Cushman & Wakefield, comments: ‘The debt package that was passed has led to a significant increase in bond yields and has noticeably clouded the financing environment. These changed conditions are initially having a stabilising effect on the current high yield level. Nevertheless, the slow upward trend on the investment market in Hamburg is likely to continue, favoured by imminent major transactions and an expected growing willingness to sell as a result of increasing refinancing pressure.’
Transaction volume: Transaction volume at the level of the 5-year average
- A transaction volume of around €890 million was achieved on the commercial property investment market in Hamburg in the first quarter of 2025. This more than doubled the previous year's weak result of €390 million and more or less equalled the 5-year average for first quarters.
- The biggest driver was the buyback of 13 former municipal care facilities by the City of Hamburg as part of a share deal. The seller was Deutsche Wohnen.
- The change of ownership of these healthcare properties made the main use type Other the strongest asset class in the first quarter with a share of 49 per cent (EUR 435 million). While office properties (EUR 55 million) lost around 23 percentage points compared to the previous year, ‘other properties’ gained 26 percentage points. Logistics and industrial properties were the second strongest asset class in the quarter under review, accounting for 235 million euros or 26 per cent of the total transaction volume.
Yields: Prime yields move sideways - trend reversal delayed
- Prime yields remained stable in the 1st quarter of 2025 compared to the previous quarter. Year-on-year, there was a slight increase for office properties (4.90 per cent, +15 basis points), while yields for logistics properties and commercial properties remained unchanged at 4.50 per cent.
- Cushman & Wakefield does not expect prime yields to fall slightly until the end of the year at the earliest.
MUNICH
Munich property investment market gets off to a solid start in 2025
Prof. Dr Gunnar Gombert, Strategic Advisor Capital Markets Munich at Cushman & Wakefield, comments: ‘ Having already noticed growing confidence among investors at the end of the year, we are currently seeing numerous marketing activities. This will lead to more transactions in the second half of the year. Nevertheless, the market remains challenging, particularly due to more difficult financing conditions as a result of higher bond yields. Despite this, the market’s bottom appears to be in sight, and institutional investors are becoming more active again, with international investors increasingly focusing on Munich.”
Transaction volume: major transactions again
- A transaction volume of €380 million was achieved on the commercial property investment market in Munich in the first quarter of 2025. This is around 70 per cent below the exceptionally strong prior-year quarter, which was dominated by the sale of the Fünf Höfe. Compared to the previous quarter Q4 2024 (€205 million), there was an increase of 85 per cent.
- The ‘Office’ usage type accounted for 53 per cent of the transaction volume. The ‘other’ category includes a mixed-use property and land and accounts for 37% of the total transaction volume.
- Two transactions worth €100 million or more were registered in the Q1 2025 reporting quarter - compared to none in the previous quarter. The majority of the transaction volume (60 per cent) was attributable to national investors. Core transactions account for 62 per cent of the transaction volume.
Yields: Further stability in prime yields
- The level of prime yields in Munich remains the lowest among the top 7 German markets. Prime yields for office, logistics and commercial properties have remained stable since the end of 2023. The prime yield for office properties at the end of Q1 2025 is 4.60 per cent, while logistics properties are currently achieving 4.50 per cent and commercial properties 4.10 per cent.
- The outlook for prime yields for the remainder of the year is initially stable and may fall slightly towards the end of the year. However, volatility and uncertainty remain high amid the mix of a weak economy, US tariffs and the new debt package.
