BOTTOM REACHED: OFFICE INVESTMENT MARKETS AT A TURNING POINT
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In 2024, a good €5.2 billion was invested in office properties across Germany. Compared to the previous year's already weak result, this represents a further decline of almost 13%. At just 20%, the extremely low share of the total commercial transaction volume is also the lowest figure ever recorded. The office markets are therefore likely to have bottomed out and will participate more strongly in the overall improvement in investor sentiment than in previous years.
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In general, it has been confirmed that office properties were by far the most affected by the difficult economic environment and higher interest rates. In addition, there was a certain amount of uncertainty regarding the future development of working from home. However, the latest figures clearly show that the trend is moving back to the office. This will also stimulate investment turnover.
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In the current environment, major deals have so far only been made in exceptional cases. One indication of this is that only seven deals in the three-digit million range were recorded in 2024. It is also worth noting that foreign investors, who are traditionally an important investor group for large properties in particular, have only accounted for 16% of result. This is also a comparatively low figure.
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Prime yields stabilized in the final quarter, so that they are at the same level as before in all major locations. The average net prime yield for offices in the A-locations is therefore 4.36%. Munich remains the most expensive location at 4.20%, followed by Berlin and Hamburg at 4.25%.