LITTLE MOMENTUM IN OFFICE INVESTMENTS: TURNOVER IN Q1 WELL BELOW AVERAGE
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Office investments in Germany totalled just €871 million in the first quarter of 2024. This was around 31% below the result from the same period of the previous year. In a long-term comparison, this is one of the weakest Q1 results. The 10-year average is €4.5 billion.
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In contrast to the retail and logistics segments, there was no year-on-year increase in investment turnover in the office segment, resulting in a market share of just 16%. The office asset class ranks a distant third behind retail and logistics, which recorded investment turnover of €2 billion and a good €1.4 billion respectively in the first quarter.
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Individual transactions currently dominate the market. Portfolio sales have made a negligible contribution to the result in the office segment.
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At the beginning of 2024, there is still considerable uncertainty regarding the further development of the office markets. This is due, on the one hand, to the protracted process of the pricing phase and, on the other, to the weak performance of the occupier markets, which is largely attributable to the persistently difficult economic situation.
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Following a period of continuous growth since mid-2022, driven by elevated interest rates, yields have stabilised in the first quarter of 2024, in line with expectations. For offices, they average 4.36% in the A-locations. Munich remains the most expensive location with a prime yield of 4.20%, followed by Berlin and Hamburg with 4.25% each.