OFFICE REMAINS BY FAR THE STRONGEST ASSET CLASS
Office properties continue to be the strongest asset class on the German commercial real estate market. In the first half of the year, around €13.1 billion was placed in this segment, bringing its market share to a good 43%. A new record was thus set, for which the record start to the year with almost €9.8 billion was primarily responsible. Since the outbreak of the Ukraine war, transaction activity has slowed down considerably (Q2: €3.3 billion), which is mainly due to the noticeable change in financing conditions within a very short period of time, as investors' confidence in the office product in Germany is a given. The very high investment volume of the past two years shows this impressively, confirmed once again by the recent positive development on the occupier markets. It is the financing environment that is causing less market momentum: while the reality of those willing to buy is completely new, the price expectations of sellers, particularly in the core segment, are still at the historically high level of the beginning of 2022. This gap must be closed. Experience from previous crises suggests that this finding phase could very likely take several months before the market fully picks up again.