RECOVERY OF THE RESIDENTIAL INVESTMENT MARKET
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After a weak first quarter, investment activity on the German residential investment market picked up significantly in the second quarter of 2024 and continued in the third quarter. Across Germany, €5.9 billion has been invested in larger residential portfolios (30 residential units or more) in the year to date. Although this was 51% below the long-term average, the previous year's result was exceeded by 50% and the total volume of 2023 was already achieved by the third quarter. In addition, residential development sites worth over half a billion euros were sold.
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On a positive note, the first major value-add deals were once again concluded. An increased number of registered large-volume core deals proves that a marketable price structure has emerged following the uncertainties of the past quarters.
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The solid investment environment of A-cities continues to be in high demand. The A-cities are responsible for an above-average share of around 55% of the investment volume (Ø10 years: 48%). The German capital in particular made a strong statement with the highest share of turnover ever measured (39%) and an investment volume of €2.3 billion. Berlin alone accounted for five major deals worth over €100 million in the core/core-plus segment. Benchmark transactions such as these underline the high level of investor interest in Berlin and the good medium and long-term prospects for the German residential property markets. However, there has also been an increase in purchasing activity outside the A-cities, such as in Leipzig and Dresden, with investment volumes of just under €200 million each.