Savills expects commercial real estate transaction activity in Germany to increase moderately over the coming months, since more product will be coming to the market. The international real estate advisor anticipates that full year transaction volumes will reach c.€25bn, which would be significantly up on 2023’s €22.6bn.

Q1 2024 transaction volumes were c.€5.2bn, in line with the corresponding quarter last year. The same is true of the number of transactions: Savills recorded around 250 transactions between January and March 2024. Over the last twelve months (April 2023 to March 2024), the most popular sectors in terms of volumes were industrial and logistics (c. €6.4bn), followed by retail (c.€5.6bn) and offices (c.€4.5bn).

The number of sales processes commencing or in preparation has increased across almost all sectors in recent weeks, according to Savills.

Marcus Lemli, CEO Germany and Head of Investment Europe, Savills, says: “All market participants have now come to terms with the fact that the increase in interest rates has structurally changed the real estate market. Having accepted this new reality, owners, banks and investors are now exploring their options.

“The phase of widespread standstill is likely to be behind us, albeit transaction activity is only expected to increase gradually and primarily owing to increasing pressure to sell.”

Matthias Pink, Head of Research Germany for Savills, says: “Yields are likely to have largely adapted to the new interest rate environment, although we believe office yields in particular may see a further (temporary) increase.”

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