According to Savills, residential property investment volumes (transactions for at least 50 apartments) in Germany reached almost €3bn during the first half of 2024. The international real estate advisor believes that the market has bottomed out and is already noticing an increase in activity. This is particularly evident from a recent increase in the number of completed transactions, with the number of ongoing sales processes also rising in recent months.
The transaction volumes for the first six months of the year were largely driven by the public sector, which accounted for more than a third of transaction volumes, making it the largest purchaser group. The largest deal was the acquisition of a Vonovia sub-portfolio by Berlin-based residential property company Howoge. This was also by far the largest transaction this year to date.

According to Savills, the prime yield stands at 3.6%, which has now remained unchanged for the last 12 months.
Marco Högl, Director and Head of Residential Capital Markets at Savills Germany, says: “We are seeing numerous potential buyers for well-located new-build quality assets that are not subject to the rental cap. The sweet spot for most investors is finding assets priced at €20m to €30m.”
Outside of the prime sector, the picture is more complex and the future is more difficult to predict.

Karsten Nemecek, Managing Director of Corporate Finance – Valuation at Savills Germany says: “While the re-adjustment of prices to the new interest rate environment in the core market appears to be complete, this is not yet the case for other sectors. This most likely still applies to properties with clear rental growth potential that can be realised during changes of tenant or via rental increases on existing leases. Properties undergoing a manage-to-green strategy also offer significant potential to purchasers whose price expectations match those of vendors.”

Overall, Savills is observing high demand from value-add and opportunistic investors. However, they have such high yield requirements that they can fundamentally only find the right offers from owners who are under pressure to sell – and there are very few of those. “This is exacerbated by the fact that many value-add scenarios no longer stack up due to the sharp increase in building costs and the anticipated impending extension of the rental cap until at least 2028,” says Nemecek.

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Market in Minutes Residential Market Germany