German commercial real estate transaction volumes for the year to date have reached approximately €16.4bn according to Savills, which is in line with the corresponding period last year.

There have been no changes to prime yields, with the exception of shopping centres, which Savills raised by 10 basis points compared with the previous quarter, Equity investors including private investors (and family offices) continue to dominate the market, particularly for core product.

Marcus Lemli, CEO Germany and Head of Investment Europe, says: “The investment market appears to have bottomed out and, looking ahead, we are cautiously optimistic that it will gradually become more active again. Pricing expectations of potential buyers and sellers are more in line with each other compared to the beginning of the year. The reversal in interest rate policy should contribute towards bringing them even closer together. This is likely to facilitate more transactions.”

Offices have accounted for just 21% of overall transaction volumes for the year to date, ranking third behind retail (26%) and industrial/logistics (24%). This compares against a 10-year average of 43% prior to the reversal in interest rate policy.

Matthias Pink, Head of Research Germany for Savills, says: “Offices remain in demand in the leasing market. Despite the rising vacancies and weak economy, rent levels for high-quality offices have been rising and the impending slump in new build product could cause the shortage to further intensity over the coming years.”

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Market in Minutes: Investment Market Germany