The German investment market withstood the crisis over the last year better than many would have thought possible in spring 2020. Although the number of transactions fell significantly (just under 1,900 individual and portfolio transactions in 2020 compared with 2,300 in 2019), the decline in investment volume was relatively moderate at approximately 20%, particularly in view of the fact that 2019 produced a record volume. Ultimately, the crisis year of 2020 witnessed even higher investment in German commercial property than the boom year of 2007. This robust result illustrates that Germany was not only able to confirm its role as a safe haven for investment in Europe but even consolidated this status. Germany accounted for 30% of the overall transaction volume in Europe last year, which is an unprecedented market share.

Investment activity in the opening quarter of 2021 was subdued, although an upturn is expected in the second half of the year. Germany's status as a safe haven in the European real estate investment market is likely to remain unchanged over the coming years. Solid fundamentals are the basis for investor confidence. The fact that investors are under strong pressure to invest in an era of sustained low interest rates also suggests that demand for real estate will remain high (see also “Inflation and yields: what does rising inflation mean for the prime office yield in Germany?”). Nevertheless, there will be structural shifts in investment objectives, which have already been apparent over the last year. Investors are particularly focusing on property sectors that promise long-term secure cash flow. Hence, the health care and logistics sectors witnessed significant growth last year both in absolute and relative terms. In the “traditional” sectors, offices and retail, investors must keep track of trends in the occupier markets. The structural change, accelerated by the Covid-19 pandemic, offers both opportunities and risks in this regard, which is why the strategies and appraisals of investors are becoming increasingly differentiated. Consequently, depending on opinions of the state, there will be more owners willing to sell going forward but also a continued abundance of players willing to make acquisitions and hence a high level of transaction activity. The transformation in the investment markets is, therefore, already in full progress.