Germany Investment Market Top 7 Locations Q1 2026

Overview

 

The seven most important an largest real estate markets in Germany account for the majority of the investment transaction volume. As the top 7 locations Berlin, Düsseldorf, Frankfurt am Main, Hamburg, Cologne, Munich and Stuttgart are analyzed in this report with regard to current market developments. 

 

 

Berlin

 

• The Berlin real estate investment market started the new year cautiously but continues to show resilience in a national comparison; transaction volume in the first quarter amounted to €851m, down 34% year-on-year
• Office properties, with around €206m, were once again the largest asset class by volume – however, the result was 61% below the previous year’s level and was largely driven by a single transaction; in particular, properties in peripheral locations facing potential vacancy are finding few buyers due to a lack of viable alternative use concepts
• Retail properties recorded a significant increase, reaching a transaction volume of €156m (+55% year-on-year), driven primarily by the sale of a larger grocery-anchored portfolio; healthcare real estate also saw growth of 25% to €122m, largely due to the sale of a pan-European portfolio by Northwest Healthcare Properties REIT to TPG, which also included several assets in Berlin
• Prime office yield in Berlin remained unchanged quarter-on-quarter at 4.6%; prime yields in city fringe and peripheral locations were also stable compared with Q4 2025, although non-central office locations continue to face structural pressure
• For the remainder of 2026, the Berlin investment market offers a broad pipeline of available products; however, transactions continue to be delayed by financing constraints, particularly in the office sector – a noticeable market recovery is expected once financing conditions become more liquid and predictable, especially for large-scale transactions

 

 

Düsseldorf

 

• The Düsseldorf investment market (City of Düsseldorf, Ratingen, Hilden, Erkrath, and Neuss) recorded an investment volume of €417m in Q1 2026, representing an  increase of 309% year-on-year, a strong recovery in purely numerical terms, which, however, was largely driven by the large-scale single transaction of the mixed-use property Deiker Höfe and does not reflect the general market sentiment
• As a result of this transaction, the average deal size increased from €11m in Q1 2025 to currently €28m, even though the total number of transactions also increased; large-scale deals above €50m dominated market activity and accounted for around three quarters of total volume, while transactions in the mid-sized segment lost relevance
• Market activity was strongly concentrated in the North submarket, alongside transactions in the City, the CBD, and isolated deals in left-bank locations; residential and office properties together accounted for around three quarters of total volume
• While classic core products remained in demand, value-add transactions declined: investors are showing slightly increased risk appetite again but remain clearly yield-focused
• On the buyer side, closed-end real estate funds, private investors and family offices as well as corporates, were the key drivers of market activity; domestic investors accounted for the majority of transaction volume
• Net initial yields across all asset classes remained stable compared with year-end 2025 and thus continued to stand at 4.9% for prime office buildings in the CBD, 5.5% in city fringe locations, and 6.25% in peripheral locations; while prime yields are expected to remain broadly stable in 2026, total returns will be driven by further rental growth

 

 

Frankfurt

 

• In the Frankfurt real estate investment market (including Eschborn and Offenbach/Kaiserlei), a total of €251m was invested in Q1 2026, representing an increase of +218% year-on-year, of which €235m was attributable to commercial properties
• The quarter was largely shaped by two large-scale office transactions in the Banking District: the acquisition of Fifty Avons at Mainzer Landstraße by DZ Bank, and the sale of the Overture property at Junghofstraße with a long-term lease to Commerzbank; thus office properties accounted for the largest share of total volume at approximately €207m
• Against the backdrop of geopolitical and economic uncertainties, Frankfurt benefits from its position as a safe and established investment location, the investment volume was primarily driven by European as well as Anglo-American capital, with many market participants again placing greater emphasis on the security aspect and the safe-haven argument gaining importance, resulting in initially stable prime yields of 4.9% in CBD locations, 5.5% in fringe city locations, and 6.55% in peripheral submarkets
• While classic core transactions in 2025 partially failed due to divergent price and yield expectations, a convergence of these views is expected in 2026, which should lead to increasing transaction activity
• In 2026, investor focus will continue to be on properties with active asset management and repositioning potential, supported by ongoing demand for high-quality space in the leasing market and the resulting rental growth potential for these value-add products

 

 

Hamburg

 

• With a transaction volume of €581m, the Hamburg investment market recorded a significant increase of 17% at the start of 2026 compared to the previous year; the focus shifted significantly in favor of the residential asset class, which dominated market activity with a share of 51%, while commercial investment volume fell by 39% to €286m due to selective buyer restraint

• Market activity was primarily characterized by the mid-sized segment between €20m and €50m, which accounted for around 40% of the transaction volume; this picture was supplemented by a multitude of smaller deals, where private and semi-institutional investors in particular supported market activity, thereby compensating for the temporary absence of large-scale institutional transactions

• After the previous year was characterized by isolated large-volume public sector transactions, their absence led to a significant shift in the buyer structure; the share of foreign investors rose markedly from 4% to 22%, which illustrates the revived confidence of international capital sources which are taking advantage of current price levels for strategic engagements in the Hamburg market

• The well-filled pipeline is concentrated on high-quality inner-city locations, with private investors continuing to prefer first-class assets; at the same time, appropriately priced conversion properties in the commercial residential sector are increasingly moving into the focus of opportunistic players due to robust fundamental data

• While the prime office yield in the CBD compressed slightly to 4.7% year-on-year, the spread to secondary locations continued to widen; prime yields in city fringe locations rose to 5.5% and in the periphery to 6.8%, underlining the increasing polarization between core products in prime locations and higher-risk assets in fringe areas

 

 

Munich

 

• Munich’s real estate investment market continues to attract strong attention from all major global capital sources, albeit with extremely selective investor demand; the focus remains on sustainable, high-quality products, preferably from the office segment, particularly in attractive, well-connected inner-city locations with high ESG standards
• Transaction volume in the first quarter totalled €686m, of which almost two thirds was attributable to office properties; market activity was largely driven by a small number of high-volume transactions, such as the sale of the Alte Akademie or acquisitions by Stadtwerke München; in addition, there were notable deals in other segments, including the hotel sector, where, for example, the Hotel Excelsior on Schützenstraße within the Central Quartier was sold
• The strongest buyer group in the first quarter was private investors and family offices, which accounted for one third of total volume due to the environment-driven restraint of institutional investors and the resulting “window of opportunity”; the share of international investors was only 19%, which can be attributed in part to higher return requirements from international capital sources that are currently difficult to realise in the local market, particularly in the highly sought-after core segment
• Many owners of office properties that are no longer marketable are considering potential conversion to residential use; while this is partly difficult due to restrictions under planning law, the city council has recently shown greater openness towards changes of use
• Prime office yields remained stable for the time being at 4.4%, unchanged from the previous quarter; further development in the investment market, and also with regard to yields, is currently difficult to forecast given the strained overall economic environment and uncertain future interest rate developments

 

 

Cologne

 

• The Cologne investment market recorded a transaction volume of just under €177m in the first quarter of 2026 and thus fell short of the quarterly average for the past five years by 17%, but still achieved a 35% stronger start to the year than in the previous year

   

• So far, the investment volume was entirely attributable to commercial real estate, among which office (62%) once again emerged as the clearly dominant asset class – the sales of the Lindenthal district town hall and Cube12 in the City submarket played a significant role in this

   

• While large-volume transactions remained absent across all asset classes, the increase in recorded transactions in general and in deals in the small- and mid-sized segment in particular led to a decline in the average deal size to €16.1m; investors made only selective investments in single assets, focusing on core plus and opportunistic risk strategies

   

• On the buyer side, private investors and real estate companies accounted for the largest share of transaction volume and were also the most important net buyers alongside corporates; by contrast, the group of open-ended real estate and special funds, which had led the market the previous year, emerged as the most significant sellers as part of strategic funding measures

   

• At 47%, foreign buyers once again constituted a notably high share of the typically local-driven Cologne investment market – evidence of the city’s growing appeal to international investors, who primarily originate from other European countries

   

• The location’s appeal was reflected in a slight compression of prime yields for office properties at the start of the year, which now stand at 4.7%; stable values were seen for logistics properties at 4.4%, and high street properties at 4.75% 

 

 

Stuttgart

 

• Despite continued stable conditions in the occupier markets, Stuttgart’s investment market remains in a predominantly wait-and-see mode; the low transaction volume of €44m in the first quarter, down 18% compared with the prior-year quarter, reflects the cautious investment behavior of investors, who also continue to act extremely selectively with regard to location and product quality
• In line with the general trend across German investment markets, transaction activity focused on sustainably let core and core-plus properties in established city and city fringe locations, preferably from the office and mixed-use segments; this included, for example, the sale of the property at Lange Straße 9 to a family office of per invest
• Value-add investments also continue to be highly sought-after by investors, as illustrated by the sale of the property at Hasenbergstraße in Stuttgart-Rotebühl, which was sold together with four other properties in southern Germany to Watzl Group; among other factors, this increased the portfolio share of total volume to 21%, whereas no portfolio transactions were recorded in the prior-year period
• The most active buyer group in the first quarter was special funds, which accounted for 54% of investment volume, primarily through the acquisition of an office and administrative building near Stuttgart’s Europaviertel by IMAXXAM; in addition, around one fourth of the volume was attributable to equity-strong private investors and family offices, which, unlike institutional investors, are often decoupled from the currently challenging financing environment
• Net initial yields for prime properties in Stuttgart’s top office locations remained stable at 4.9% compared with the previous quarter; over the coming months, despite continued subdued economic forecasts, a gradual revival of the investment market and a successive expansion of the product offering can be expected