The German office investment market showed positive development in the first three quarters of 2026. The transaction volume amounted to 4.6 billion euros, which corresponds to an increase of 14 per cent compared to the same period last year. This recovery was significantly driven by large-volume single transactions. Demand continued to focus on selected markets and high-quality properties. Within the German commercial real estate investment market, office properties positioned themselves as the second strongest asset class, just behind industrial and logistics properties. These findings are based on a current analysis by CBRE.
Marcus Lemli, Head of Capital Markets at CBRE in Germany, noted that larger investments are increasingly being made again in the office segment. He emphasised that reliable rental income and a convincing future outlook for the respective property are crucial for investment readiness. The increased activity is closely linked to the quality of the properties on offer and a viable purchase price. The number of registered transactions rose slightly compared to the same period last year. In addition, ten deals above the 100 million euro mark were recorded, compared to six in the same period last year. The average transaction size reached just under 27 million euros.
Single properties continued to dominate market activity, although their share was slightly down compared to the previous year. While portfolio transactions showed significant volume growth, they remained below the ten per cent mark of the total volume. With regard to risk categories, core-plus investments gained importance, while core and value-add products were traded to a lesser extent. Domestic investors increased their presence and shaped the office investment market more significantly than in the previous year. Dr. Jan Linsin, Head of Research at CBRE in Germany, explained that the development in core-plus shows that investors are specifically looking for additional value potential. Property selection remains challenging, and given a subdued economy and high financing costs, a careful consideration of yield prospects and investment needs is essential.
Regional Developments and Yields
Within the major office investment markets, Munich showed particularly dynamic development. The transaction volume of the Bavarian capital doubled compared to the same period last year, identifying Munich as the most important growth driver. Düsseldorf also recorded a significant increase with a plus of 65 per cent. Berlin and Cologne, however, lagged with volumes that were 49 and 58 per cent below the previous year's figures, respectively. These regional differences illustrate the impact of individual large deals on the respective location results. Outside the top 7 markets, the transaction volume increased by 59 per cent compared to the previous year, with these regional markets accounting for almost a third of the nationwide office investment volume and broadening the regional basis of transaction activity.
Mr Lemli noted that in addition to the established core markets, regional locations also offer targeted investment opportunities. The local leasing situation, the long-term usability of the building and the price level are decisive for evaluating such opportunities. Prime yields for office properties in the top locations remained stable in the third quarter, averaging 4.73 per cent. In contrast, yield increases were already observed in B-locations and regional centres. The increased interest rate level also raises adjustment pressure in the major office markets, as higher long-term financing costs complicate the calculation of acquisitions. At the same time, increased yields from fixed-income investments mean that real estate investments are being considered more strongly in comparison to alternative investment options.
Sandro Höselbarth, Head of Valuation & Advisory Services at CBRE in Germany, predicted that the stability of prime yields in top locations would increasingly be influenced by higher capital market interest rates. He expects upward pressure on prime yields in the coming quarters should financing costs and bond yields remain elevated. For the coming months, large-volume transactions, in particular, offer further potential for market activity, with demand likely to concentrate on high-quality office properties in attractive locations. Financing conditions and the convergence of price expectations between buyers and sellers remain essential prerequisites for additional deals. A gradual economic recovery driven by fiscal packages and government spending is expected, although its effects are likely to impact real estate markets only with a time lag. For the full year, an office investment transaction volume of over five billion euros is considered realistic.
