The investment market in Frankfurt am Main recorded a transaction volume of around 600 million Euros in the first half of 2026, with 250 million Euros attributable to the second quarter. While this volume remains approximately 70 percent below the long-term average, it represents a substantial 153 percent increase year-on-year. This development is remarkable given an increasingly complex market environment. The Iran war and rising energy prices led to heightened interest rate expectations and economic uncertainties, which tended to prolong sales processes, particularly at the beginning of the second quarter.
It is positive to note that towards the end of the second quarter, higher market activity was observed, which also included deals in the office segment, Frankfurt's dominant market segment. This analysis was prepared by BNP Paribas Real Estate. Riza Demirci, Managing Director and Frankfurt Branch Manager of BNP Paribas Real Estate GmbH, pointed out that prime net yields in the office and high street segments remained stable despite higher financing and opportunity costs, at 4.50 percent and 3.75 percent respectively. In the office segment, this stability is supported by current strong rental growth in the prime sector, which improves the earnings prospects for high-quality core properties in prime locations. In the logistics segment, however, upward pressure led to a slight yield adjustment of 10 basis points to 4.60 percent.
Office properties dominated Frankfurt's investment structure in the first half of the year, accounting for more than half of the transaction volume at approximately 57 percent. However, the absolute volume of 343 million Euros is still 76 percent below the long-term half-year average. The increasing number of office transactions indicates broader market activity, primarily in the small and medium-sized segment up to around 70 million Euros. Other significant shares of turnover came from hotel properties (11 percent) and the retail segment (10 percent).
The shift towards smaller and medium-volume transactions is also evident in the size category distribution; large-volume deals remain rare. Since 2023, following the interest rate shock, only four transactions in the triple-digit millions have been registered in Frankfurt. Of these, only the property “The Move Blue” was a classic office refurbishment of an existing building. In the current year 2026, as in 2025, no transaction exceeding 100 million Euros has been recorded so far. The largest transaction was the acquisition of the Overture office property at Junghofstraße 13-15 by VKB in the first quarter.
Riza Demirci predicts a cautiously optimistic outlook for the Frankfurt investment market after the noticeably stronger first half of the year. Market activity has visibly increased compared to previous years. Whether significant volume surges will occur in the second half of the year will depend decisively on whether major transactions can be finalised, according to Demirci. Frankfurt's strength as an international financial and services metropolis, with robust fundamental data on the occupier side, suggests a continued investor focus. Demand for high-quality office space and strong rental growth in the prime segment support earnings prospects. It is therefore likely that the investment volume will significantly exceed the 1 billion Euro mark by the end of the year.
The overall economic environment remains challenging. The Iran war, through higher energy prices and altered interest rate expectations, has again brought additional volatility to capital markets and refocused attention on financing costs. A renewed significant increase in financing costs is not currently foreseeable, but a rapid easing is also not in sight. There is little scope for falling yields in the short term. However, selective upward adjustments in individual asset classes are possible.
