The investment market for industrial and logistics properties in Germany confirmed its positive development in the third quarter of 2026. The cumulative transaction volume reached EUR 4.4 billion after the first three quarters. This represents a four per cent increase compared to the same period last year, but is roughly one fifth below the average of the last five years. In total, 206 transactions were concluded during this period, compared to 193 in the previous year.
Diana Schumann, Head of Industrial & Logistics Investment JLL Germany, assesses this result as appropriate, especially against the backdrop of increased interest rates and German federal bond yields. The market has adjusted to a new price level, and since short-term interest rate cuts are not expected, market participants see increased pressure or willingness to act in transaction activity. Large-scale transactions continued to be significant drivers in the third quarter. Seven transactions exceeded the EUR 100 million mark, compared to five in the same period last year. These transactions contributed EUR 1.2 billion or 27 per cent to the total volume. The five largest transactions reached a volume of EUR 925 million.
Most products are currently being offered off-market or in confidential processes with selectively chosen buyers, as Ms Schumann explains. Transactions take place when the product generates interest and the price is deemed acceptable. International investors continued to show great interest in German properties and expanded their holdings by approximately EUR 1.2 billion. With a share of 72 per cent, they represented the largest group of buyers.
Buyer and Seller Structures and Yield Developments
The increased and likely further increasing yields currently offer good opportunities for acquisitions of solid products at attractive prices. This particularly attracts new, foreign capital sources to the German market. However, these investors almost exclusively pursue value-add or core-plus strategies. The dominant buyer group were asset and fund managers with 39 per cent, followed by REITs (16 per cent) and developers (15 per cent). On the seller side, corporates (24 per cent) led the field, followed by developers (16 per cent) and asset and fund managers (13 per cent).
Prime yields recorded a further increase in several cities in the third quarter. In Berlin and Stuttgart, these are now calculated at 4.8 per cent, while Düsseldorf and Cologne stand at 4.7 per cent. Frankfurt, Hamburg and Munich reached 4.6 per cent. In the second quarter, the values were still uniformly 4.5 and 4.6 per cent respectively. Ms Schumann points out that only a small number of products per year are traded at these prime yields. The majority of transactions, depending on location quality, tenant creditworthiness, building condition, alternative use potential and rent level, range between five and six per cent net initial yield.
- —Berlin and Stuttgart: 4.8 per cent
- —Düsseldorf and Cologne: 4.7 per cent
- —Frankfurt, Hamburg and Munich: 4.6 per cent
There is a consistently high demand for properties with long-term leases of at least 15 years and strong-credit tenants. Properties in the Industrial Outdoor Storage (IOS) segment are also sought after. For these product categories, there is a significant volume of foreign capital available, but a limited supply. Here, yields of over six per cent are achieved.
Outlook for the End of the Year
Although the portfolio market is lagging behind expectations and previous year's results, several portfolios with a volume of over EUR 300 million are in exclusive negotiations, with their signing expected later in the year. For the fourth quarter, Ms Schumann forecasts a transaction volume of approximately EUR 2 billion.
