The German residential investment market registered a transaction volume of EUR 1.65 billion in the third quarter of 2026. This represents a decrease of approximately 17 percent compared to the same quarter last year, which reached EUR 1.99 billion, and a 26 percent decline compared to the strong second quarter of 2026 with EUR 2.22 billion. Cumulatively, the transaction volume for the first three quarters of 2026 amounted to EUR 5.75 billion, which is an almost stable result compared to the same period last year (EUR 5.84 billion, minus 1.6 percent).
Jan-Bastian Knod, Head of Residential Investment Germany at Cushman & Wakefield, noted that the third quarter of 2026 was characterised by more selective investor behaviour. He explained that increased financing costs had led to delays in transactions. At the same time, he emphasised that the high proportion of portfolio deals clearly shows that large-volume capital, particularly from international sources, continues to be invested strategically in the German residential market.
Portfolio Deals Gaining Importance
After single asset transactions dominated the German residential investment market in the first half of 2026, the majority of the transaction volume in the third quarter was accounted for by portfolio transactions. At EUR 965 million (59 percent), these surpassed single asset transactions for the first time this year. Compared to the same quarter last year, when the portfolio volume was EUR 755 million, this represents an increase of almost 28 percent. Local portfolios contributed EUR 487 million, while supra-regional portfolios were almost on par with EUR 478 million. Single asset transactions, however, totalled EUR 684 million, down from EUR 1.23 billion in the third quarter of 2025.
Knod confirmed a pattern already observed in the previous quarter: international capital is concentrating on large-volume, supra-regional portfolios and new-build projects, while national investors primarily invest in local portfolios and single assets. The most significant transaction of the quarter was conducted by Net Zero Properties, which acquired the Polarlicht portfolio from DWS. This comprises around 5,600 residential units and approximately 333,000 square metres of lettable area, spread across five locations in Schleswig-Holstein and Lower Saxony, including Flensburg, Neumünster and Bremerhaven. According to media reports, the purchase price amounted to approximately EUR 350 million.
International Capital Active in Development Projects
International capital also showed increased activity in development projects. M&G Real Estate secured a new-build project with 145 rental apartments on Landsberger Allee in Berlin for EUR 56 million for the M&G European Property Fund through a forward funding agreement. Completion is scheduled for the end of 2027. Knod highlighted that this trend demonstrates that forward deals are once again gaining attractiveness for institutional investors, providing early access to high-quality new-build products. In total, international funds amounting to EUR 618 million, representing approximately 38 percent of the total volume, were invested in German residential investments in the third quarter of 2026. This share is slightly below the previous quarter (40 percent), but more than double that of the same quarter last year (17 percent). National investments totalled EUR 1.03 billion, corresponding to a share of 62.5 percent. Since the beginning of the year, international investors accounted for EUR 1.98 billion or 34 percent of the transaction volume.
According to Jan-Bastian Knod, international investor interest in student and micro-living remains unbroken. He noted that, given increased financing costs, projects and platforms are currently being scrutinised more intensely, which extends decision-making processes. Nevertheless, he expects that the ongoing processes will lead to higher transaction volumes with a time lag and that newly established platforms will result in a successive increase in transaction activity. Despite the lower quarterly volume, the residential investment market is showing a solid performance. After nine months, it is almost at the previous year's level, and large-volume portfolio transactions are again being finalised. Investors are acting more disciplined, with financing conditions increasingly determining the realisation of transactions. These factors will also be crucial for the final quarter of 2026 and the coming year.
