BNP Paribas Real Estate publishes market figures for Q4 2025
At the end of 2025, the Munich investment market benefited from a strong final quarter, which was decisively boosted by one-off effects: almost 44% or €1.1 billion of the total transaction volume of €2.56 billion was accounted for by the period between October and the end of December alone. The high turnover in the fourth quarter is attributable in particular to the two three-digit million deals of the former Signa properties Oberpollinger and Corbinian in Munich city centre. Against this background, the overall balance was just under 5% short of the previous year’s result, while a decline of around 30% had to be reported in the third quarter. This is the result of the analysis by BNP Paribas Real Estate.
But there is also lively market momentum away from major transactions: At over €1.4 billion, investments in the small and medium-sized segment (<€100 million) increased by a good 15% compared to 2024 and ensured a broadly diversified deal base.
“Nevertheless, price sensitivity among investors is still noticeable in the still challenging financial market environment, which is also reflected in the prime yields. As a result, logistics assets have risen by 25 basis points over the course of the year to currently 4.50%. In contrast, the premium segment in the retail high-street and office sectors recorded no change, trading at 3.45% and 4.20% respectively, as was the case 12 months ago,” explains Michael Morgan, Munich branch manager of BNP Paribas Real Estate GmbH.
Investments in the centre: City with almost 60% of turnover
When it comes to the distribution of investment volume across the Munich market area, the city clearly stands out: with almost 60% of total turnover, the majority of the result was generated in the inner-city locations of the Bavarian capital. It is pleasing that, in addition to the Signa department store transactions, Germany’s largest-volume hotel deal of the year (Mandarin Oriental) and several medium-sized office assets have also contributed to diversified investment activity in the city centre.
In the overall ranking of the property types with the highest turnover, retail (35.0%) and office investments (33.1%) dominate the market: over 68% together are accounted for by these two top sectors. While the retail division has the significantly higher average volume per sale due to major deals (€130 million vs. €45 million), offices are clearly at the top in terms of the number of transactions (one third of all investments). However, only office properties, which exceeded the weak previous year’s result by 71%, recorded an increase in take-up. In the retail segment, on the other hand, several very large exceptional transactions were already observed in 2024. However, hotel assets also provide good demand impetus (just under 12% of the total), and logistics sales are represented in the ranking with around 9%.
Prospects
At the end of 2025, the overall balance sheet on the Munich investment market must be assessed in a differentiated way: While for a long time in the previous quarters it looked as if the top market would have to report a significantly lower result, the annual financial statements ultimately show a comparable turnover to 2024.
“In the past 24 months, Munich as an investment location has repeatedly been able to rely on several major deals that have also been among the top transactions in their respective asset classes in a nationwide context. As a result, the Bavarian capital is starting 2026 with confidence, but it remains to be seen whether and when major sales drivers can be brought over the finish line again,” says Michael Morgan.
Other positive factors that speak for a good sales development are the diverse demand impulses that extend across the different types of properties and also show a wide range in size categories. However, market sentiment across locations remains strongly dependent on the geopolitical situation, which is likely to remain difficult to anticipate.
Assuming that the financial market environment remains largely stable and that geopolitical uncertainties occur, prime yields are expected to move sideways at the beginning of the year.
