The German retail property investment market recorded a transaction volume of around 2.5 billion euros in the first three quarters of 2026, representing a 35 per cent decline compared with the same period last year. Lengthier due diligence processes and renewed purchase price negotiations as a result of interest rate developments are delaying larger transactions in particular and pushing deals into the fourth quarter or the coming year. Speciality retail outlets and retail parks accounted for the largest share of the transaction volume at around 43 per cent, followed by prime retail properties with a share of 25 per cent. Shopping centres accounted for 19 per cent, whilst other retail properties accounted for 13 per cent of the transaction volume. No portfolio sales were recorded in the third quarter. Over the first three quarters, the portfolio share stood at 20 per cent, down from 44 per cent in the same period last year. At the same time, the market is seeing a high level of activity and an increasing number of financing enquiries. This is the finding of a recent analysis by the global property services firm CBRE.
“We are seeing a significant discrepancy between the transactions that have actually been completed and the general level of activity in the market,” says Jan Schönherr, Head of Retail Investment at CBRE. “Many properties and portfolios are currently on the market, but the sales processes are taking considerably longer than was the case in the past. The continuing challenging financing environment, the need for investment in the structural and technical condition of buildings, and the potential for implementing ESG measures are placing greater demands on the profitability of investments. Investors are scrutinising very closely whether the property and the underlying sales strategy align with their respective investment strategies and return requirements.”
At the same time, the changing price situation is opening up new opportunities to enter the market. “We are seeing various international investors considering entering the German retail property investment market, and new players are also testing the waters,” says Schönherr. “These include investors who have not previously invested in the retail sector. Not all of them will invest this year. However, they are a key driver of market activity in the coming year and underscore the interest of foreign players in the German retail property investment market.”
“In the third quarter, too, the food retail sector remains the most sought-after segment amongst investors,” says Schönherr. “Food-anchored retail parks continue to be a key pillar of the German retail investment market and are being considered both as individual properties and as part of portfolios. Retail properties requiring low management intensity, such as DIY stores on long-term leases with a sustainable operating model, are also attracting interest. At the same time, we are seeing interest in shopping centres that offer potential for rent and value appreciation within a business plan period of four to seven years. In the case of high-street properties, however, transaction processes are proving challenging, as – apart from a few trophy properties – demand is generally driven by private individuals and family offices, and the asking prices of buyers and sellers often still diverge.”
“Prime yields remained unchanged in the third quarter compared with the previous quarter in most segments,” says Anne Gimpel, Team Leader of Valuation Advisory Services at CBRE. For shopping centres in A-locations, they rose from 5.9 to 6.0 per cent. The prime yield for prime retail property in the top seven cities remained unchanged at 4.44 per cent. There was also no change compared with the previous quarter for shopping centres in B-locations (7.75 per cent), supermarkets (4.6 per cent) and retail parks (4.9 per cent). For DIY stores, the prime yield rose from 5.85 to 6.0 per cent. “By the end of the year, we expect further price adjustments and, in some cases, further rises in yields, due to interest rate trends and, in some instances, higher dividend expectations among institutional investors,” says Gimpel.
Outlook for the full year
“We expect a more dynamic market environment in the fourth quarter, with more transactions being completed than in the third quarter. The pipeline is well-stocked and there is interest in many areas. However, some transactions will be postponed until next year, so we do not expect to match last year’s transaction volume,” explains Schönherr.
