Savills examines real estate investment market in Germany: Transaction volume stable, liquidity remains limited

Transactions in the three-digit million range remained rare overall, and often it even took special circumstances for them to take place at all, as Matthias Pink, Head of Research Germany at Savills, explains: "Of the ten largest individual property transactions in the first half of the year, the public sector was on the buyer's side in five cases. Two further sales were made as a result of insolvencies. This leaves only three transactions that are suitable as real benchmarks for the market – and they are offset by numerous aborted sales processes. Especially in the case of large-volume office properties, the number of potential buyers continues to be very small, regardless of the risk class." The fact that public sector institutions were on the buyer side in some of the largest transactions of the current year is also reflected in their acquisition volume: In the 1st half of the year, they acquired properties for more than EUR 2 billion, which is already the same as in the whole of 2025. Conversely, institutional investors remained extremely cautious. As direct investors, pension funds (purchase volume of 150 million euros), insurance companies (75 million euros) and the like played almost no role at all in the 1st half of the year. The same applies to open-ended real estate mutual funds as typical buyers of large properties, which have appeared exclusively as sellers in recent months. Family offices and private investors, on the other hand, continued to play a disproportionately large role in a long-term comparison, with a purchase volume of just under EUR 1 billion. However, they appeared much less frequently than last year in purchases of more than EUR 50 million.

Overall, according to Savills, demand is stable, but not increasing. On the other hand, there is a large and growing supply. Together with the rise in interest rates since the beginning of the Middle East conflict, this is increasing the pressure on prices. In particular, initial yields for properties outside the top segment moved upwards in the 2nd quarter. In some cases, however, prime yields also rose. Savills expects a further increase in the coming months. Nemecek outlines the overall outlook for the rest of the year as follows: "Last year, a weak second quarter was followed by a much stronger second half of the year. It remains to be seen whether this pattern will be repeated in 2026. The ongoing uncertainty rather speaks for a continued wait-and-see attitude on the part of many investors. At the same time, the supply and pragmatism on the seller side are increasing. However, we do not see a fundamental change in the dynamics of the market at the moment." In its baseline scenario, Savills therefore continues to expect a transaction volume of around EUR 35 billion for 2026.

* only transactions from 20 residential units