The Frankfurt investment market has started 2026 with a solid result. By the end of the first quarter, the transaction volume of the banking metropolis had totalled €354 million. Although market activity is still far below the years before the interest rate turnaround (volume Q1 2026: -61% below 10-year average), the current result represents by far the highest Q1 volume since 2022. Accordingly, the prior-year quarter was exceeded by almost 120%. In a nationwide comparison, Frankfurt ranks 3rd behind Munich and Berlin. This is the result of the analysis by BNP Paribas Real Estate.
“The sale of the two properties Fifty Avon and Overture in particular contributed to this increase, as this means that, unlike in the previous year, larger office properties also contributed to the take-up. In addition, the number of registered transactions, with 15 deals, was also above the level of the three previous years, in which only a single-digit number of disposals were recorded,” explains Riza Demirci, Managing Director and Frankfurt Branch Manager of BNP Paribas Real Estate GmbH.
Net prime yields moved sideways at the beginning of the year. For top office properties in prime locations and the logistics segment, the unchanged 4.50% is to be applied in each case. Inner-city commercial buildings remain unchanged at 3.75% in the premium segment.
Office properties account for the majority of the volume, still no major transactions
A look at the distribution of transaction volume by size class illustrates why the Frankfurt investment market did not gain even more momentum despite an increasing number of trades in the first quarter of 2026. Since 2022, no transaction in the three-digit million range has been registered in any first quarter. Accordingly, those large-volume deals that have significantly moved sales in the past have been missing so far. Meanwhile, deals in the medium-sized segment between €50 million and €100 million were the most heavily involved, contributing around 56%.
At the end of the first quarter, office investments are at the top of the asset class ranking. They account for almost two-thirds of the volume, which means that they are back in line with the high long-term average value that is usual for Frankfurt. In addition, retail properties also account for significant sales at just under 17%, which mainly conceals food-anchored local supply centres.
For the first time in several years, the largest share of the transaction volume at the beginning of the year was accounted for by city locations (a good 47%), which correlates with the high office share of earnings. However, due in part to the sale of development land and office properties with greater investment requirements, the secondary locations also made a significant contribution to the result at 36%.
Well-filled deal pipeline, geopolitical developments are a factor of uncertainty
The first interim balance of the year on the Frankfurt investment market is much more positive than in previous years. Against the backdrop of the solid start to the year and a well-filled transaction pipeline also in the large-volume segment, an annual result well above the billion mark seems likely from today’s perspective. However, the prerequisite for this is that the current increase in geopolitical uncertainty does not worsen in the further course of the year. In particular, the latest developments in the Middle East have led to noticeably higher volatility on the capital markets, which may also have an impact on the Frankfurt real estate investment market.
“However, it is positive that market activity is already broader at the beginning of the year and that demand is not exclusively based on absolute core products. Properties with higher investment requirements are also attracting interest, as long as the perspective, location and pricing are convincing. In addition, the transactions that have already been concluded were initiated in a very challenging environment, which underlines the market’s fundamental receptivity. If the general conditions do not deteriorate significantly, there is therefore a good overall chance of a further revival of market activity in the further course of the year,” predicts Riza Demirci.
Link to the market report: https://www.realestate.bnpparibas.de/marktberichte/investmentmarkt/frankfurt-report
