(Bloomberg) -- Germany’s beleaguered real estate market showed tentative signs of recovery as investors completed more large deals, even though offices are still getting the cold shoulder.
In the first nine months of 2024, 40 real estate transactions with a value of more than €100 million ($106 million) were completed, rising from 31 in the same period a year ago, according to data provided by Cushman & Wakefield Inc. For the full year, the real estate broker projected that all commercial transactions will rise 16% to around €25 billion.
Logistics and residential properties are increasingly drawing interest from investors, although the number and total volume of these transactions still pale in comparison with the boom market of the cheap-money era.
The office market continues to be mired in a post-pandemic slump amid uncertainty over future demand for workspace. Investment volumes in the segment were relatively flat in the first nine months of this year. In 2023, large office deals plunged to about €1 billion from around €12 billion in 2022.
Buyers of large portfolios predominantly come from outside Germany, accounting for more than half of all big transactions so far in 2024, the data shows.
That trend is likely to continue as international buyers take advantage of comparatively low prices while the market is still in recovery, according to Tina Reuter, Cushman & Wakefield’s head of Germany.
“Compared to the low interest rate period, when international buyers were unable to compete with German institutional investors, price levels have fallen significantly and there are attractive investment opportunities again for them,” she said.
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