Investment volume on the German retail market hits an all-time high

  • Investment volume doubles to around €18.1 billion in a year-on-year comparison

  • Large portfolio disposals keep investment turnover at a high level

  • Substantial increase in the share of retail property in the investment market for German commercial real estate

  • International investors dominated the German retail investment market in 2015 – share advances to 56%

  • Net prime yields still in decline across the board – shopping centres and retail parks in particular report significant yield declines

  • Strong investment activity to hold steady in 2016 as well – product availability presents a constraint


According to analyses conducted by commercial real estate services company CBRE, around €18.1 billion was invested in German retail real estate over the course of 2015. Measured against the result of 2014, which came in at just under €9.2 billion, the investment volume has almost doubled, setting a new record result for the German retail investment market in 2015 and marginally outperforming the record high of €18 billion set in 2006. An especially strong second quarter in particular contributed to the outstanding overall result for the twelve-month period.

Jan Dirk Poppinga, Head of Retail Investment
Retail property features among the most popular investment targets in Germany's commercial real estate market and enjoys huge interest and consistently high demand from domestic and international investors. We therefore expect investment activities in the German retail property market to remain brisk in 2016.
Jan Dirk Poppinga, Head of Retail Investment

Share of international investors at 56%
The German retail property market continues to benefit from the strong inflow of foreign capital. A large number of international players are placing great trust in this market's capacity for value retention. Very good fundamental data, a labour market with record employment figures and, above all, extremely low inflation suggest rising turnover in the retail segment and attractive opportunities here for real estate allocation. In addition, investors from North America are benefiting from exchange-rate effects emanating from the recent weakening of the euro. With investments running at a good €10.1 billion, international investors represented a significantly higher share of 56% in the overall volume of the last twelve months compared with 2014 when they invested some €4.5 billion, equating to a share of 49%. The strongest investor group came from Canada, with funds invested of €3.5 billion and a contribution of 19% to the overall investment volume. Investors from the USA and France came in second and third place with a transaction volume of just under €1.6 billion each, representing a share of nine percent, respectively.

Alongside direct investments, the year 2015 was characterized by large-scale real estate takeovers as part of company transactions. Moreover, companies took advantage of the opportunity arising from these transactions to position themselves in the lucrative German retail market or to win additional market shares. Noteworthy transactions include the takeover of the 43 German department stores belonging to the Galeria Kaufhof and Sportarena distribution chain by way of a joint venture between Hudson’s Bay Company and US-based Simon Property Group in the second quarter of 2015. The 43 stores were transferred to the real estate portfolio of HBS Global Properties in which Ivanhoé Cambridge, Madison International and a US pension fund acquired shares in the fourth quarter. Also in the shopping centre segment, the French company Klépierre took over competitor Corio and its five German shopping centres during the first half of the year, and Canada Pension Plan Investment Board (CPPIB) purchased 46.1% of the shares in shopping centre developer and operator mfi from Unibail-Rodamco.

Portfolio transactions stand out
As in the previous year, the largest proportion of retail investment was accounted for by retail warehouses, retail parks, supermarkets and discounters which attracted investment totalling approximately €6.1 billion, equivalent to 34% of the overall volume in 2015. Investments in this asset class therefore climbed by €2.3 billion, up 60% compared with 2014. Properties changed hands most particularly in the context of portfolio transactions. Along with large-scale portfolios forming part of deals already transacted in the first nine months of 2015, such as the three Superstella, Tannenberg and Turret portfolios sold by Fortress Investment Group, the fourth quarter of 2015 saw the divestiture of a portfolio comprising 20 neighbourhood centres and retail parks, among other transactions, sold by Dutch fund provider Holland Immo Group to UBS, which also contributed to this good overall result.

Investors' risk tolerance increasing
Trading in high-street commercial properties grew significantly in comparison with the previous year. All in all, just under €6 billion were invested in this asset class, representing approximately 33% of the entire retail investment volume. Compared with 2014, the volume invested has therefore soared by €4.4 billion, up 274%. Along with the major takeover of the Kaufhof properties in the second quarter, various other portfolio transactions contributed to the high investment volume. The high-street commercial buildings traded as part of portfolios are largely located outside the Top 5 cities of Berlin, Düsseldorf, Frankfurt, Hamburg and Munich where high-street commercial properties totalling some €1.2 billion were acquired. A large part of investment funds was funnelled into prosperous regional cities and B locations, an example being the Corestate High Street portfolio comprising 35 retail properties in German medium-sized cities, or the portfolio of 21 commercial properties in mid-sized German cities acquired by Sistema Capital Partners in the fourth quarter. Along with severely limited product availability, this also reflects the clearly greater risk tolerance of investors in putting funds increasingly into markets outside the five large investment centres. In this respect, the German retail market, underpinned by the large number of its smoothly functioning retail locations, provides an excellent basis for risk-adjusted portfolio diversification.

Shopping centre segment takes third place
With an investment volume totalling €5.4 billion, representing 30%, the shopping centre segment claims third place. The aforementioned company takeovers as well as various large-scale individual transactions, such as the two deals accompanied by CBRE involving the sale of Ivanhoé Cambridge's Zwickau Arcaden to ECE and the Düsseldorf Arcaden to Hines in the last three months of the year, contributed to this ranking.

Listed property companies and REITs as strongest buyer group
The strongest buyer group in 2015, with an investment volume of around €5.2 billion, was made up of listed property companies and REITs and accounted for around 29% of the entire retail investment volume. Asset and fund managers, as well as the group of open-ended real estate and special funds, took second and third place, each investing around €4.8 billion in German retail real estate. On the seller side as well, asset and fund managers proved to be very active in the year now ended, divesting retail properties worth some €4.4 billion which equates to a share of 24%. Second in the seller ranking came the group of corporates which disposed of property worth €3.5 billion, corresponding to a share of 20%. Along with the Kaufhof takeover, the sale of various retail companies, including Edeka's disposal of the Greenman portfolio and Metro's sale of the Sokrates portfolio, contributed to this high proportion. The third largest group was constituted by listed property companies and REITs which accounted for €3.2 billion, and therefore almost 18%.

The portfolio share rose significantly over the course of 2015. Approximately €10.4 billion in total, representing almost 58% of the retail investment volume, was invested in the context of portfolio disposals compared with just under €4 billion, or 44%, in 2014. International investors in particular have acquired portfolios comprising German retail properties.

Net prime yields still in decline
Strong demand accompanied by a supply shortfall continues to exert growing pressure on initial yields, particularly in the large-scale retail segment. Yields for prime shopping centres in the top markets stood at 4.10%, down 20 basis points against the previous quarter. Comparable products in the prosperous regional centres came in at 4.80%, similarly 20 basis points lower than in the preceding quarter. Net prime yields for cutting-edge retail parks slipped 15 basis points compared with the previous quarter and are now reported at 5.25%. By contrast, net prime yields for specialist stores and supermarkets, as well as for self-service department stores remained stable at 6.25% and 5.70% respectively in a quarter-on-quarter comparison. Commercial properties situated in the prime city centre areas of the Top 6 locations remained initially stable compared with the previous quarter and continued to deliver an average initial net yield of 3.87%. Here the net prime yield for inner-city commercial property in first rate locations varies between 3.50% (Munich) and 4.00% (Düsseldorf and Cologne).

Dr. Jan Linsin, Head of Research
Domestic and international investors' demand for German retail properties is set to continue in 2016 as well, although product availability, particularly in respect of core real estate, is on the way to becoming a constraint.
Dr. Jan Linsin, Head of Research

Accordingly, investors are increasingly focusing on retail properties with value-add potential. A manage-to-core strategy makes value-add products also interesting to more conservatively oriented investors, while offering the opportunity of benefiting from an increased value and repositioning of a retail property. This aspect, combined with the portfolios currently in the market, suggest that momentum will continue in 2016. We therefore assume that the investment volume during the full year will remain around the level seen in 2015", said Poppinga.

Investment volume in retail property (in € billion)













Prime yield* trend of retail property



Jan Dirk Poppinga
Head of Retail Investment
+49 (0)30 72 61 54 155 +

Dr. Jan Linsin
Head of Research Germany
+49 (0)69 17 00 77 663



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