Frankfurt ,

Momentum on the Residential Investment Market Holding Steady

  • Transaction volume reaches €17.2 billion in 2018

  • Strong demand for all risk classes ongoing

  • Number of residential units changing hands drops slightly; average prices per sq m up 15 percent


In 2018 as a whole, the transaction volume on the residential real estate investment market for portfolios upward of 50 units grew by 10 percent to €17.2 billion in comparison with the previous year. This is a conclusion drawn in a current analysis prepared by the global commercial real estate services company CBRE.

Konstantin Lüttger, Head of Residential Investment
We observed strong demand across all risk classes in 2018. Investors focused on core-plus portfolios in particular. Large-scale transactions are becoming increasingly important regardless of the risk class.
Konstantin Lüttger, Head of Residential Investment

Large-scale transactions upward of €50 million were accounted for by 201 portfolios worth €15.8 billion in total. In 2017, this figure stood at 194 portfolios representing a sum total of €13.6 billion. The largest deal in 2018 was the corporate takeover of BUWOG by Vonovia. The largest portfolio transaction was Industria Wohnen’s sale of the Century portfolio to Danish pension fund PFA for around one billion euros. CBRE advised Industria Wohnen during the transaction.

Michael Schlatterer, Team Leader Valuation Advisory Services
Investment activity in 2019 is likely to continue slightly below the level of 2018. Although most parameters, such as the strong and regular influx of migrants, insufficient volume of new construction, lack of capacities in the building industry and the low interest rate environment, all point to ongoing momentum, political influence in Berlin, Munich and Hamburg could rattle some investors. This is especially applicable to the topic of first right of refusal, as well as to property tax and a more stringent federal rent control (Mietpreisbremse).
Michael Schlatterer, Team Leader Valuation Advisory Services

Supply shortage driving prices

The increase in the transaction volume was driven by a higher price level for traded properties. While the number of properties that changed hands edged down two percent to 117,800, the average sq m price rose to €2,310 per sq m. This corresponds to an increase of 15 percent in comparison with 2017.

Konstantin Lüttger, Head of Residential Investment
Excess demand on the residential investment market is pushing up the price of portfolios.
Konstantin Lüttger, Head of Residential Investment

Yet another reason behind the growing interest of investors in B locations.

Konstantin Lüttger, Head of Residential Investment
Apart from greater product availability, B locations also offer a yield advantage compared with the Top 7 cities. We are seeing the process of privatization accelerating in these locations.
Konstantin Lüttger, Head of Residential Investment


New construction gaining in importance

Especially institutional investors, insurance companies and pension funds, for instance, are showing huge interest in new construction and development. Funds invested in developments rose by 12.5 percent to around €5.1 billion in 2018.

Residential portfolio transactions in Germany (upward of 50 residential units)

Source: CBRE Research, Q4 2018.


Market for residential portfolios in Germany

Source: CBRE Research, Q4 2018.


Konstantin Lüttger
Head of Residential Investment Germany
+49 (0)69 17 00 77 29

Michael Schlatterer
Team Leader Valuation Advisory Services
+49 (0)30 726 154 156

Jan Schwarze
Team Leader Research
+49 (0)69 17 00 77 150


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