Retail real estate contributes to one quarter of the volume on the commercial real estate investment market

  • Investment volume of €4.3 billion in the first nine months of 2023 – 38 percent lower year on year
  • Prime yields climb in a range of 0.6 to 1.12 percentage points in the last twelve months, depending on the segment
  • Retail warehouses and retail parks capture a share 55 percent

Germany’s retail real estate market registered a transaction volume of €4.3 billion in the first three quarters of 2023. Although the result marked a year-on-year decline of 38 percent, the segment nevertheless ranked in second place on Germany’s real estate investment market, along with logistics. Of the transaction volume, 36 percent was attributable to the Top 7 cities, up 13 percentage points compared with the previous year’s period. The largest deal in the year to date and in the third quarter across all asset classes was the sale of the entire X+Bricks portfolio (188 properties) for more than one billion euros to investment and asset manager Slate Asset Management. This is the conclusion drawn in a current analysis prepared by the global commercial real estate services company CBRE.

Jan Schönherr, Head of Retail Investment

Similar to almost all real estate segments, the retail property investment market is also feeling the lasting impact of the interest rate turnaround and the associated repricing process. Despite the all-present challenges in the retail business, sentiment picked up on the retail real estate market. Plummeting footfall caused by the coronavirus and also the structural challenges of e-commerce have seemingly been overcome, at least in the prime locations of the top cities.

Jan Schönherr, Head of Retail Investment

The largest share in the transaction volume was attributable to retail warehouses and retail parks that together took a share of 55 percent, also due to the X+Bricks transaction. High street properties with 35 percent ranked in second place in the retail segment. Shopping centers accounted for only a good five percent.

German institutional investors in particular remain especially cautious. By contrast, international investors upped their share in the retail transaction market by 23 percentage points to 58 percent. Greater market activity was also discerned from high net worth family offices and private individuals.

Yields trending up – but more slowly

Dr. Jan Linsin, Head of Research

With the bank margin and risk premium on top, it comes as no surprise that pricing needs further correction, particularly in the large-volume segment with institutional investors participating both in Germany and abroad.

Dr. Jan Linsin, Head of Research

Moreover, financing interest, measured in reference to the 5-year EURO Swap Rate for instance, currently stands at 3.4 percent and the risk-free rate in the form of the 10-year Bund at more than three percent at the last count. The benchmark yield alone has gained two percentage points in the last 18 months. Investors are pricing this yield uptrend into their potential real estate allocations and are consequently demanding an adequate risk premium to compensate for the risks of investing in tangible assets.


Anne Gimpel, Team Leader Valuation Advisory Services

In the meantime, we are seeing the increase in yields beginning to slow. For example, food market prime yield rose by a mere 0.1 percentage points in the last quarter to 4.7 percent.

Anne Gimpel, Team Leader Valuation Advisory Services

Shopping centers in prime locations recorded the sharpest growth, advancing 0.4 percentage points to 5.5 percent. Shopping centers in B locations climbed by 0.35 percentage points to 6.85 percent. High street properties in the top markets saw prime yield increase by 0.3 percentage points to 4.54 percent, while retail parks have clocked up 0.25 percentage points to currently five percent.

Outlook for the full year 2023

“The investment volume on the retail real estate market should move in the direction of six billion euros over the remainder of the year,” Schönherr says in anticipation. “This is considerably less than in as recently as 2022. That said, the segment will probably secure first place among the commercial real estate asset classes. In the coming months, investors will enjoy attractive opportunities, particularly in the large-scale segment, as a range of different products are due to come on the market.”





Jan SchönherrAnne Gimpel
Head of Retail InvestmentTeam Leader Valuation Advisory Services
+49 (0)30 726145-153+49 (0)30 726145-158
Dr. Jan Linsin 
Head of Research Germany 
+49 (0)69 17 00 77 404 

About CBRE

CBRE Group, Inc. (NYSE: CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2022 revenue). The company has more than 115,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services.

CBRE Germany has been represented by its head office in Frankfurt am Main since 1973; there are further branch offices in Berlin, Düsseldorf, Essen, Hamburg, Cologne, Munich and Stuttgart.