Cushman & Wakefield, one of the world’s largest real estate consultancies, recorded a transaction volume of EUR 2.05 billion in the German residential property market for the second quarter of 2024. This corresponds to an increase of 37 per cent compared to the same period of the previous year and demonstrates the increased investor interest in this sector. In total, residential property with a volume of EUR 3.05 billion was traded in the first half of 2024.
- Transaction volume of EUR 2.05 billion in the 2nd quarter of 2024 up around 37 per cent year-on-year
- Transaction volume of EUR 3.05 billion in the 1st half of 2024
Portfolio transactions characterised the 2nd quarter of 2024 - Stabilisation of the prime yield at 3.90 per cent
- Interest in student accommodation and micro-living increases significantly
Focus shifts to portfolio transactions
The 2nd quarter of 2024 was dominated by large-volume portfolio transactions, which accounted for a turnover of EUR 1.35 billion. The local character of the portfolios, whose components were often located in one city, was striking. The volume of individual transactions fell to EUR 610 million in the period from April to June. In the first quarter of 2024, it had still totalled EUR 854 million, while only EUR 150 million was registered for portfolio transactions.
Further stabilisation of the prime yield
The prime yield remained stable at 3.90 per cent and there are currently no signs of an increase. Cushman & Wakefield assumes that this will not change significantly by the end of the year.
Domestic investors dominate market activity, largest deals in Berlin
National investors acquired residential property worth EUR 1.8 billion in Germany in the second quarter, over EUR 1 billion more than in the first quarter of the year. They are therefore responsible for 82.24 per cent of the transaction volume on the German residential investment market in the first half of 2024.
The two largest transactions took place in Berlin. The Vonovia/Howoge portfolio, which was sold for EUR 700 million, stood out here. A total of 4,495 flats and a 40-hectare site changed hands. Rental income of around 24.3 million euros led to a gross yield of around 3.5 per cent.
MEAG also acquired three properties in Prenzlauer Berg and Mitte in Berlin. The properties, which will be completed between 2020 and 2022, comprise a total of around 36,000 m² of living space and 544 flats.
Transaction volume for and micro-living already exceeds previous year’s total value
As forecast by Cushman & Wakefield at the end of the first quarter of 2024, the transaction volume for student residences and micro-living properties rose significantly in the second quarter. After EUR 55 million in the first three months of the year, sales totalling EUR 100 million were recorded from April to June. This brings the cumulative figure for the first half of the year to EUR 155 million and is already EUR 33 million higher than in 2023 as a whole.
The largest deals in the second quarter included the acquisition of a new-build property with 177 student flats by Catella from the Drengenberg family office for around EUR 23 million. Mapletree also acquired a student accommodation portfolio in the UK and Germany. In Germany, this involved a property in Bremen with 284 beds and over 5,000 m².
Jan-Bastian Knod, Head of Residential Investment Germany at Cushman & Wakefield, comments: “The demand for residential property in all asset classes is unbroken. Many national and international investors are increasingly focusing on residential properties. The increasing price stability is also encouraging investors to enter this sector or expand their exposure.”
