The German investment market for commercial real estate gained significant momentum in the fourth quarter of 2025. After market activity was characterised by caution in the first half of the year, a more stable financing situation, improved price orientation and growing international demand led to noticeably more activity from autumn onwards.
The total transaction volume for 2025 reached around €23.04 billion, up 3 per cent on the previous year. The fourth quarter proved to be the strongest period of the year with a volume of €6.95 billion, contributing significantly to the positive annual result.
• Top 7 markets at €11.98 billion, roughly on par with the previous year's figure
• International investors account for 45 per cent (around €10.29 billion, +11 per cent compared to 2024)
• Retail property was the strongest asset class with €6.48 billion (28 per cent market share)
• Hotel property grew by over 50 per cent to around €1.97 billion
Economic environment: Stabilisation with continued low growth
At the end of 2025, the German economy was in a phase of moderate stabilisation, albeit at an overall low level of growth. For the year as a whole, only slightly positive economic growth of between 0.1 and 0.2 per cent is expected. While structural challenges such as high cost burdens in industry, a weak construction sector and subdued foreign trade continue to shape the environment, several leading indicators point to a gradual economic upturn in 2026. The combination of rising real wages, a stable labour market, declining inflation rates and foreseeable fiscal stimuli points to a cautious but increasingly sustainable economic stabilisation with signs of recovery, even though the eurozone as a whole is growing somewhat more dynamically.
Interest rate and financing environment: Interest rate pause makes planning easier
On the interest rate side, planning became significantly easier in the second half of 2025. The European Central Bank recently left key interest rates unchanged, stabilising the monetary policy environment. At the same time, yields on ten-year German government bonds remained within a relatively narrow range. This development led to a noticeable improvement in predictability and, in some cases, to slightly improved financing conditions. In the fourth quarter in particular, it contributed to investors once again structuring more financing and implementing transactions. Pricing also became clearer over the course of the year, which provided additional security for many market participants.
Market participants gained significantly more orientation and certainty in the fourth quarter. The combination of more stable interest rates, clearer price ratios and a cautious economic bottoming out has led investors to actively explore opportunities again,’ says Simon Jeschioro, Head of Capital Markets & Investment Advisory Germany at Cushman & Wakefield.
Increase in activity due to large-volume transactions in the fourth quarter
The investment market showed further signs of recovery in the fourth quarter, with the increase in large-volume individual deals particularly shaping the market picture. Of particular note is the sale of the long-established Oberpollinger department store in Munich city centre, which was acquired by local investor Erich Schwaiger for around €380 million. Other prominent inner-city retail properties also changed hands as a result of the Signa insolvency: the Galeria Karstadt department store on Kurfürstendamm in Berlin was sold for around €155 million, while the Corbinian development site in Munich was sold for around €200 million. Both assets went to the Austrian company Stumpf Development GmbH.
In 2025 as a whole, the volume of individual transactions amounted to around €18.23 billion (+12 per cent compared to 2024), while portfolio transactions declined by 21 per cent to around €4.81 billion. This underscores investors' stronger focus on selective, large-volume individual assets. International investors accounted for 45 per cent of the market, around 3 percentage points higher than in the previous year, while domestic buyers remained the largest investor group at 55 per cent, confirming their dominant role in the current market environment.
Regional development: mixed picture, significant upturn in the final quarter
The major German investment locations showed mixed development over the course of the year. Overall, the top seven markets accounted for around £11.98 billion in 2025, which corresponds to a share of 52 per cent and is thus almost on a par with the previous year's level (2024: £11.76 billion).
The investment volume outside the top seven amounted to around €11.06 billion, or a share of around 48 per cent, which was around 4 per cent above the 2024 level (€10.64 billion), underlining the continuing importance of B and C locations.
Within the top 7 markets, Hamburg proved to be the most dynamic location in 2025 with a transaction volume of around €2.29 billion, recording the strongest growth with an increase of 53 per cent over the previous year. Berlin achieved a volume of around €3.33 billion and showed a noticeable upturn, particularly in the second half of the year, but was slightly below the previous year's level (-2 per cent) for the year as a whole. Munich also achieved a very solid result of around €2.78 billion and benefited from several large-volume individual deals over the course of the year; Overall, the transaction volume here was 24 per cent higher than in the previous year. Frankfurt achieved a transaction volume of around €0.97 billion in 2025, remaining well below the previous year's figure (-48 per cent). Düsseldorf recorded an increase of 18 per cent to around €1.30 billion, benefiting in particular from an upturn in the final quarter. Cologne achieved a volume of around €0.98 billion, 13 per cent below the previous year's level, while Stuttgart recorded a significant decline of 32 per cent to around €0.35 billion.
Asset classes: Tailwind at the end of the year in almost all segments
The positive trend also continued at the end of the year at the asset class level. Retail remained the strongest asset class in 2025 with a transaction volume of around €6.48 billion and a market share of 28 per cent, recording a significant increase of 57 per cent over the previous year. The office segment saw a noticeable upturn, particularly in the fourth quarter; overall, the segment achieved a volume of around €5.13 billion (over 22 per cent market share), which is roughly in line with the previous year's level, supported by clearer pricing and a growing willingness to invest on the part of international buyers.
Logistics and industrial properties amounted to around €5.00 billion in 2025, representing a market share of just under 22 per cent, which was around 17 per cent below the previous year's figure. The hotel market continued its recovery and gained significant momentum again at the end of the year: with a transaction volume of €1.97 billion and a market share of just under 9 per cent, the segment recorded a strong increase of 51 per cent compared to 2024 (€1.31 billion).
Yields: Stable levels thanks to price transparency
Prime yields remained stable in the fourth quarter. Office properties in the top seven cities averaged around 4.90 per cent, commercial properties in prime locations around 4.46 per cent and logistics properties around 4.50 per cent. These stable figures indicate that the market has reached a new equi-librium over the course of the year, supported by greater price transparency and a broader investor base.
Outlook for 2026: recovery likely to continue
Looking ahead to 2026, Cushman & Wakefield expects transaction activity to continue normalising. The combination of stable interest rates, increasing international capital mobility and improving economic conditions should help the positive trend seen in the fourth quarter of 2025 to continue into 2026.
"The fourth quarter of 2025 marks a turning point in transaction activity. For the first time in several years, we are seeing a revival, driven by broader demand. We expect this trend to continue in 2026 – not in the sense of a rapid upturn, but as a stable, gradual path back to a normalised market environment," says Alexander Waldmann, Team Leader Research & Insight Germany at Cushman & Wakefield.
