Cushman & Wakefield recorded a transaction volume of €3.06 billion on the German residential property market for the fourth quarter of 2025.
This brings total investments for 2025 to €9.05 billion.
Despite a marginal decline of 2% compared to the previous year, the result is a clear sign of market stability. Some ongoing transactions require more time to reach final agreement and will therefore not be finalised until the beginning of 2026 in many cases.
Jan-Bastian Knod, Head of Residential Investment Germany at Cushman & Wakefield, comments: "In our view, the slight decrease in transaction volume does not reflect the actual market dynamics and the high level of interest in the residential market in Germany. We see many positive signals in the market that indicate high interest and increasing market momentum. In addition to foreign capital, which is primarily looking at large-volume investment opportunities, domestic capital is increasingly returning to the market. With a particular focus on new-build quality, it is clear that forward deals are also making a comeback."
High demand for foreign capital, domestic capital returns
In the fourth quarter, foreign capital accounted for around 41% of transactions, up around 13 percentage points on the previous quarter. For 2025 as a whole, foreign capital accounted for 32% of transactions, compared with 68% for domestic capital.
Foreign capital is mainly focused on larger-volume portfolio purchases via value-add or opportunistic investments. Capital from Asian, North American and Middle Eastern sources is seeking suitable investment opportunities through investment managers, often based in London.
In comparison, domestic sources of capital continue to be more selective in the residential investment market. The focus here is on individual transactions with a volume in the mid double-digit million range. It should be noted that such deals involve properties in good locations with new-build quality, characterised primarily by core capital with low distribution yields.
Individual transactions and portfolio transactions on a par
In 2025, the share of portfolio transactions in the total investment volume was almost equal to that of individual transactions. Portfolio transactions accounted for around 49.4% (€4.47 billion). Supraregional portfolios are particularly noteworthy: at £3.37 billion, they accounted for three quarters of all portfolio transactions.
Individual transactions amounted to £4.58 billion in 2025, only slightly more than portfolios. National investors were particularly active in this segment.
Forward deals are making a comeback, creativity in transactions
Cushman & Wakefield is seeing increasing demand for forward deals. Due to the limited availability of new-build quality products in good locations, investors are gradually looking at more forward deals. The focus is on location quality and the creditworthiness of the developer, but also on ESG compliance. Without energy efficiency, many investors are unable to make a purchase. If building rights exist, longer forward periods of 18-24 months until completion are also possible again.
‘In summary, creativity currently plays an important role in the structuring and financing of many transactions. Joint venture structures, co-investors and concepts with project developers are becoming increasingly visible,’ says Jan-Bastian Knod.
Student and micro-living: High investor interest – transaction activity remains low due to limited product availability
In the fourth quarter of 2025, transaction volume in this sector remained low at €23 million. This brought the total for the year to €142 million. "This falls far short of investor demand for the market. Rather, the low level of new construction activity plays a significant role in the low availability of attractive investments. In addition, larger announced platform deals in 2025 were not completed or were postponed," said Jan-Bastian Knod. Cushman & Wakefield nevertheless sees a clearly positive trend for 2026 and expects transaction volume to increase.
Jan-Bastian Knod concludes on the further development of the residential investment market in Germany: ‘The enormous market momentum, with increasing interest from both national and international capital, confirms the stabilisation of prices, with a tendency towards falling yields for the course of 2026 as a result. The increased re-entry of national capital will determine transaction activity, together with the high demand for large-volume transactions by foreign capital.’
