Retail investment market Germany
The investment market for retail properties is likely to have overcome the low point of the current cycle in 2024 and will close with a slightly positive result. Retail investments totaling €5.94 billion have been recorded, which is €10 % more than in the previous year (2023: €5.40 billion). This positions the retail sector as the second strongest commercial asset class. Nevertheless, this result is almost €50 % below the average of the last ten years (2014-2023: €11.24 billion) and around a third below that of the last five years (2019-2023: €9.08 billion).
Retail transaction volume
The year-on-year increase is due to a significant rise in single investments, which grew from €2.95 billion in 2023 to around €5.00 billion (+69 %). Outstanding transactions include the Munich properties „Fünf Höfe,“ „Maximilianstraße 12-14,“ and „Pasing Arcaden“ (each with prices in the triple-digit millions), as well as the KaDeWe in Berlin with a transaction volume in the billions. In contrast, portfolio volume decreased from around €1.5 billion to approximately €0.9 billion (-62 %). The portfolios recorded were mainly in the low to mid double-digit million euro range, although there were significant exceptions, such as a package of supermarkets and DIY stores sold to Ores Germany for a triple-digit million amount.
Transaction volume by buyer origin
In 2024, German investors increased their investments to 3.68 billion euros (+29 %), while international investors recorded a volume of 2.26 billion euros, which was 11 %lower. Among foreign investors, those from Thailand, the USA, Spain, and the Netherlands stood out. Investor types „Corporates“ and „Asset / Fund Managers“ both achieved investments above the one-billion-euro mark. The increase in „Private Investors / Family Offices“ is noteworthy, as they doubled their invested capital compared to 2023.
Transaction volume by retail type
The major transactions in Munich and Berlin as well as a large number of department store sales, some of which resulted from the Signa insolvency, led to around €3.56 billion being invested in commercial, department store and warehouse properties in 2024 as a whole (+€92 %). Supermarkets, discount stores and specialist stores/retail parks accounted for almost EUR 2.0 billion, meaning that a third less was invested here. At around EUR 0.4 billion, shopping centers are also below the previous year's level.
Top Retail Returns
The stable trend in prime yields for commercial properties in the top locations continued in the fourth quarter of 2024. There were no changes compared to either the previous quarter or the previous year. Accordingly, prime yields within the top 5 markets range from 4.10 % in Munich to 4.30 % in Düsseldorf and Frankfurt. The prime yields for food-anchored retail properties and retail parks are also stable at 4.90 % and 5.00 % respectively. Shopping centers remained unchanged in the last three months, but showed an increase of 0.20 % points compared to the previous year to currently 5.80 %. The economic upturn in Germany continues to fail to materialize. Forecasts for 2025 do not anticipate any significant growth, which is also reflected in the renewed decline in the ifo business climate. The GfK consumer climate remained in negative territory at -23.1 points in December 2024. And according to the HDE consumer barometer (97.5 points), consumption is not expected to brighten up any time soon; instead, consumer sentiment is likely to deteriorate further. Despite the difficult conditions, marketing activities on the retail investment market are currently increasing. Under the current conditions, food-anchored retail properties are likely to be the focus of investor demand in the coming months. Overall, a transaction volume slightly above the previous year's level is expected for 2025.
Top 5 Retail Yields
Top Returns by Asset Class
