Executive Summary

Macroeconomic environment

Geopolitical risks are dampening growth prospects – inflation is rising, interest rates remain high and capital markets are volatile, whilst early signs of stabilization and selective opportunities are emerging in the property market.

Letting market

A subdued start to the year, office market caught between uncertainty and a focus on quality – the office letting market is down slightly compared to the previous year, with mixed trends across the top 7 cities, large-volume deals remain stable, whilst the mid-market segment has weakened significantly amid rising vacancy rates but stable rents.

Increased activity in the industrial and logistics lettings market – the top 8 markets see take-up at last year’s levels, rents show positive momentum, and activity among Asian players has risen significantly once again.

Investment market

“Gradual recovery” confirmed at the start of the year – quarterly results up significantly despite challenging conditions, further market recovery depends on the course of the crisis, fluctuation in returns possible over the course of the year.

A challenging market environment with delayed transactions in the industrial and logistics sectors – the market has stabilized following a period of above-average growth across different property types, with specialist segments gaining in importance, whilst the focus remains on core products.

A pipeline of grocery properties and broader investor interest are driving the market recovery – demand for highstreet properties and shopping centres continues to rise, with increased interest from foreign investors and the first signs of yield adjustments for retail parks.

Europe is picking up momentum, whilst Germany remains selective – operator structures as key value drivers in the hotel sector – Transaction volumes down significantly yoy, international capital takes a mixed view of Germany, market recovery expected over the course of the year.

A challenging environment and a selective market are holding back the residential investment market at the start of the year – a lack of major deals and portfolios is weighing on results, whilst individual transactions continue to rise; newer core portfolio properties dominate, and projects are picking up again, with a clear focus on the top 7.

Capital is returning selectively to office and commercial properties outside the top 7 cities – the focus is on central locations where occupancy and cash flow are strong in the long term, market momentum is limited by the absence of large-scale transactions, though volume growth is set to remain moderate in 2026 as well.