Differentiation in the office market also reflected by investment activity in 2025

- Overall investment volume of €5.5 billion in 2025, down 11 percent year on year 
- Value-add transactions account for around 20 percent of the investment volume
- Prime yield stable at an average 4.76 percent across the Top 7 locations
- Rising rental income in top locations boosts returns

Investment activity on Germany’s office real estate investment market totaled €5.5 billion in 2025, marking a decline of 11 percent compared with the previous year. The share of the office asset class in the overall German real estate investment market came in at 17 percent, putting this asset class in fourth place, following on from residential, logistics and retail. The lack of momentum at year-end also contributed to a comparatively low market share. Furthermore, the overall volume was slowed especially by the diverging price expectations of buyers and sellers, a situation compounded by demanding financing and equity requirements. Prime yield as an average across the Top 7 locations stabilized at 4.76 percent over the course of the year. At the same time, cash flow effects are becoming increasingly apparent in prime CBD locations. Rising rents in these locations are supporting current returns and positively impacting performance. These are the conclusions drawn from current analysis prepared by the global commercial real estate services company CBRE.

“The office asset class continues to operate in a challenging environment, also in the context of Germany’s tight macro-economic situation.”
Marcus Lemli, Head of Capital Markets at CBRE Germany

“If, as expected, the economy gradually stabilizes as 2026 progresses this would deliver greater planning reliability that should translate into higher levels of transaction activity. At the same time, a select few office markets are already sending positive signals in this environment. Berlin’s office real estate market posted record figures for lease agreements, for instance, and Munich’s office leasing market saw significant growth in the second half of the year and particularly at year end. A number of large-scale transactions concluded were a determinant factor here.”

Differentiation by location and quality on the up – rents underpin prime performance
"Differentiation by location, quality and sustainability standards is increasingly apparent in the market. Limited supply accompanied by high demand is exerting upward pressure on rents. A project pipeline that is more likely to contract in the medium term given the changed framework conditions could serve to exacerbate this supply shortage.” 
Dr. Jan Linsin, Head of Research at CBRE Germany “

Core and core plus dominate – value-add still relevant 
Risk averse strategies continued to dominate transaction activity. Core properties took a share of 38 percent of the investment volume while core plus stood at 26 percent, with these two risk classes taken together capturing 64 percent. Value-add investments remain relevant – with repositioning targeted for outdated office stock accounting around 20 percent of the investment activity. By contrast, opportunistic transactions remain the exception. Given the uncertain macro-economic environment, however, along with the recalibration of the office asset class, virtually no portfolio transactions took place against the backdrop of structural change.

“Portfolio streamlining is ongoing in tandem with the market price readjusting to find a new level in line with the market. Although acting as a constraint on transaction momentum, this scenario is also giving rise to an increasingly reliable price signal.”
Sandro Höselbarth, Head of Valuation & Advisory Services Germany at CBRE

“At the same time, seven large-scale deals worth some €1.3 billion in total were registered, five of which by German institutional investors. Core investors are making a gradual comeback, and a well-filled transaction pipeline suggests the asset class is set to reinvigorate,” Höselbarth adds. 

In terms of office properties, invested capital concentrated on the Top 7 locations in 2025 as well, with these locations representing more than 80 percent of the volume. While some markets remained in a downtrend, Berlin, Düsseldorf and Cologne saw growth compared with 2024. Major transactions were generally thin on the ground, with most transactions in deal sizes ranging between €20 million and €100 million. Growth in this segment was considerable and generated more than half of the total volume. The number of deals brought over the line remained around the year-earlier level, with the average deal size declining by approximately 25 percent.

The proportion of international investors stood at 37 percent in 2025, up 15 percentage points year on year. European investors in particular took advantage of the market phase to secure select properties in established locations. The most active net buyers included high net worth private investors and family offices, as opposed to institutional investors that continued to cherry pick and focused partly more strongly on other asset classes

Outlook for the full year 2026
“As far as the office segment is concerned, we anticipate an ongoing, gradual recovery in the investment market. A well-filled deal pipeline, including several large-scale landmark transactions in the core and core plus segment, could provide stimulus if implemented successfully and give a strong boost to transaction activity in 2026,” Lemli states. “What is more, office properties in top locations could again be perceived more strongly as a stabilizing component in institutional portfolios against the backdrop of growing uncertainty and compared with alternative asset classes such as equities and bonds.”

While the prime yields for prime office are likely to hold steady, total returns are targeted first and foremost via rental growth, asset management and rental income, most especially in CBD locations where supply is tight. By contrast, aside from prime property, further differentiation by location, property quality and ESG standard can be anticipated. In this case, rising purchase price returns may be necessary to offset the risks arising from vacancy, capex and repositioning.