Savills expects the transaction volume for the full year to exceed €15bn. Five investors were responsible for almost 45% of all transactions to date, namely ZBI, Gewobag, Adler Real Estate, Union Investment and Deutsche Wohnen.

Matti Schenk, Senior Consultant, Research, Savills Germany, says: “If all purchases by public housing associations are added together, this investor group was by far the most active in the German residential investment market, with a total of almost €2.4bn. Expanding or establishing municipal housing stock is a stated objective of many German municipalities, meaning that acquisitions by the public sector are likely to continue.”

“The fact that the overall residential transaction volume has remained constant compared with last year is largely attributable to a few major disposals as well as extensive acquisitions by the public sector,” says Karsten Nemecek, Managing Director Corporate Finance – Valuation for Savills Germany, adding: “There remains a growing uncertainty among investors with regard to the regulatory measures that have already been passed and those that remain on the table, particularly in respect of Berlin.”

Nevertheless, Berlin was once again the investment capital of the German apartment market. With a transaction volume of almost €4.5bn, the city accounted for almost 37% of the overall volume, compared with a five-year average of just 23%. The transaction volume of private-sector purchasers in the German capital during the year to date has totalled around €2.9bn, representing an increase of 9% year on year. Without the acquisition of 33% of Ado Properties by Adler Real Estate, however, the purchase volume of private-sector investors would have fallen by 29%.

The Berlin market is currently encumbered with significant risks for private-sector investors in the form of regulations that cannot yet be foreseen. “The current discussion surrounding the rental cap makes it difficult for permissible rental levels to be estimated at present,” says Nemecek, adding: “This unpredictability may well deter many investors from acquiring further apartments in Berlin for the time being.”

Over the coming months, the regulations on the table are likely to be the overriding issue continuing to shape the residential investment market. “According to the timetable, Berlin’s rental cap should come into effect in January, with the precise drafting and potential legal challenges still to come, so we can expect a further period of uncertainty,” says Schenk.  

The fundamental data in the apartment market in many regions continues to favour the acquisition of residential property. “In view of the continued growth in the number of households and the further decrease in building permits, the supply shortage in many regions could even increase.” says Schenk, concluding: “Apartment owners can, therefore, expect income and capital values to remain stable in many locations. However, this is increasingly subject to the proviso of further regulation.”
The corresponding “German Investment Market in Minutes” and key investment market indicators can be downloaded here