With the German economy remaining extremely healthy despite the volatility in the financial markets and concerns surrounding Greece, demand for German commercial property remains very high. The boom did not show any signs of slowing in Q2 of 2015 and even accelerated somewhat further. The transaction volume in the first half-year totalled €23.8bn - an increase of one third compared to H1 2014.

A glance at the individual sectors illustrates that the economic impetus is increasingly attributable to German consumers. More than €9.5bn was invested in retail property during the first half of the year, relegating office property into second place.

High pressure to invest was not least responsible for investment activity increasingly shifting towards larger transactions. The first half of 2015 witnessed almost fifty deals for more than €100m. This was more than twice the amount completed in the first half of the previous year, and the trend is likely to continue. Dynamics is also increasingly high in the portfolio market.

The transaction volume for German commercial property portfolios totalled €16.3bn for the 12 months to the end of June. This represents an increase of 37% on the corresponding figure to the end of the first quarter.

^{Source: Savills European Research}

The transaction volume for German commercial property portfolios totalled €9bn in the first half of 2015. This represents an increase of 23% on last year’s figure. There is significant momentum on both the supply and demand side. The high pressure to invest is increasingly attracting investors to the portfolio segment and owners are taking advantage of the favourable market environment to bring portfolios to the market. Foreign investors were on the purchaser side in two out of three portfolio transactions.

Furthermore, since their acquisitions were above average in size, this group accounted for almost 85% of the overall transaction volume. Investors from North America and the United Kingdom in particular are surging into the German portfolio segment. On the vendor side, domestic investors were significantly more active than they were as purchasers, accounting for 50% of disposals. As a result, this group made net portfolio disposals totalling approx. €3bn during the first half of the year.

^{Source: Savills European Research}

Against a background of continued low interest rates and increased volatility in the equity and bond markets, investors may feel compelled to increase allocations to real estate yet further within their portfolios. In any event, the transaction volume is likely to reach €50bn by the end of the year and may even surpass the record volume of €55bn, which was set in 2007.