The German commercial real estate market is on the upswing. At least a little bit. This was also evident recently at Expo Real, Germany's most important real estate trade fair in Munich. In view of the burgeoning hope for a market recovery, constructive discussions replaced the pessimism that had prevailed in the previous year. Nevertheless, the transaction figures for the first nine months signal that this hope should be viewed with caution. According to major brokers JLL and CBRE, sales volume rose only slightly to just under 24 billion euros.

For JLL, this confirms the moderate upward trend. „We see light at the end of the tunnel,“ says Konstantin Kortmann, CEO of JLL Germany & Head of Capital Markets. For the year as a whole, the transaction volume could even be slightly higher than last year. This is particularly true if some large-volume deals currently being negotiated are concluded by the end of the year.

However, JLL does not entirely share the optimism of Marcus Lemli, Head of Investment at CBRE in Germany, who believes that the German real estate investment market has „recently gained further momentum“ and led to a „slow market recovery.“ JLL prefers to speak of a gradual stabilization. Karsten Nemecek, Deputy CEO Germany at Savills and responsible for the Capital Markets division, even warns: „The recovery is fragile and, given the unstable conditions, a sustainable turnaround has not yet been achieved.“

The uncertain situation is due to various, sometimes contradictory factors. On the one hand, there is the weak economy in Germany and geopolitical conflicts; on the other, there is the stable interest rate environment and the German government's investment program. Banks now seem to be more willing to finance projects again—something that was a no-go for almost all institutions until recently. However, this does not mean that banks have become more carefree and no longer see the risks – quite the contrary, according to Helge Scheunemann, Head of Research at JLL Germany. „In the commercial sector in particular, the proportion of non-performing loans has risen, driven mainly by the office segment.“

Added to this is the wave of maturities rolling in commercial financing. Scheuermann expects refinancing issues to continue to gain importance in 2026. However, he does not expect emergency sales across the board. Last year and this year, only about 35 to 40% of transactions were due to liquidity and (re)financing problems or pressure from investors.

Nevertheless, financing options and conditions remain limited overall, warns Michael R. Baumann, Head of Capital Markets Germany at Colliers. At least banks are competing with each other again for financing crisis-proof top products.

So what is currently being traded on the German commercial real estate market? From January to September this year, residential real estate was once again the most popular choice. Around one third of the transaction volume was accounted for by this type of use. Individual deals involving core properties worth between 10 and 50 million euros were particularly in demand. According to JLL, around one in four deals was a forward deal involving advanced project developments, particularly outside the major cities, in B cities such as Hanover, Karlsruhe, and Lübeck. Only four out of ten residential transactions involved supra-regional portfolios. According to Scheunemann, this reflected the limited supply of such properties.

In 2025 as a whole, residential properties and portfolios worth around 10 billion euros could be traded, roughly the same as in the previous year. According to JLL, this is due not only to relatively stable lending rates of 3.6 to 3.7%, but also to the increasing activity of state banks and mortgage banks. Meanwhile, savings banks are also granting more loans thanks to higher loan-to-value ratios. In addition, there are debt funds that are keen to refinance large volumes and offer loan-to-value ratios of 80 to 85%. According to Scheunemann, this indicates an increased willingness to take risks and an improved liquidity situation on the market.

The main buyers were asset and fund managers and municipal housing associations. On the seller side, open-ended real estate funds stood out, driven by share redemptions. The share of foreign investors in the German residential real estate investment market rose to 28% in the first three quarters – ten percentage points more than in the same period last year.

More and more foreign investors, mainly from Europe but also from North America, were interested in commercial real estate as a whole, beyond the residential segment. According to CBRE, they accounted for 46% of the total volume in the first three quarters. In the same period last year, the figure was only 37%. North American investors led the way with 15%, followed by British (7%) and Austrian (5%) investors. Foreign investors increased their exposure to 10 billion euros (+29%), while German investors reduced their exposure in Germany to 12 billion euros (-12%).

Office real estate celebrated a comeback this year. The increased return from home offices to the office is making investors more optimistic again. JLL sees this sector in second place after residential real estate with a transaction volume of 4.9 billion euros, albeit at a considerable distance. According to Kortmann, after three quarters, almost 90% of the previous year's total turnover of 5.5 billion euros has been achieved. Smaller and medium-sized deals dominated. However, the number of transactions with a volume of more than 100 million euros fell from 49 in the same period last year to 27.

Retail and logistics follow closely behind in investor favor, each with a transaction volume of 4.2 billion euros. In retail, specialist stores remain at the top of the list. However, shopping centers appear to be making a comeback. Wealthy private clients and family offices were the primary buyers in the upscale retail and top office sectors. Insurance companies and pension funds appear to be continuing to wait and see. According to JLL, the logistics sector is suffering from the uncertain international trade situation, which is why sales declined and this type of use was the only one with a lower transaction volume than in the same period last year. However, according to JLL's chief researcher Scheunemann, new opportunities are emerging thanks to the reinterpretation of defense and security: „Numerous funds are rethinking and redefining their ESG guidelines.“ This could lead to increased demand for industrial and logistics space.