• The economic recovery should gain greater traction from the second quarter of 2021 onward, thereby ensuring GDP growth of 3.1% for the full year. Monetary policy remains on an ultra-expansive course.
• Germany remains a safe haven, which has also held true during the Corona year of 2020 that closed with the second best investment result ever. Abundant liquidity will ensure yields soften further in 2021.
• Demand for high quality, wholesome and technically enabled space is keeping prime rents on an upward trajectory. Companies are preparing a return to the office with agile workplace strategies.
• The process of change in the retail business has been accelerated by the Corona pandemic. Along with negative effects, the crisis also offers opportunities that need to be seized.
• e-commerce and growing demand from the industrial sector that is staging a recovery continues to underpin strong momentum in the logistics market. Repositioning potential for brownfield developments.
• The hotel market that has been hard hit by closures due to the pandemic is benefiting from its traditionally high share in domestic travellers, which suggests a quick rebound.
• Regions outside integrated suburban areas of the metropolises are becoming increasingly desirable as locations to live in and are heightening investor interest in properties on the fringe of the metropolises and in large cities below the top tier.
• The defensive nature of the healthcare and social real estate asset class is eliciting the growing interest of investors, also thanks to progress made with professionalization and greater market transparency.
• The advance of digitalisation, coupled with the Corona pandemic, is upping need for computing capacity and increasingly putting data centers as an alternative asset class on investors’ radar.
• The European Union aims to be climate neutral by 2050. The real estate industry is viewed as key to achieve the zero emission target.

Certain optimism is increasingly spreading among national and international real estate investors. For example, 54% and 59% of the German and European investors surveyed by CBRE intend to invest significantly more in 2021 than in the Corona year 2020. In this context, the German real estate market is becoming increasingly important, confirming its reputation as a 'safe haven' and reflecting the particular stability of the market in an international comparison, even in the current crisis and especially afterwards.

This year's survey also provides other important insights:

• Both national and international investors rate the prospects for a quick recovery of the real estate investment market after the pandemic in Germany best. With Berlin, Frankfurt, Hamburg and Munich, four German metropolises are among the top ten most attractive European cities for real estate investments.

• Despite the decentralisationand flexibilisationof workplace strategies accelerated by the pandemic, investors continue to prefer the office asset class, followed by residential and logistics.

• Market participants are focusing their portfolio strategy even more on core and core plus properties, indicating a pronounced risk aversion in the current market environment and a preference for yield stability and income security.

• The majority of German investors (69%) do not plan to invest outside Europe.

• Almost all investors expect price reductions for shopping centres and hotel properties.

• COVID-19 has increased investor focus on tenant credit and ESG criteria.

The CBRE Investor Intentions Survey 2021 was conducted between 2 December 2020 and 19 January 2021. From Germany, 286 investors participated in the survey, which asked respondents a series of questions about their acquisition plans and their preferred strategies for sectors and markets in 2021.

• Office property strongest asset class despite pandemic
• The German office real estate investment market achieved one of the best results in recent years 
• Office properties, measured in terms of relative share of the total transaction volume, remained the dominant asset class 
• 80% of investments in office properties were in the top 7 cities 
• The share of international investors dropped 10%-points to 39% compared to 2019 due to travel restrictions
• The average prime yield in the top 7 markets for office properties at new record low

The market for data centers in Germany

• Growth drivers and growth potential in Germany
• Use of data centers
• Construction and location requirements of data centers
• Different types of data centers
• The data center market in Germany
• Typical types of contracts and transactions
• Future development of the German data center market

• Healthcare properties are on their way out of being a niche asset class, but price transparency is still fairly limited and subject to quite different perceptions

• In the light of a persistent ultra-low interest rate environment and the relatively cyclical independence of healthcare related real estate assets, we observe an ongoing accelerated repricing especially of care homes

• Therefore, we estimate that prime yields for care homes to decline by another 25 base points to 4.25% in Q1 2020

• Given the asset class inherent fundamentals and increased liquidity, yields for healthcare real estate will move closer to the values of other well-capitalized, more core-ish real estate asset classes (e.g. hotels, which are currently priced at 3.75%)

• Strong trust in the German real estate market remaining intact
• Transaction volume up by 11% to €56.2bn year on year
• Commercial real estate market at €41.1bn (up 7%), multifamily housing investment market at around €15.1bn (up 25%)
• 53 portfolio transactions of more than €100m each, totaling €25bn – share of portfolios at 53%
• International investors’ market share climbs 14%-points to 48%

• Transaction volume reaches €16.5bn in 2019, a decrease of 6% compared to the previous year
• Investments in construction edge up to €5.5bn
• Share of international investors drops to 13.3%, with German

In 2019, the German hotel real estate market remains very dynamic with a continued demand surplus. The hotel transaction volume in the German hotel investment market stood at €1.64bn in H1 2019, down 14% from the prior-year period. The lack of product on the market is restricting the investment volume and results in a further decline in yields in prime locations. Consequently, investors increasingly buy in B and C locations.

The report provides an overview of:

• European and German hotel real estate market
• Key performance indicators of the German top cities
• Investment volume and prime yields
• Recent transactions
• Future supply and outlook