German retail investment reaches €1.1b in Q1 2026

In the first quarter of 2026, Germany's retail real estate investment market saw a transaction volume of €1.1 bn, a 13% decrease from the previous year.

Retail transaction volume by usage type - CBRE

The top 7 markets gained importance, accounting for 23% of transactions (up 5%). CBRE's analysis highlights a high number of transactions (75) but with smaller average purchase prices. Portfolio deals also decreased by 11 percentage points to 24%.

Jan Schönherr, head of Retail Investment at CBRE, noted that larger deals over €100 mln were rare, with exceptions like the Powerfood portfolio and a majority stake in Leipzig’s Höfe am Brühl shopping centre. He explained that large shopping centres are increasingly attractive to international investors looking for value-add and core-plus properties, while German investors prefer core properties.

Schönherr observed a growing interest in grocery-anchored retail properties due to their stable cash flows and long-term leases, especially given current geopolitical and inflationary concerns. These properties, including local shopping facilities and food discounters, are seen as defensive investments. Retail warehouses and retail parks dominated the transaction volume with a 56% share, followed by shopping centres (22%) and high street properties (14%). Shopping centers are also gaining traction for mixed-use repositioning.

Anne Gimpel, team leader, Valuation Advisory Services at CBRE, stated that purchase price returns remained stable across all retail property sub-segments. Minor changes included a 0.2 percentage point drop in prime yields for high street properties in the top 7 cities (to 4.44%) and a 0.25 percentage point increase for shopping centres in secondary locations (to 7.75%). Prime yields for shopping centres in prime locations, food markets, and retail parks remained stable. The market anticipates potential price adjustments due to geopolitical tensions, economic recovery challenges, inflation, and higher financing costs.

Financing capabilities are influencing transaction momentum, with rising energy costs and supply chain disruptions fueling inflation fears. Higher spreads and construction costs have constrained financing, favouring equity investors over highly leveraged strategies. Consequently, large, leveraged portfolio transactions are uncommon.

Looking ahead, Schönherr expects a market revival with several larger properties in the pipeline, including single assets and portfolios across high street, grocery-anchored, and shopping centre segments.