Mid-size deals drive German residential portfolio market

The German market for residential portfolio transactions showed signs of stabilization in the summer of 2025, according to NAI apollo. 

Frankfurt - Nai Apollo

Transaction volume reached around €2 bn in the third quarter, consistent with the previous quarter, although 25.3% lower than in 2024. However, the year-to-date volume of €6.3 bn exceeds the previous year's figure by 6.1%, with 42,600 residential units sold, already surpassing the full-year result for 2023.
Mid-size portfolios and project developments saw increased market activity. Open-ended and special funds remained the primary buyers, while project developers and contractors dominated the seller side. There was a notable increase in foreign capital, particularly focused on large-volume portfolios.
While the economic outlook remains uncertain, transaction activity is expected to remain stable, driven by mid-size portfolio deals. Investments in project developments and long-term strategies with a "manage-to-green" approach are still in demand. Further portfolio adjustments by larger property companies are expected to contribute to market recovery in 2026. Demand is focused on mid-size portfolio volumes and large metropolitan areas, as well as project developments and newly built properties in the core and core-plus segments, with capital flowing into portfolios with value appreciation potential. The segment between €25 mln and €50 mln stood out, with traded volume growing by 145.1 % to €1.5 bn, and deals in the €50 mln to €100 mln range also increased, with sales rising by 46.8 % to €1.1 bn.
Open-ended funds and special funds made up 19.6% of the market share. Domestic investors accounted for €3.9 bn of the total volume, while international buyers increased their purchase volume by 71.2 % to €2.4 bn. Project developments and contractors made significant gains with their volume rising by 39.8 % year-on-year to €2.8 bn. Transaction volume from forward deals climbed by 17.5 % to €2.1 bn.
Despite economic uncertainties, the German residential portfolio transaction market remains in demand, especially among international investors. While large-volume deals have been rare recently, mid-size portfolios are increasingly dominating transaction activity. A more significant upturn in transaction volume is not expected until 2026, with an investment volume of less than €10 bn being forecast for 2025.