Greif & Contzen Immobilien has published its full report about Cologne’s investment market in 2025. The transaction volume across all real estate segments rose to around EUR 5.2 billion, which corresponds to a year-on-year increase of some eight percent.

Some key market parameters such as purchasing prices and mortgage interest rates stabilised over the course of 2025, giving investors greater planning reliability. In addition, some owners of existing buildings have been affected by rising liquidity and refinancing demands since the 2022 interest rate turnaround. More and also larger properties entered the market as a result. At the same time, an increase in investor demand could be observed on the buying side. A number of large residential complexes were sold, as well as some commercial properties with purchasing prices in the two and even three-digit million euro range. “This return of large-scale transactions is a key signal for Cologne’s investment market. These deals show that there are investors who are confident that they can obtain sustainable yields with large-volume investments in the office segment,” explains Thorsten Neugebauer, head of Greif & Contzen’s investment division. For such large-scale investments to be realised, properties do, however, need to be in a good to very good location, be in mint condition and have secure income from existing rental agreements with creditworthy tenants (core properties).

Residential property is in demand again
Buyer interest in Cologne’s residential property market increased further against the background of low construction activity and steadily rising rents. Investment activity in the apartment buildings segment increased considerably by some 36 percent in 2025 to EUR 1.07 billion. Both the number of transactions and the average purchasing price went up. Owing to high construction costs and regulatory requirements, prospective buyers of existing buildings requiring energy-related refurbishment were still likely to expect price reductions. According to initial estimates, a transaction volume of some EUR 1.8 billion was generated with condominiums, which means that the volume was close to the 2021 record level of EUR 1.9 billion. Asking prices for newly built condominiums in popular locations remained stable at a high core range of between EUR 7,000 and 9,000 per square metre. Rents for apartments have risen to a level that is even higher than these financing costs, encouraging people to buy residential real estate for owner-occupation.

Office buildings are back to dominating the commercial property segment
The transaction volume generated with commercial property also increased by some 8 percent, from around EUR 1.3 billion to about EUR 1.4 billion.

The market was once more dominated by yield-oriented investors in 2025. Top transactions included the sale of the construction project Friedrich und Karl with over 45,000 square metres of office space for more than EUR 260 million, and the sale of the mixed-use revitalisation project GERLING GARDEN for some EUR 200 million. In 2024, the City of Cologne had been the most noteworthy buyer of properties in this size category.

The share of the commercial property investment volume accounted for by office buildings rose to around 52%, following two years in which this asset class had played a smaller role. For the first time since 2022, the prime yield decreased to 4.20% in the office segment. A number of large hotels also changed hands. Deka bought the Southern Cross ensemble with a total of 479 rooms in Deutz for about EUR 94 million. In addition to that, the Pullman Hotel in the Altstadt-Nord neighbourhood was sold for about EUR 66 million, and the Senatshotel near Cologne Cathedral that requires revitalisation was also sold. From the investors’ perspective, the hotel market has recovered appreciably, compared to the challenging years shaped by the COVID-19 pandemic. Demand for overnight stays is high once again, and construction activity has also begun to pick up. Investment activity concerning retail buildings and industrial and logistics properties has, however, decreased.

“The expected development of rental income remains the most decisive criterion for prospective buyers, as a general rule. If a property can only be let sustainably following comprehensive restructuring, accordingly lower purchasing prices are to be expected,” Thorsten Neugebauer explains.

Outlook for 2026: recovery continues at a slow pace
Many investors are interested in buying real estate again, not only apartment buildings and condominiums, but also hotels that are performing well and modern office buildings in attractive locations and with good tenants, as well as industrial and logistics facilities. On the supply side, many owners of existing buildings are still affected by liquidity and refinancing requirements, and capital investors and industrial companies continue to be in the process of restructuring their real estate portfolios. Investors with expertise in the area of construction and sound financing sources will be able to benefit from lower purchasing prices. The 2025 transaction volume could be matched this year. An increase is only likely if a number of large top-quality products are traded. Mortgage interest rates are, however, unlikely to decrease for now, and financing conditions are expected to continue having a restrictive effect. Purchasing prices are therefore unlikely to increase in most asset classes. In consideration of prospective tenants expecting higher quality office space, the question of future rentability is gaining importance concerning older office buildings that have not been modernised to date. Prices could even decrease further here. “Further development of the economy and demand for commercial space are decisive aspects in particular with regard to office buildings, but also for industrial and logistics properties, for example. Many owners of existing buildings will need to carefully address this issue to determine the efforts required for adapting their properties to these new requirements,” Thorsten Neugebauer summarises.