Greif & Contzen Immobilien has published an initial review of the developments in Cologne’s property investment market in 2025. The investment environment has stabilised on the whole, and the total transaction volume was slightly higher than the result recorded for the year before. Greater diversity than in 2024 could be observed on both the demand and the supply side.

Commercial real estate for around EUR 1.4 billion changed hands in Cologne’s investment market in 2025, according to initial analyses. The previous year’s transaction volume, almost 50 percent of which had been accounted for by two particularly large properties bought by the City of Cologne, was surpassed by around 8.00 percent. Far greater diversity could be observed on the demand side. The overall real estate investment environment continues to be affected by rather challenging financing conditions; however, things are considerably more predictable by now. “Long-term mortgage interest rates are not going to decrease further in the foreseeable future, as had been initially hoped. Nevertheless, purchasing prices realised for top-quality office properties have recently been higher than those obtained at the start of the year,” says Thorsten Neugebauer, Head of the Investment Division of Greif & Contzen Immobilienmakler GmbH. “Many investors have by now realised that it is no longer necessarily beneficial for them to keep waiting. Some owners of existing buildings need to address liquidity or refinancing requirements or are in the process of restructuring their portfolios. More properties are offered for sale as a result. Other investors are taking the current market phase with lower purchasing prices as an opportunity to reinvest.” The open-end public fund Deka-ImmobilienEuropa bought the revitalised GERLING GARDEN ensemble in the fourth quarter. The former premises of the Gerling Group comprise two office buildings and a hotel and changed hands for around EUR 200 million. The net initial prime yield for office buildings decreased to about 4.20 percent.

Office buildings are once more the most important asset class
Having accounted for as little as 36 percent in 2024, the office segment that has often played a domineering role in the investment market in the past, was back to a share of around 52 percent last year. This was in part due to a number of large new and refurbished office buildings with creditworthy tenants being sold in the second half of the year. The purchasers of these properties are able to benefit from secure income prospects. One example in this context is the first construction phase of the Reiterstaffel Offices, which was bought by Imaxxam in its role as asset manager. Hotels accounted for some 15 percent of the transaction volume, thanks to the sale of a few large, centrally located hotels. The Swedish investor Pandox bought the Pullman Hotel on Helenenstrasse 14 for about EUR 66 million. Following the collapse of the hotel market during the Covid-19 pandemic, this asset class has by now recovered considerably in line with the recovery of the hospitality industry.

Mixed interest in existing buildings
While buyers can once more be found for favourably located office buildings in mint condition, there is far less demand for older existing buildings that require refurbishment. Prospective buyers tend to request significant price reductions, and many sellers are not yet willing to accept this. The pricing process is still underway in this segment. When it comes to industrial and logistics properties on the other hand, there are numerous investors who are construction experts and are focussing on existing buildings with value-add potential that are available at low prices.

Initial outlook for 2026
A moderate level of property investment activity is to be expected in 2026 on the whole. Real estate financing will remain challenging for the time being, but the market environment and purchasing prices for top-quality properties are at least likely to remain stable for now. Many investors will continue to focus on properties that generate predictable income, such as residential complexes, premium office buildings and hotels that produce good profits. Industrial and logistics properties will also continue to be in demand. A certain pressure to reduce prices is likely to persist for older office buildings in need of modernisation. It is foreseeable that this will impact plans to sell such properties, especially in less popular neighbourhoods. Nevertheless, it is to be expected that further properties will be offered for sale, as some owners of existing buildings will be seeking to improve their financial situation by selling properties. In addition, restructuring processes in the industrial sector and supply industry are going to continue, and it is likely that there will be further insolvencies; these developments will also lead to properties being sold. “Properties that generate reliable rental income and high-yielding value-add properties will continue to attract interest,” Thorsten Neugebauer concludes, adding: “If the economic situation improves in the second half of the year thanks to the hoped for political stimuli and reforms, this will encourage recovery in the investment market, too.”