Greif & Contzen Immobilien has published its report of Cologne’s property investment market in the first three quarters. The transaction volume generated with commercial property has decreased considerably, compared to the same period last year. A number of initiated sales processes were put on hold.

At around EUR 320 million, the commercial property investment volume was some 36 percent lower than in the same period last year, when real estate worth some EUR 500 million changed hands. Only a few properties were sold for over EUR 50 million.

Office buildings have always been of great interest to institutional investors. However, interest from potential buyers is still limited largely to well-let, centrally located (core) properties in mint condition. “Qualified demand is much lower when it comes to older office buildings. On the other hand, there is still a large gap between market prices and book values,” says Thorsten Neugebauer, Head of Investment at Greif & Contzen, concerning the rather low interim result at the end of the third quarter. Sales processes regarding a number of existing office buildings were initiated in the first half of the year but were abandoned again, when it showed that the prices that could be realistically obtained were below the book values on the sellers’ side.

Among the biggest transactions concluded in the office space segment in the year to date was the sale of Colonius Carré on Subbelrather Strasse. The building that was sold to Ashtrom Properties features some 13,000 square metres of office space. Office buildings were sold for a total of around EUR 90 million in the year to date. This corresponds to a market share of about 28 percent (2025: approx. EUR 220 million, 44% market share).

In the industrial and logistics properties segment the investment volume more than doubled, year-on-year, from around EUR 35 million to about EUR 75 million. At around EUR 250 million, the transaction volume realised in this asset class in the greater logistics region that includes neighbouring towns and cities was in fact much higher than that.

Difficult economic conditions
Many market players are affected by a challenging business environment. Mortgage interest rates have gone up again in connection with the Iran war, and buying real estate has become less profitable as a result. This has led to an increase in initial yields, which means that purchasing prices have decreased (net prime office yield: 4.60%, logistics: 4.70%). At the same time, refinancing has become more difficult for existing mortgages whose term is coming to an end, and this has been putting pressure on some property owners. Property developers are affected not only by higher interest rates but also by high construction costs, as well as the decline in demand for office space. All of those aspects can explain why demand has declined considerably in the real estate investment market.

Outlook: market development expected to remain on moderate level
Several further small to medium-sized transactions are likely to be concluded in the fourth quarter of 2026. In addition to this, there could be a few large-scale transactions, as intentions were announced to sell, for example, the Coeur Cologne office building near the central station and the revitalised Crown Cologne retail building on Hohe Strasse. In consideration of the low transaction volume realised in the first three quarters, the total investment volume is likely to remain below one billion euros this year (2025: EUR 1.40 billion).

Owing to the growing public debt, economists expect yields for government bonds – and therefore also mortgage interest rates – to increase rather than decrease in the medium term. This means that real estate financing will remain challenging for the time being. Further purchasing price reductions are therefore likely, especially in the case of existing buildings, due to the reasons outlined above.

The likely positive impact of the budding recovery of Germany’s economy on Cologne’s investment market is not expected to take effect before next year. “The market will continue to develop on a moderate level for now. The majority of investment transactions will concern industrial and logistics properties, office and retail buildings in the core segment and apartment buildings, and market activities will still be limited by scarce qualified demand,” says Thorsten Neugebauer, summarising the outlook for the next few months.