JLL has raised its full-year forcast for investment volume in the German market to €55-60 bn, according to Timo Tschammler, head of the company's German operations.
A level of around €60 bn would mark a record for the German market, he added. 'The previous record was booked last year with €56.8 bn,' he said.
Yield compression is continuing in the German market due to strong demand from international investors across the board, but Tschammler expects overall yields to start moving sideways in the coming period as the capital component becomes less important and rental growth kicks in further.
'Prime rents are rising and the level of incentives has been melting in the past quarter. The buffer is gone now that the level of incentives is down.'
The logistics sector has experienced the deepest yield compression in the past year with average levels at just slightlly over 4% at present. 'That is quite an achievement and logistics yields may well go slightly lower,' Tschammler said.
