Just under EUR 60 bn was invested in German commercial real estate last year, 20% up on 2006. The transaction volume in the six most important German office locations - Berlin, Cologne, Düsseldorf, Frankfurt, Hamburg, and Munich - posted an even sharper year-on-year rise of 44% in to finish at EUR 30.66 bn in 2007, according to Atisreal.

Just under EUR 60 bn was invested in German commercial real estate last year, 20% up on 2006. The transaction volume in the six most important German office locations - Berlin, Cologne, Düsseldorf, Frankfurt, Hamburg, and Munich - posted an even sharper year-on-year rise of 44% in to finish at EUR 30.66 bn in 2007, according to Atisreal.

The full Investment Market Report 2008 will be published by the property adviser at the end of February.

'Despite the repercussions of the crisis in the financial markets, this new record result is almost as high as had been anticipated at the mid-year point. Investor interest in German real estate remains strong, even though the relevant conditions have changed somewhat,' said Piotr Bienkowski, managing director of Atisreal Germany.

More than half (52 %) of total turnover in commercial property went into office buildings, Atisreal said, as the focus on the segment was even greater than the high demand in 2006.

In addition to strong result for commercial property, more than EUR 15 bn was generated by sales of residential portfolios (+18 %). Non-performing loans, on the other hand, played only a subordinate role last year, attracting investment of just EUR 220 mln.

The proportion of foreign investors fell from over 76% in 2006 to around 69% last year. '2008 is likely to bring a further increase in the proportion of German investors. In addition, we expect investors with a higher equity backing to play a more important role in investment activity than in the two previous years. So the investor landscape will change somewhat. For this reason, we anticipate that long-let prime properties in good locations will become even more significant as investment products,' Bienkowski said.

'On a long-term comparison, 2008 will be another above-average investment year,' he forecast. 'Germany remains one of the most favoured investment locations in Europe and offers relatively attractive conditions. However, this year will not bring a repeat of the record 2007 result, one reason being that institutional investors, in particular open-ended funds, have now largely concluded their sales of large portfolios. The yields reached at the end of 2007 are for the most part likely to stay in place in the first half of this year. We expect to see further rises only in selected market segments.'