NAI apollo: Frankfurt market is stabilising

The investment market in Frankfurt has reached a level of attractiveness that has not been seen for the last eight years, according to the latest office market report of NAI apollo for the first half of 2009.

The yield for prime properties has currently stabilised at a rate of approximately 5.5%. 'This is the highest yield we have seen in the core segment in Frankfurt for the past eight years,' noted Andreas Krone, CEO NAI apollo. In 2008, yields stood at 4.6%, he added. 'Within the past 12 months, prices for prime properties have already fallen approximately 17%.'

Although most potential buyers expect prices to fall even further, Krone said he did not foresee a significant decrease in prices in this segment due to the scarcity of available property. 'Prices have reached a level at which owners want to keep their exclusive office properties - if they don't have to sell due to vacancy or other building specific problems - which is also possible due to attractive (low ed.) interest rates.'

Krone expects to see more local interest in the domestic market. 'Since prices in the UK and France have now bottomed and first-class properties are not available at bargain prices, the focus of investors is now increasingly returning national,' he said. He added that the number of buyers was also increasing.