UK adviser Savills expects further growth in the value-add and opportunistic segments in Germany this year after the total transaction volume for mainland Europe's largest commercial property market reached €30.4 bn in 2013.

UK adviser Savills expects further growth in the value-add and opportunistic segments in Germany this year after the total transaction volume for mainland Europe's largest commercial property market reached €30.4 bn in 2013.

This represents a rise of 20% year-on-year and the highest investment volume since 2007 when a total of €56 bn was achieved, the adviser said. As in 2012, the final quarter of 2013 was by far the strongest with an investment volume in excess of €11.4 bn.

Savills expects a similar overall level of activity in 2013, although activity on the higher risk end of the market is likely to increase further.

According to Andreas Wende, head of investment at Savills Germany, last year's increase was facilitated by Germany's strong economic parameters combined with a low interest rate environment. 'In 2013 we began to observe a higher risk appetite from investors and we expect this trend to continue in 2014.'

Increased investment into office properties is evidence of this rising risk tolerance, Savills said. Investment into this sector rose by 61% year-on-year to €13.3 bn pushing retail transactions, which have recently been the preferred asset type, into second place. Due to a lack of supply and despite ongoing strong demand the volume of retail deals only recorded a slight rise year-on-year of 1% to just under €10 bn. This corresponds to a market share of 33%.

Investment into development sites and hotels also grew by 22% to €1.2 bn and 21% to €1.4 bn, respectively.

Both domestic and foreign investors favoured Germany’s top six markets in 2013, pushing the market share of these locations to 55%, up from 50% in 2012, according to Savills. The transaction volume invested in these top six locations amounted to €16.7 bn in 2013, representing a 31% increase on the previous year. Munich ranks top accounting for a transaction volume of €4.63 bn, followed by Frankfurt (€3.45 bn) and Berlin (€3.22 bn). The German capital, which recorded an exceptionally strong transaction volume in 2012, saw a 25% year-on-year decrease in 2013, whilst the remaining locations recorded significant increases in turnover.