Continued restraint in the third quarter – transaction volume remains below €1 billion.
(Cologne, October 4, 2022) Following a record-breaking start to the year with a transaction volume (TAV) of around €762 million in the first quarter of 2022 and the abrupt downturn in the second quarter (TVA: €65 million), the situation on the Cologne investment market has not really eased in the past three months.
Following the weak performance in the second quarter, the third quarter of 2022 did not contribute to easing the pressure on the Cologne investment market. Although investment picked up again, with a transaction volume of only €150 million, the total transaction volume of €977 million in the first nine months, the total transaction volume is still well below the performance of recent years. The largest transaction in the third quarter was the sale of the Olivandenhof in the city center. Globetrotter is the anchor tenant of the property.
The volatile interest rate situation is contributing to the protracted sales processes. While interest rates were still falling slightly at the beginning of the third quarter, they have been rising again since August. This has led to rising return expectations among investors. A purchase price adjustment has already taken place in recent months.
Further developments will depend largely on how quickly the price expectations of buyers and sellers converge. We expect many investors to become more active again in the final months of the year. As the time frame for transactions has lengthened significantly, it remains to be seen whether the transactions will actually be completed this year. A stable financial market situation is very important in order to make transactions more predictable again.
In the area of project development, rising interest rates and lower exit factors are compounded by rising construction costs and supply bottlenecks. These factors make calculations unpredictable.
