CBRE Group, Inc. is the world’s largest commercial real estate services and investment firm, with 2017 revenues of $14.2 billion and more than 80,000 employees (excluding affiliate offices). CBRE has been included in the Fortune 500 since 2008, ranking #207 in 2018. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services.


CBRE Global Investors, combined with CBRE Clarion Securities and CBRE Caledon, is one of the world’s leading real asset investment managers with $102 billion in assets under management.

Built up over more than 40 years, our unparalleled platform is focused on real assets, giving our institutional clients access to real estate and infrastructure in the Americas, Europe and Asia Pacific. Our clients benefit from a complete range of investment solutions including equity and debt, direct and indirect, and listed and unlisted strategies.

Trammell Crow Company, founded in Dallas, Texas in 1948, is one of the nation’s oldest and most prolific developers of, and investors in, commercial real estate.The CBRE Global Investors and Trammell Crow Company platforms make up the Real Estate Investments division of CBRE Group.

The Real Estate Investments division is led by
Danny Queenan, Global CEO, Real Estate Investments.


Regularly released content on the state of the real estate and infrastructure industry are produced by our subject matter experts and shared on their blogs. A selection of them can be found below.

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The recent full moon rising over the Oberbaumbrücke in Berlin’s Kreuzberg cast a massive glow of cardinal fire. It provided a stunning backdrop for hip young denizens heading out for a night on the Club Mile or those creative types calling Feierabend after a busy day working in a Mediaspree office. This full moon was in Aries, the first sign of the zodiac, which fledgling astrologers will know is all about initiative. It is why we also call it the Harvest Moon and why some people might get a bit agitated and expressive during its waxing. This star sign is interested in looking forward, energetically and anew. And that is something we attempt to do this month as we cast attention to Germany. Europe’s largest economy has been amongst the strongest performing in Europe over the past decade due to its diverse industrial structure and fiscal prudence. However, fears of a global trade war are raising concerns for the export behemoth. To date there is little evidence of it rattling sentiment in property spheres. On the contrary, occupational markets are in rude health, and investors from both near and far remain committed to putting capital to work in the country. The challenge of course is finding the right stock at the right price. Looking forward, we see compelling risk-adjusted returns across cities, sectors and strategies. Berlin continues to be a top darling, but alternative property sectors in less trendy confines offer promise as well.


Despite ever escalating fears of Sino-American trade disputes spilling over to Europe, and hints of an end to historically low interest rates, lead macroeconomic indicators in Germany remain robust. GDP growth in the second quarter of 2018 is showing no declining trend and consistent with levels broadly in line with the past two years. The current export figures are still solid showing annual growth of around 4%, with activity generated from European and Asian markets. Furthermore, the much-watched Ifo Business Climate Index remained very positive at 103.9 in August 2018 (2015=100). Although moderating from historically high levels from December 2017 (63.3), the Purchasing Manager Index of around 56 (August 2018) shows no signs of a slowing economy, but rather signals further economic expansion over the short term.




Euro Stoxx 50


ECB Policy Rate


15 bps

10-yr. German Bond



Brent Crude

Data points through end of September 2018. Change represents month-over-month change.


Sources: Federal Statistical Office; Deutsche Bundesbank

Andrew Angeli
Najeeb Ahmed

In line with a healthy economic environment, occupier fundamentals in most German property sectors remain positive. Take-up of office space was historically strong in the first half of the year, with all major markets benefiting. The average vacancy rate in the Big 5 office markets is around 4.6% and in CBD locations in Berlin and Munich, it’s even below 2%. This is helping push prime headline rents to levels that many local letting agents thought previously unachievable. Due to the scarcity of land near ports, airports and within existing supply chain networks, there is strong demand for newly developed logistics space. Due to these same forces as well as strong cultural preferences, the housing sector, across tenures, is booming in many German cities. The story for retail is admittedly less positive, however, prime physical retail remains an important distribution channel and the recent downward pressure on rents seems to have eased.


Sources: CBRE Research; Average Big 5


The German commercial property market continues to attract strong investor interest from diverse capital sources. Though to be fair, volumes, like most of Europe were down by a chunky measure in the first half of the year versus what was a strong 2017. At a national level investment was off 31% in H1, versus the same period last year according to RCA. But this masks healthier activity at a city level, some of which actually rose by a small margin. Furthermore, Munich, Frankfurt and Berlin were three of the top five most active European markets during the semester. Of particular note has been activity in the alternatives sector. Student accommodation and senior housing have topped investor intention lists for the past couple of years. While volumes are still small in the context of the national property market, they have been growing at a pronounced clip.


Source: RCA


Given the weight of capital that continues to favor Germany, it is no surprise that prime property yields continue to come under pressure. In the second quarter of the year, office yields in Dusseldorf and Munich fell by 10bps, while the Big 5 logistics markets saw 25bps inward shift. Needless to say, all are at historically dear levels. Because of the robust economic and occupier fundamentals, as well as a shortage of core assets, investors are showing an increasing willingness for riskier investments and shift their focus towards secondary properties. This is most evident in transaction yields in the German office sector which continue to see downward pressure. Such an evolution is in contrast to activity in other European markets.


Note: 12m rolling average. Office and retail transaction yields. Source: RCA


A further indication of the investment climate in Germany is activity from institutional parties. Due to the lack of alternative investments and attractive spreads between real estate and bond yields, German open-ended Spezialfunds are gaining popularity. Insurance companies and pension funds lacking in-house expertise in real estate, are increasingly using these vehicles to invest in domestic and overseas real estate markets. Net-inflows into German Spezialfunds have been on an upward trajectory. After the highest recorded rolling annual figure of €12.55bn in September 2017, these remain stable above the €10bn mark since then. In contrast, the net-inflows of open-ended public funds have flatlined in recent months. The reason for that is not decreasing private investor appetite, but rather the fact that the majority of open-ended public funds have restrictions on accepting new inflows, due to both the scarcity of suitable properties and regulatory limitations.


Source: Deutsche Bundesbank

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This information is for our clients and investors only. Please note that the content of this report is for informational purposes only and should not be viewed as investment advice or an offer or solicitation. Any opinions are solely those of the Strategy & Research Team of CBRE Global Investors and are subject to change without notice, and may not be consistent with market trends or future events. This research is based on current public information that we consider reliable, but we do not represent it as accurate, updated or complete, and it should not be relied on as such.

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