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The BNP Paribas Real Estate Q4 2025 Investment Market Berlin report covers Berlin's real estate transaction volume of €3.25 billion, down 8.5% from the previous year but slightly exceeding the three-year average. The report notes that Berlin maintained its position as the leading A-location in Germany, with the largest transaction being the Upper West sale for over €400 million, and reports prime yields of 4.25% for offices, 3.85% for premium retail, and 4.50% for logistics properties.

Frankfurt's commercial real estate investment market recorded €770 million in transaction volume during 2025, a 52.6% decline from 2024, with no deals exceeding €100 million and a weakened office segment representing only 40% of investments compared to its long-term average of two-thirds. The document notes that a substantial pipeline of large-volume properties including Opernturm, Westend Duo, Trianon, and the Wave are in advanced negotiation stages, and forecasts a significant recovery in 2026 driven by strong office leasing fundamentals with 611,000 square meters of space concluded.

The Berlin logistics market recorded 425,000 square meters of take-up in 2025, representing a 55% increase compared to 2024, driven primarily by larger deals above 20,000 square meters which accounted for 35% of total take-up and by strong demand in central, inner-city locations. Prime rents for logistics space with unit sizes above 5,000 square meters rose to €8.25 per square meter, while significantly higher rents were achieved for smaller light industrial spaces within Berlin's city boundaries.

Berlin's office market recorded 362,000 sqm of take-up in the first three quarters of 2025, approximately 14% lower than the prior year, though demand in smaller segments up to 5,000 sqm reached 320,000 sqm, the highest level since 2019. Prime rents increased 2% in Q3 and 4% year-on-year to €47/sqm, with city zones accounting for 60% of take-up and holding 71% of under-construction space.

The Berlin logistics market recorded take-up of 320,000 sqm in Q3 2025, representing a 50% increase year-over-year and returning demand to positive territory after weakness in the prior year, though this figure is 11% below the long-term average when excluding the Tesla plant's outsized 2022 contribution. Rents show a two-tier market with inner-city smaller warehouses exceeding €10 per sqm due to high demand, while large-scale prime and average rents stabilized at €8.20 per sqm and €7.20 per sqm respectively on the city's outskirts.

Frankfurt's office market achieved 457,900 m² of take-up in the first three quarters of 2025, representing 77% growth over the five-year average and 30% above the full-year 2024 result, driven primarily by the Banking and Financial Sector's 151,000 m² contribution and anchored by Commerzbank's 73,000 m² lease of the Central Business Tower. The prime rent increased to €52.00/m²/month (up 7.2% year-over-year), the vacancy rate stood at 11.5%, and Cushman & Wakefield forecasts full-year take-up between 525,000 and 550,000 m² with no further prime rent growth expected by year-end.

Frankfurt's office market recorded 338,600 square meters of take-up in the first half of 2025, representing 86% growth compared to the prior year, with the vacancy rate at 11.1% and prime rent reaching €51.00 per square meter per month as of Q2 2025. The business climate index in Hesse improved to 95 points in early summer 2025, driven by a special government fund decision, though companies identified general economic conditions, domestic demand, and labor costs as primary risks to their development.

The Frankfurt logistics market achieved 251,000 square meters of total take-up in the first half of 2025, driven by a strong second quarter of 188,000 square meters that exceeded the ten-year average, with major deals including Eli Lilly's 50,000 square meter pharmaceutical production facility and large-volume transactions above 20,000 square meters representing 39.6 percent of activity. Prime rents remained stable at €8.20 per square meter and average rents at €7.00 per square meter, both showing year-over-year increases of 3.1 percent and 4.5 percent respectively, while the market faces ongoing supply shortages in high-demand areas despite the momentum in large-space leasing.

Europe's hotel construction pipeline reached 1,731 projects comprising 255,354 rooms at Q1 2026, representing a 3% year-over-year increase, with the early planning stage hitting a record-high 604 projects and 86,128 rooms. The United Kingdom, Turkey, Germany, France, and Portugal account for 46% of projects in the region's pipeline, and Europe is forecast to see 319 new hotels with 44,156 rooms open by the end of 2026.

Europe's hotel construction pipeline stood at 1,731 projects comprising 255,354 rooms at the close of Q1 2026, representing a 3% year-over-year increase, with early planning stage projects reaching a record high of 604 projects/86,128 rooms. The report forecasts 319 new hotels with 44,156 rooms to open across Europe by year-end 2026, with the United Kingdom, Turkey, Germany, France, and Portugal accounting for 46% of the region's pipeline projects.

In its 23rd edition, the report found sentiment shifting from cautious optimism to pragmatism, with the share of leaders concerned about deglobalisation more than doubling to 70 percent, while London, Madrid, Paris and Berlin led the city rankings.