INVESTMENT MARKET

For real estate investors, 2021 was a challenging year. In particular, the year was shaped by yields that continued to decline and the coronavirus pandemic.

There continues to be no alternative to real estate as an asset class. Accordingly, net initial yields fell further in most asset classes – contrary to the expectations of many stakeholders, who had expected yields to stagnate. Investors once again focused in 2021 on real estate with top quality location and property criteria that can be let with little risk. This led to high prices for both office and residential properties, with expensive properties becoming ever more expensive.

Net initial yields for top office properties reached a new alltime low of 1.9 %. One reason for this is the shift by investors that are no longer competitive in the residential market to the office market. As a result, the yield for top-quality office properties fell in 2021 for the first time to almost the same level as the yield for comparable residential properties. The latter returned a yield of 1.85 % last year. Logistics real estate also attracted increasing interest in 2021, representing another shift by investors.
"Is there a new top class among the real estate investment segments? Office properties in A-locations were the absolute frontrunner in 2021."
Annica Anna Pohl
Head of Marketing