A year on from the start of the COVID-19 crisis, Germany’s office market is continuing to show its resilience.

Catella Group has said that investment demand is ensuring stable returns, while the low supply of space in many locations is only leading to a marginal increase in vacancies. The average prime yield in Germany’s top seven locations (Berlin, Cologne, Düsseldorf, Frankfurt, Hamburg,  Munich and Stuttgart) remains below the 3 percent mark at 2.83 percent, due to what Catella describes as an “unabated” high demand for core properties. Berlin and Munich have the lowest average prime yields of the big seven cities, at 2.6 percent each, while Hamburg has seen the largest decline over the 12 months between January 2020 and January 2021 (at 15 basis points), leading to an average yield of 2.7 percent.

Further average drops in yields over 2020 have been observed in the country’s B (–65 basis points) and C (–111 basis points) city markets, where high inve