Hamburg: International interest meets stability
Hamburg is Germany’s second-largest city and an important real estate location. Nevertheless, international investors invest less frequently in Hamburg properties than in Berlin, Munich or Frankfurt. Real estate expert Peter Axmann explains the special features of the Hanseatic city – and thus the bank’s home market.
28 October 2025 | reading time 5 Minutes
Focus of international investors
On a ten-year average, foreign investors account for just over 40 per cent of real estate transactions throughout Germany. Hamburg does not quite reach this figure, typically hovering in the mid-thirties. In the first half of 2025, when there were only a few transactions overall, the share involving international investors was even below 20 per cent. One reason for this lies in the international perception of German markets. Foreign investors tend to focus on more well-known locations and particularly liquid markets. Around 15 years ago, Berlin — the largest city and capital — was discovered as an investment location, with the city being considered inexpensive compared to London and Paris. Frankfurt is highly regarded as a financial centre and international hub, Munich as an economically strong metropolis with high tourist appeal. Although Hamburg has the highest population after Berlin, it is less of a focus for international investors.
Stability instead of volatility
Hamburg is particularly popular with long-term investors, as it is characterised by organic rental growth. Prime rents typically range from €28 to €35 per square metre, showing low volatility. While Frankfurt offers significantly greater potential returns — and corresponding risks — Hamburg offers greater stability and less market volatility. One reason for Hamburg’s stability is its broad economic structure. “There is little vacant space in Hamburg and speculative construction is rare. In addition, companies from many industries are active here”, explains Axmann. The Port of Hamburg is the largest seaport in Germany and one of the largest in Europe. Aircraft manufacturer Airbus and other industrial and logistics companies are based here and the media industry is also strong. This diversity makes the Hamburg metropolitan region less susceptible to sectoral fluctuations.
Many market participants consider the Hamburg property market to be rather boring. One reason for this is that prime rents are less volatile than in some other major German cities. The Hamburg market therefore tends to be more popular, especially in more uncertain market phases.
Peter Axmann, Co-Head of Commercial Real Estate
Focus on value-add strategies
International institutional investors are currently showing increasing interest in value-add properties – i.e. properties with development potential. They are looking for favourable entry opportunities to achieve attractive returns in the short to medium term.
For example, during the last major financial crisis in 2008/2009, a wave of privatisation saw various residential portfolios belonging to municipal housing associations purchased and merged into larger portfolios. These were then sold at a profit. Following this approach, we are now seeing renewed interest in such portfolios particularly from Anglo-Saxon investors.
The Free and Hanseatic City of Hamburg did not pursue privatisation trends at the time and therefore has a special housing market structure: the municipal SAGA Group owns over 140,000 residential units and there are also strong cooperatives with a further roughly 140,000 flats. While large housing stocks have been privatised in other German cities and are now in some cases available to international investors, such portfolios are not on the market in Hamburg.
Conclusion
Compared to other major German cities, Hamburg is one of the less volatile and therefore more stable property markets. Peter Axmann sums it up: “For internationally oriented investors who are usually looking for faster value appreciation and larger portfolio transactions, Hamburg may seem less interesting. However, the Hanseatic city is often preferred by long-term investors such as insurance companies, family offices and pension funds.”