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Germany’s residential market posted record half-yearly figures of €17.2 bn in the first six months of 2015, more than double the volume for the same period in 2014, according to research by NAI apollo.

Deutsche Annington’s €8 bn takeover of its rival Gagfah in Germany’s largest ever real estate acquisition accounted for a large chunk of the 143.3% year-on-year increase. Deutsche Annington was also involved in the second-largest deal over the period, acquiring the €1.9 bn Südewo portfolio from a consortium led by Patrizia.

The number of transactions increased from 150 in H1 2014 to 185, while the number of residential units traded on the market doubled from 124,500 to 269,400. The average unit price increased by 12.3% from €56,700 to €63,660.

NAI apollo said it expected market activity to remain high in the second half of the year as buyers compete for a limited supply of stock. Prevailing high prices could encourage some investors to exit the market, but there will be plenty of demand for their assets, according to Stefan Mergen, managing partner of NAI apollo valuation & research GmbH.

‘At the same time, further company acquisitions are possible,’ he said. ‘The willingness to invest remains high. The larger listed companies in particular are on the lookout for investment opportunities in order to further expand their market presence.’

Mergen said the transaction volume for the year would almost certainly break the €20 bn mark and could even pass €25 bn if current market conditions are sustained.

Over the first half, Berlin cemented its position as market leader, with 22.2% of all transactions in Germany taking place in the capital, up from 16.7% in H1 2014. Second-tier cities also saw strong activity, including Magdeburg, Delmenhorst, Wolfsburg, Freiburg and Heidelberg.

‘Due to the supply shortage, investment activity remains high in secondary locations of prime cities and goes hand in hand with a growing risk appetite among buyers,’ Mergen said.

Listed property companies and REITs dominated the market, accounting for nearly three-quarters of activity on the purchase (72.9%) and sales (€74.3%) side. Non-listed property companies were involved in 7.6% of purchases, while asset managers and fund managers accounted for 11.4% of sales.

German buyers, led by Deutsche Annington, increased their share of the market to 89%, or €15.3 bn. ‘All large deals, which had a significant impact on the first half of the year, were carried out by German investors,’ said Dr. Konrad Kanzler, head of market research at NAI apollo group. ‘It is therefore hardly surprising that German buyers increased their share of the overall transaction volume by 8.8 percentage points year-on-year.’