Investor Guide
2026-10-10 09:14

Nettoanfangsrendite (net initial yield): After Costs, Not Before

The net initial yield (Nettoanfangsrendite) is the annual rent less the owner's non-recoverable costs, divided by the full purchase cost: the price plus real estate transfer tax, notary and land-registry fees and the broker's commission. Institutional investors compare properties on this measure, and it can sit well below the advertised figure: a store offered "at 5%" yields about 3.9% in our example.

What it is

It is a market measure, not a legal term. The numerator is net operating income: the rent less the costs the lease does not allow the landlord to pass on, above all for roof and structure (Dach und Fach). The denominator is everything the investor paid for the property. The gross initial yield (Bruttoanfangsrendite) is rent alone divided by the price — the inverse of the price multiple (Kaufpreisfaktor): 20 times annual rent equals 5.0%.
Exhibit 1. Owner's costs and acquisition costs turn an advertised 5.0% into 3.9%
Step
Income, € a year
Invested, €
Yield
Rent to price
500,000
10,000,000
5.0%
Less non-recoverable costs, 15% of rent
425,000
10,000,000
4.25%
Plus acquisition costs, 9.45% of the price
425,000
10,945,000
3.9%
The example is our calculation from Parts 10 and 11 of the series German Prime Retail.

Why it matters to investors

Sellers advertise the gross yield; the net yield is what earns money. The gap has two sources. First, the costs that stay with the landlord: in our experience, 8–15% of net rent for a new supermarket with a modern lease (Part 10). Second, acquisition costs, which depend on the state: real estate transfer tax (Grunderwerbsteuer) ranges from 3.5% of the price in Bavaria to 6.5% in North Rhine-Westphalia.
The whole market prices on net initial yield. In the third quarter of 2026 BNP Paribas Real Estate put it at 5.00% for prime supermarkets and discounters, against 4.90% at the end of 2025, and expected a further rise by year-end. For retail parks it gave 4.75%. Ten-year German government bonds yielded 3.55% on 7 October 2026. Brokers measure differently: CBRE puts prime food stores at 4.6%, so compare one broker's data at one date (Part 1).
Yield also sets the price: at an unchanged rent, value is inversely proportional to it. The rise in prime retail-park yields from 3.50% at the end of 2021 to 4.75% in September 2026 cost owners about a quarter of their properties' value (Part 12).

What to check

• Which yield the seller quotes — gross or net — and which costs it has deducted.
• The non-recoverable costs under the actual lease: roof, structure, car park, management, insurance.
• Acquisition costs in the state concerned, including the broker's commission if the buyer pays it.
• The source and date of any market benchmark: a comparison makes sense only with the same broker's data for the same quarter.
• The basis of the calculation: the current net rent under the lease, not the rent expected after indexation.
Related terms: Kaufpreisfaktor · Betriebskosten · Grunderwerbsteuer · Core, Core-plus, Value-add
Sources: BNP Paribas Real Estate, German retail investment market reports for Q4 2025 and Q3 2026; CBRE, retail investment, Q3 2026; Deutsche Bundesbank, yield curve (7 October 2026); state laws on the Grunderwerbsteuer rate; Gordon Real Estate Group, "German Prime Retail", Parts 1, 10, 11 and 12. Data as of 10 October 2026.
Photo: Alex Block / Unsplash
This entry is general information and not legal or tax advice.