In Germany, getting funding for PhD studies is the difficult part. Once funding is secured, being admitted as a PhD student is normally the easy part.
When the professor wrote "capacity to take on new students", she/he most likely meant financial capacity. So she/he doesn't currently have own funding sitting around that could be used to pay you when you start in the fall. And while that is the case, it makes little sense to have a closer look if you are a suitable PhD candidate until some grant proposal got accepted or so.
Apart from funding via a professor (grant funding or institute-based funds they have control over), there are however sometimes also coordinated programs as it seems to be the case. In these, your application will need to compete against other applications (of potential PhD students who would be working with other professors).
Because the answer was so short, it looks like the professor did not have a detailed look at whether you would be suitable PhD candidate in his/her eyes. This step would probably come later if you decide to submit your application.