GERMANY – Commercial property transactions in Germany totalled €26.4bn in the first half – a 34% increase over the same 2006 period – and should reach €50bn for the full year, US broker Jones Lang LaSalle (JLL) has reported.
In a new study, JLL said 72% of the transaction volume for the first half came from foreign sources of capital.
On the buy side, JLL said asset managers were the biggest group, making up 27% of the volume, followed by real estate shares (15%) as well as private equity and hedge funds (11%).
The real estate adviser also said open-ended property funds were the biggest group of sellers, making up 30% of the volume, followed by asset managers (15%) and companies (12%).
A significant chunk of the transaction volume – €8.5bn – was done in Germany’s biggest cities, including Berlin, Düsseldorf, Frankfurt, Hamburg and Munich, headed by the financial capital Frankfurt were properties worth €3.3bn changed hands, followed by Hamburg with €1.8bn.
JLL’s study also revealed most returns on German commercial real estate were little above interest rates for the euro zone – currently a fraction above 4%.
The average return for office properties in the aforementioned five German cities stood at 4.41%, while that for retail properties was 4.5% but the return on logistics properties was higher at 6.1%.
As a result, JLL predicts that there will be €50bn worth of commercial property transactions – a record level for Germany.
This is lower than the prediction set by DEGI, the property investment arm of German bancassurance giant Allianz-Dresdner, which expects the volume for 2007 could total as much as €60bn.