German investment market heading for new record

A total of EUR 12.13 bn was invested in commercial property in Germany during the first quarter of 2007, which points to a new record likely being reached in the full year. The investment market is more than 20% up on what was already a good result in 2006. If residential portfolios and non-performing loans are included, the aggregate sum invested between January and March was EUR 17.1 bn, according to a survey by commercial property consultant Atisreal.

Of the total of EUR 12.13 bn invested in commercial property, portfolio sales accounted for EUR 6.83 (56%) and single transactions for around EUR 5.3 bn (44%). 'It is notable that single deals have gained significantly in importance and that turnover is no longer dominated so strongly by portfolios as in 2006,' Piotr Bienkowski, managing director of Atisreal Germany said.

In terms of distribution according to different types of property, investment turnover was headed by office buildings (over 48%), followed by retail properties (almost 21%). The mixed category of other commercial properties (such as hotels, healthcare and leisure facilities) made up over 28%. Logistics properties accounted for around 3% of aggregate turnover.

Atisreal said that of the EUR 6.83 bn that went into portfolios in the first quarter, over EUR 3.03 bn (44%) was for office properties and EUR 1.22 bn (18%) for retail packages. Investments in individual properties posted a 72% year-on-year rise, to account for EUR 5.3 bn. 'There was extensive investment particularly in prestige properties, such as WestendDuo in Frankfurt or Maximilianhofe in Munich. This trend will continue,' Bienkowski said. Office buildings attracted the biggest share of single-deal investment (EUR 2.81 bn or 53%), followed by retail properties (EUR 1.3 bn or 25 %). Development sites accounted for EUR 368 mln or 7 %), while hotel investment came to EUR 307 mln (or 6%).

Click on the link for more on the survey.