German investment turnover falls 29% in Q1, Artisreal

A total of EUR 8.58bn was invested in Germany in the first quarter of 2008. This represents a fall of 29% on the equivalent period last year, property consultant Atisreal said in its latest research published on Wednesday. Of this figure, portfolio sales accounted for EUR 4.98 bn (58 %) and single transactions for EUR 3.6bn (42 %).

'Several sizeable sales transactions towards the end of the quarter, such as Arcandor, Deutsche Post and the Sony Center, had a positive late influence on the result. Fundamentally, though, investment activity is considerably more restrained than in the record year of 2007. But this is due less to any lack of interest on the part of investors than to the now more difficult conditions which govern financing arrangements,' commented Piotr Bienkowski, managing director of Atisreal Germany.

The survey found that retail investment topped the list of investment categories, recording 41% of the total (including the sale of the Arcandor portfolio on a pro-ratio basis). Office buildings accounted for just over 30% of transactions. Bucking the trend, logistics properties posted an increase in investment making up 10% of total turnover.

Among portfolio investments, retail properties represented the most important asset class, with over 45% of the total, due primarily to the Arcandor deal, the firm said. Office buildings topped the list of individual transactions (29%), followed by retail properties (27%). Individual logistics centres also generated a greater volume of investment than previously (12%).

Although investment in the six most important German investment locations (Berlin Cologne, Düsseldorf, Frankfurt, Hamburg and Munich) fell 41% to EUR 3.08bn in Q1, Atisreal said it was still higher than the relevant total achieved in 2006. Berlin attracted the most investment, EUR 1.17bn followed by Munich EUR 566 mln, Frankfurt EUR 413mln and Hamburg EUR 382mln. Cologne almost equalled result for 2007, EUR 292mln and the total invested in Düsseldorf was EUR 261mln.

'Investment turnover during the rest of this year will depend primarily on the rate of recovery of the financial markets' said Piotr Bienkowski, adding that he believes there are plenty of investors ready to buy and interesting products ready for sale to generate another strong investment year.