The German investment market is well on the way to achieving the EUR 25 bn mark in 2011, based on bullish prospects for the second half of the year and following a strong first half, according to property adviser Savills.
The German investment market is well on the way to achieving the EUR 25 bn mark in 2011, based on bullish prospects for the second half of the year and following a strong first half, according to property adviser Savills.
Savills predicts 2011 investment volumes will exceed the 2010 figure of EUR19.7 bn and may even hit EUR 25 bn. ‘Given a couple of forthcoming large-volume transactions throughout the second half of the year the EUR 25 bn mark indeed seems realistic,’ said Oliver Schinkewitz, managing director of investment at Savills Berlin. He declined to give details on the upcoming deals.
Commercial real estate worth around EUR 11.03 bn was transacted in Germany in the first six months of 2011, up nearly 28% on the EUR 8.64 bn recorded in the year-earlier period. Retail dominated with seven of the 10 largest transactions in this sector representing EUR 4.68 bn or 51% of the total transaction volume.
‘The investment volume of EUR 5.58 bn transacted in Q2 marginally beat the positive result of the first three months of the year. Retail remains the dominant sector,’ Schinkewitz said.
Besides shopping centres in Hamburg and Cologne, various Karstadt properties changed hands. Office buildings were the second-most popular asset class with a 27% share (EUR 3.03 bn), including the sale of Deutsche Bank’s Greentowers to DWS which represented almost a fifth of the total volume invested in office buildings. Development sites accounted for 6% of the total transaction volume followed by industrial and warehouse properties respectively (EUR 0.64 bn and EUR 0.61 bn).
Single-asset transactions accounted for almost 75% of the H1 transaction total. Savills said about EUR 3.08 bn was invested in portfolios with retail accounting for 65%. In terms of location, 16% of the transaction volume was in the Frankfurt market, primarily due to the sale of the Greentowers. Hamburg followed close behind with a 14% slice. Berlin, Düsseldorf and Munich recorded results of between 9% and 3%.
