Transaction volumes in the German office investment market increased by 40% to €12 bn in the first three quarters of 2014, research from consultancy group NAI Apollo shows.

Transaction volumes in the German office investment market increased by 40% to €12 bn in the first three quarters of 2014, research from consultancy group NAI Apollo shows.

Individual transactions dominated the market with a volume of €9 bn, or 74.7% of the total, while portfolio transactions contributed €3 bn or 25.3 % to the overall result.

However, compared to the previous year, portfolio deals increased by 164.6 % while individual transactions grew by only 20.7% compared to the first three quarters of 2013, the research found.

The largest portfolio deal in the year to date was the sale of the LEO-I portfolio worth around €1 bn to a special fund of Patrizia. In the third quarter of 2014, the largest portfolio transaction was the sale of the Orion portfolio comprising three properties - all of which are let to Deutsche Telekom on a long-term basis - to I-REIT Global from Singapore. The purchase price for the portfolio was €224.5 mln.

German investors still dominate the market with a 61.5 % share or a volume of €7.3 bn, while US investors accounted for the second-highest volume with €2.1 bn (17.5 %). Investors from the UK ranked third, with a volume of €710 mln (5.9 %).

In terms of investor type, open-ended funds/special funds were in the lead, acquiring office properties for €3.4 bn (28.4 %). This corresponds to an increase of 62.1 % compared to last year. Asset and fund managers are in second place with an investment volume of €2.4 bn (20.9 %), followed by private equity funds/opportunity funds with a volume of €1.3 bn (10.9 %).