Commercial real estate market investment in Germany exceeded €9.9 bn in the first quarter of 2014, compared with €3.2 bn a year earlier, according to global real estate advisor CBRE.
Commercial real estate market investment in Germany exceeded €9.9 bn in the first quarter of 2014, compared with €3.2 bn a year earlier, according to global real estate advisor CBRE.
During the period January to end-March 2014, 16 major deals were registered in Germany, each worth more than €100 mln. Many of these deals represented portfolio sales, which accounted for a share of around 44% (up 35% year-on-year) in the total volume. Among these was the acquisition of the Leo I portfolio by Patrizia, which included 18 office buildings in Hesse with a combined market value of around €1 bn.
The sale of the Christie shopping centre portfolio in Berlin and Dresden was also completed in Q1 2014 by a joint venture of Morgan Stanley Real Estate Investing (MSREI) and the Hamburg-based asset manager Redos Real Estate. Other transactions that contributed to the brisk start into the year included the acquisition of the Domus portfolio in Düsseldorf by Blackstone, and the sale of the TAG commercial real estate portfolio to an investment fund of Apollo Global Management.
Fabian Klein, head of investment, CBRE Germany, commented: 'We registered a record volume at the start of the year that is explained by an increase in block sales. Cross-border investments of more than €5.2 bn impressively document the high level of faith that foreign investors place in Germany's real estate market.'
Foreign investment accounted for 52.6% of the total amount of investment in Germany with US investors representing 19.9%. Investment from the UK ciomprised 10.9% of the total and France, 7%.
Jan Linsin, head of research, CBRE Germany: 'Owing to its economic strength and its low spread of rents and prices, Germany is establishing itself as one of the most sought investment havens worldwide among real estate investors. The quest for safe investments and for a rate of return that continues to exceed the reference interest rate of a risk-free alternative investment keeps whetting the appetite of domestic and international real estate investors for commercial real estate in Germany.'
In the first quarter of 2013 office real estate accounted for 52% of total investment transactions (worth nearly €5.2 bn) with retail investment making up approximately 26% (€2.6 bn). The latter class experienced a one-year increase in turnover by about a third. Just over €1.3 bn worth of logistics properties changed hands, twice the amount registered at the end of the prior-year period.