German residential portfolios totalling just under EUR 7.8 bn changed ownership in the first three quarters of 2012, according to adviser Savills.
German residential portfolios totalling just under EUR 7.8 bn changed ownership in the first three quarters of 2012, according to adviser Savills.
The result marks a rise of 51% on the same period in 2011 when the firm recorded residential portfolio investment volumes at EUR 5.1 bn. Savills forecasts that this sector is still on track to reach EUR 10 bn in turnover by year-end, as predicted at the end of the first half.
Karsten Nemecek, managing director of Corporate Finance - Valuation at Savills Germany, said: 'The German residential portfolio market is attracting significantly increased investment interest, particularly against government bonds of countries with strong credit ratings. In view of the extremely low interest rate levels over the medium term and rising inflation we expect this to remain unchanged in the forthcoming years.
'Contrary to the three preceding years, the dynamics are not confined to the core residential sector. We are seeing increasing demand across the whole risk spectrum and expect the market parameters to remain favourable. With a number of large packages in the market which are unlikely to be concluded until next year, we forecast continued above-average transaction volumes in 2013.'
Savills recorded a marked diversification in the market, with 54% of transacted units in the first nine months of 2012 located outside Germany’s main cities of Berlin, Cologne, Düsseldorf, Frankfurt, Hamburg, Munich and Stuttgart, up from 23% year-on-year. Nonetheless, Savills notes that risk-averse investors still favour the key markets with over 35,000 units of a total 147,575 transacted units in Q1 to Q3 2012 located in Berlin.
