Germany headed for EUR 20b investment in 2011: Colliers

Property services firm Colliers International has maintained its forecast that real estate investment volumes in Germany will likely reach more than EUR 20 bn this year, based on a strong first half in which transaction volumes totalled some EUR 11 bn. The H1 figure represents a 24% increase on the year-earlier period.

'In light of the first-half results and sales currently in negotiations, we continue to stand by our earlier forecast of over EUR 20 bn in transaction volume in the commercial investment market this year,' said Andreas Trumpp, head of research at Colliers International in Germany.

Open-ended and special real estate funds accounted for a transaction volume of about EUR 2.3 bn in the first half, just ahead of investors with an opportunistic or added value-oriented investment profile, according to Colliers. Closed-end funds accounted for about EUR 1.9 bn and project developers for around EUR 1.3 bn, thereby accounting for noteworthy portions of the transaction volume. Nearly 38% of the investors were based outside Germany.

'In the first quarter, most of the investment volume went toward locations outside of the traditional real estate centers as a result of various factors, including large-volume transactions such as the sale of the Metro portfolio and a 50% share in the CentrO shopping and leisure center in Oberhausen. Then, in the second quarter, investors resumed their activities in traditional locations, especially in Frankfurt and Hamburg, each of which saw about EUR 1 bn in capital invested in the period from April to June alone,' Trumpp said. In all, investment in the cities of Berlin, Düsseldorf, Frankfurt, Hamburg, Munich, and Stuttgart came to EUR 4.5 bn, slightly less than 41% of the total transaction volume.

The biggest office transaction to date this year took place in the second quarter, when a closed-ended DWS fund invested nearly EUR 584 mln in the Greentowers development, in Frankfurt, which is occupied by Deutsche Bank. Trumpp: 'All in all, though, retail properties continued to lead all other use categories by a wide margin at the close of the first half of the year. Investors put some EUR 5.9 bn into retail real estate, nearly twice as much as they invested in office properties, at just under EUR 2.9 bn.' The retail and office sectors were trailed at a significant distance by a near tie between hotel properties, at about EUR 582 mln, and warehouse, logistics, and industrial properties, at about EUR 573 mln.

Prime yield values remained unchanged in all of the cities analysed with the exception of Hamburg and Frankfurt, which booked the strongest sales figures. The prime yield for an ideal office property fell by ten base points from the previous quarter in both markets, to 4.70% in Hamburg and 5.20% in Frankfurt. At 4.50%, Munich remains the most expensive location. First-rate office properties are more favourably priced in top locations in Berlin (5.00%), Düsseldorf (5.25%), and Stuttgart (5.40%).

Colliers International is the third-largest commercial real estate services company in the world with 12,500 professionals operating out of more than 500 offices in 61 countries.