Retail dominates German investment deals in Q1

Around EUR 5.53 bn of commercial property changed hands in Germany in the first three months of 2011 (Q1 2011), according to international real estate advisor Savills. Retail transactions accounted for 55% of the total transaction volume and 65% of total portfolio deals.

The two major transactions in Q1 were both in the retail sector each with a volume of EUR 700 mln. These were Cerberus' purchase of 44 cash and carry properties and a logistics centre from Metro and the Canadian pension fund CPP Investment Board's acquisition of a 50% stake in Centro Oberhausen.

A further eight transactions totalling over EUR 100 mln were completed in Q1 2011, including the sale of the BrahmsQuartier office buildings in Hamburg and Friedrich Carré in Berlin which contributed significantly to the 20% share (EUR 1.09 bn) of the office sector in the total transaction volume. Industrial and warehouse properties accounted for 6% (EUR 0.34 bn) and development sites and hotel investments each accounted for 5% (EUR 0.29 bn) of the total transaction volume. In addition, almost EUR 460 mln (9%) were invested in mixed-use buildings and special-purpose properties.

'The strong performance of the investment market was clearly dominated by transactions involving retail properties, particularly by the sale of the Metro portfolio and the Centro in Oberhausen,' said Lars-Oliver Breuer, head of investment Savills Germany. 'During 2011 we expect the total investment volume to exceed the 2010 total of EUR 19.7 bn, possibly reaching EUR 20 bn. The lack of supply will be a limiting factor, primarily in the core sector where there is most demand.'