Top 7 Investment Markets Q1/2019: sluggish start to the new year

Top 7, 05.04.2019Press release

Top 7: Transaction VolumeFigures from German Property Partners (GPP) show that 2019 started with sluggish trading in investment properties (excluding buy-to-let residential) in Germany’s top 7 cities - Hamburg, Berlin, Düsseldorf, Cologne, Frankfurt, Stuttgart and Munich - generating a transaction volume (TAV) of €4.85bn. Year on year this translates into a fall of 32 %. Of all the top 7 cities, only Berlin posted growth, with an impressive surge in the transaction volume of 149 % to €2.1bn that set a new record for the German capital.

At the same time the proportion of portfolio sales in the top 7 cities was up by 53 % overall, thus comprising 15 % of the total volume of transactions during the first three months of the year. Forward deals accounted for 12 % of the transaction volume; in the 1st quarter of 2018 they made up 14 % of the total. International investors spent less than in the same quarter a year ago and their share of the total slipped to €1.8bn, down by 32 %. At the close of the 1st quarter they were behind 37 % of the volume traded (1st quarter of 2018: 37 %). From this it is evident that foreign buyers are still eager to invest in the top 7 cities.

 

Top 7: Prime yieldOffice properties remained the most popular asset class, accounting for 75 % of the volume of transactions.  About one fifth of the total invested related to properties located in the central business districts (CBDs) or inner city areas. Year on year, prime yields on office properties in the top 7 cities contracted by a further 0.19 percentage points to an average of 3.03 %. The lowest prime yield was noted in Hamburg at 2.80 %, the highest in Stuttgart at 3.30 %.

“The rather slow start to this year may be attributed to an excellent trade in investment properties in 2018 and the ensuing shortage of real estate on the market. Prime yields have settled at a low level. We do not expect to see any dramatic plunges in 2019,” says Guido Nabben, GPP spokesman, commenting on the 1st quarter.

 “There is still a great deal of cash that urgently needs to be invested. In view of the faltering global economy and the uncertainties surrounding Brexit, many investors view the German property market as a safe haven. Borrowing terms for purchases of real estate remain favourable in 2019 following the European Central Bank’s recent announcement that the base rate will not be raised. Therefore we are confident that the final result will be good this year, although well below that for 2018,“ Nabben says.

 

Top 10 known agreements | top 7 locations | 1st quarter of 2019 

City 

Project/property 

Buyer/investor 

Vendor 

Pur. price* 

(about €m) 

BER

“Oberbaum-City”, Rotherstraße

Blackstone Group

UniCredit (HVB)

475

BER

“Pressehaus am Alexanderplatz / New Podium”, Karl-Liebknecht-Strasse 27-29

GEG German Estate Group

Tishman Speyer

365

STU

“Königsbaupassagen”, Königstrasse 26

Antirion SGR for Italian insurance company et al.

Evans Randall

280

BER

“Zoom”, Joachimsthaler Strasse 4

Bayerische Versorgungskammer BVK

Hines

265

DUS

“Herzogterrassen”, Herzogstrasse 15

Godewind AG

Blackstone

140

MUC

“Westend Yards”, Hansastrasse 24-36 / Dillwächterstrasse 1-3

LaSalle Investment Management

PGIM Real Estate

140

HAM

Building site, Großer Burstah 3

Gator Beteiligungsverwaltungs GmbH

Commerz Real (for HausInvest fund)

100

MUC

“South One”, Baierbrunner Strasse 54

Empira

Isaria

95

FFM

“AOC - Accent Office Center”, Hanauer Landstrasse 291-293

Finch Properties / Tristan Capital Partners  (CCP 5 fund)

GLL Real Estate Partners

> 80

HAM

“Arne-Jacobsen-Haus”, Überseering 12

Matrix Immobilien

Vattenfall Europe GmbH (HEW)

60

* The purchase prices stated are based on publicly available data, where none is available an estimate is taken; source: German Property Partners (GPP) 

 

Top 7 cities | 1st quarter of 2019 

 

HAM 

BER 

DUS 

CGN 

FFM 

STU 

MUC 

Top 7 

Transaction volume 

In €m 

460

2,145

435

120

641

400

654

4,854 

Change 

against prior yr in % 

-65

149

-22

-70

-58

-25

-67

-32 

Prime yield*, offices 

in % 

2.80

2.90

3.00

3.20

3.00

3.30

3.00

3.03

against prior yr in percentage points

-0.10

-0.10

-0.30

-0.30

-0.30

-0.20

0.00

-0.19

Prime yield*, commercial buildings

in %

2.70

2.90

3.00

2.90

2.90

2.80

2.45

2.81

against prior yr in percentage points

-0.20

0.00

-0.20

0.00

-0.10

-0.60

0.00

-0.16

Prime yield*, logistics in %

4.50

4.20

4.35

4.20

4.20

4.50

4.00

4.28

against prior yr in percentage points

0.30

-0.30

-0.25

-0.30

-0.30

-0.60

-0.40

-0.26

Strongest

Asset class

Offices

Offices

Offices

Offices

Offices

Trade

Offices

Offices

Strongest

asset class in %

53

75

72

33

80

75

95

 75

* Net initial yield; Source: German Property Partners (GPP)

Details about each top 7 investment market can be found in the full press release attached as well as infographics about the paramters mentioned.

 

Press contact


Berit Friedrich

Bleichenbrücke 9
D-20354 Hamburg
Phone +49 (0)40/350 80 2-588
Fax +49 (0)40/350 80 2-200
Email b.friedrich@grossmann-berger.de
Internet www.grossmann-berger.de

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