Investment market Hamburg 1Q2022: Record result thanks to outlier trade
HAMBURG / 01.04.2022
When the Canadian asset manager Brookfield Properties took over alstria office, an office-building management firm, it led to the highest 1st-quarter investment trading result ever recorded on the Hamburg market for commercial properties. The total volume traded in the first three months was some €1.9bn or 171 % higher than in the same quarter a year before. This take-over meant that in Hamburg alone more than 30 properties valued at some €1.5bn changed hands. Without this outlier trade the transaction volume would have been some €440m and thereby well below the prior year’s figure of €700m, largely because no trades had been left in the pipeline for completion in 2022. In her forecast for the remainder of the year Sandra Ludwig, managing director of Grossmann & Berger, member of German Property Partners (GPP), says, “At present there are many products on the market and the transaction pipeline is already well filled. Some big-ticket office trades are scheduled for completion in the second quarter. Demand, especially for ESG-compliant core real estate remains high, despite the political question marks raised by the Ukraine war. However, over the course of the year rising interest rates are likely to affect the prices buyers will pay and act as a brake on the rally.”
- Accounting for 86 % of the volume, office properties were the most traded class of commercial property asset. Their sky-high share of trades is attributable to the outlier described earlier. Trailing far behind, commercial building land and industrial/logistics properties placed second and third with a share of about 4 % each.
- The relative activity of different buyer groups also showed an unusual pattern: fund managers were significantly ahead of other groups with a share of some 82 %. If the alstria effect is discounted, developers were the biggest group of buyers with 44 % of the market.
- As far as sellers of property are concerned, listed real estate investment AGs/REITs formed the biggest group. Here too, their high share of 84 % was generated by the alstria take-over. Discounting this outlier, developers were the biggest group of sellers with 32 % of the market.
- International buyers accounted for 87 % of the total trading volume. Without the alstria transaction, their share would have been 30 %.
- Whereas year on year the prime yield on commercial buildings remained at its low of 2.7 %, on office properties it sank by 0.1 percentage points to 2.6 %. Strongly increased demand for industrial and logistics properties resulted in considerable yield compression in this segment: year on year the prime yield shrank by 0.6 percentage points to 3.3 %.