Total turnover in the German commercial property investment market could reach €30bn by the end of 2013, a significant increase on the 2012 volume of €25.3bn according to research from Savills.
As well as an expected high level of transaction activity in the second half of the year throughout Germany, Savills expects a higher level of deals in Berlin, with investors anticipating a planned increase in the rate of real estate transfer tax set to come into force in 2014.
CBRE research indicates that Germany’s investment market saw the highest half-yearly volume of transactions – €12.6bn – since the boom year 2007. This figure was 34% higher than that for the first half of 2012, says the firm.
Foreign investors, including a number from the US and Asia, have joined German investors, who have been more active in the market this year and whose increased appetite for property accounted for 72% of the total investment volume.
About €3.6bn was invested by foreign investors, primarily from North America, Asia and the Middle East but also other European countries.
North American investors accounted for 43% of the investment volume during the first half of 2013, according to Savills.
Developers lead sales rankings
Among home-grown investors the most active buyers were open-ended funds, special funds, insurance companies and pension funds. Developers generated the highest sales, disposing of €3.7bn worth of property and accounting for 29% of the total volume. They were followed by asset and fund managers and open-ended and special funds.
Demand for office property has exceeded demand for retail, which is still in second place. Single-asset deals have dominated the market in the first six months of this year, although considerably more portfolio deals took place in the first half of 2013 than during the same period last year.
Dundee International’s purchase of the SEB portfolio in the first quarter of 2013 and two notable office transactions in Frankfurt accounted for much of the increased office turnover: Allianz’s €300m acquisition of Frankfurt’s Skyper office in April as well as the sale of Gallileo office tower in a club deal with South Korean investors in June. Second-half deal volume has already been boosted by CA Immobilien’s €800m sale of a German office portfolio to Augsburg-based Patrizia, which bought the assets on behalf of a consortium based in the German-speaking countries.
There have been important transactions in the retail market too. These include Art-Invest Real Estate’s acquisition of the Kö-Bogen mall in Düsseldorf for two German pension funds and ECE’s acquisition of shares in the Kaiserplatz-Galerie in Aachen, both during the ?second quarter.
The third quarter was dominated by Austrian Signa Holding’s acquisition of more than 75% of Karstadt Premium Group and Karstadt Sports from Berggruen Holdings. The stake provides Signa with exposure to Germany’s flagship department stores KaDeWe in Berlin, Alsterhaus in Hamburg and Oberpollinger in Munich.
Germany’s big cities are the main attraction for investors across the board. Berlin, Düsseldorf, Frankfurt, Hamburg and Munich accounted for more than half of the total transaction volume of €6.8bn, according to CBRE.
The highest volume was recorded in Frankfurt, where the deal volume more than doubled to €1.63bn (+120%) followed by Munich and Berlin with €1.57bn and €1.35bn respectively.
Hamburg’s investment volume increased by almost 50% year on year to €1.7bn, while Düsseldorf registered a 209% increase to €1.09bn.
