Approximately €17.24 bn of commercial property changed hands in Germany in the first nine months of 2011 following a strong third quarter according to international real estate advisor Savills.
The firm expects to see a marked growth in investment volumes by year end compared with the 2010 total investment volume of €19.7 bn. The third quarter of 2011 saw the strongest performance of the year so far with a total transaction volume of approximately €6.20 bn.
Lars-Oliver Breuer, Head of Investment Savills Germany, says: “The third quarter of 2011 has been very strong and as in preceding quarters the investment market was clearly dominated by retail transactions which accounted for 51% of the total transaction volume.”
In the first nine months of the year more than half of total turnover (52%) equating to €8.88 bn, was invested in retail assets. Office investments accounted for 27% (€4.67 bn) and development sites for 5% (€0.83 bn) of the total transaction volume, up 96% and 77% respectively against the first nine months of 2010. Hotel investments as well as industrial and warehouse properties accounted for approximately 4% each, down by 29% and 15% respectively compared to the same period in 2010. In addition €1.54 bn (9%) was invested in mixed-use buildings and special purpose properties.
Single asset transactions accounted for exactly 70% of the total volume in the first three quarters, while portfolio transactions totalled approximately €5.17 bn. German investors accounted for 58% of the market share which marks a slight decrease from the first half of the year. Among the foreign investors North American buyers showed the strongest appetite with a share of just below 15%.
Broken down into Germany’s five major investment markets the firm’s research shows that Frankfurt recorded the highest investment volume of 15% with the sale of Deutsche Bank’s Greentowers and Skyline Plaza alone accounting for almost half of the investment volume. Frankfurt is followed by Berlin and Hamburg at approximately 11% each while Munich and Düsseldorf accounted for 7% and 4% respectively of the total transaction volume. In the first three quarters almost half of the total volume (48%) was generated in the five major investment markets as opposed to the first quarter when more than 70% of transactions took place outside the top five markets.
As a result of the current economic background and the uncertainty prevailing in financial markets it is difficult to make a forecast for the last quarter and hence for the year as a whole. Breuer says: “Compared to last year’s investment volume of €19.7 bn we will most certainly see a marked growth in 2011. Whether the investment volume comes out at €22 bn or €24 bn in the end will, however, depend on what impact, if any, the current uncertainty prevailing in financial markets will have on the funding conditions particularly for investment transactions beyond core.”