Investment in commercial property in Germany in the first three quarters of 2007 totalled 45.1 bln. That is an increase of around 52% on the same period last year. If residential portfolios and non-performing loans are also included in the investment total, the figure so far this year climbs to around 58.74 bln. This is revealed by an analysis conducted by Atisreal, Germany's leading commercial property consultants.
"In the third quarter, investment turnover continued at a very high level a sign that it is primarily the segment of mega-deals which has been affected by the turbulence in the financial markets. As an investment location, Germany remains highly attractive", says Piotr Bienkowski, Managing Director of Atisreal Germany. Of the total of 45.1 bln. invested in commercial property, single deals accounted for over 18 bln. (40%) and portfolio transactions for more than 27 bln. (60%). "It is above all office investments which have benefited, in line with the positive development of office markets, with very good take-up levels, lower vacancy volumes and rising rents", Bienkowski points out. Office buildings were well out in front, with a share of 52% (23.4 bln.) of total turnover. In second place came retail properties, with a share of almost 25% (11 bln.).
Following a fall in yields in the first half of 2007 to almost to the level found in the large European metropolises, the third quarter saw them rising again. "The problems in the financial markets have led to changes in fi-nancing pledges and financing terms, but the market is beginning to adapt to these. There can be no talk of any slump in the investment market", says Bienkowski.
The high transaction volume benefited in particular the six most important German investment locations (Berlin, Cologne, Düsseldorf, Frankfurt, Hamburg, and Munich). In the first three quarters, they generated an aggregate turnover of 22.77 bln. (+85.6%). Portfolio deals, included on a pro rata basis, accounted for almost 48% (10.82 bln.) of this total. The list of favoured locations was headed by Frankfurt with turn-over of 6 bln. (+157%), followed by Munich with 5.33 bln. (+61%), Hamburg with 4.64 bln. (+109%) and Berlin with 4 bln. (+83%).
Turnover in 2007 as a whole is set to reach a new record level. However, the final figure will not be quite as spectacular as had been anticipated around the middle of this year. Bienkowski: "All the same, Germany remains one of the most important investment locations, above all for investors with a long-term orientation and a higher proportion of equity capital. So we expect markets to remain buoyant and believe that 2008 will also be an above-average investment year by long-term standards."