In the first half of 2006, a total of 152 commercial property transactions were conducted in Germany, worth €21.34 billion, say the researchers at DEGI Deutsche Gesellschaft für Immobilienfonds mbH in a recent market analysis. In 77.6% of the transactions, German market players act as sellers, while investors from abroad are preponderant on the demand side, at 55.2%. In terms of purchasers, the UK leads the national rankings with 12.3%, followed by the USA with 7.1%, not least because of their function as international capital collecting points. Another 18.2% of investments come from EU nations.
These results illustrate the attractions of the German property market for both German and foreign investors. "Property investors at present cannot afford to ignore "hot spot Germany", says Dr. Thomas Beyerle, Head of Research and Strategy at DEGI.
An assessment corroborated by the notably high proportion of transactions at B-locations (towns with less than 5 million m² of office space), at 52.5%. Grounds for optimism, says Thomas Beyerle, since it indicates that investors are also prepared to accept higher risks than at the classical investment locations. A further sign of the favourable trend on the German property market, says Thomas Beyerle, is that a large proportion of the deals analysed involve portfolio sales rather than individual transactions: "Capital market investors want to use portfolio purchases to rapidly build up an exposure in Germany, so as to take advantage of the currently favourable phase of the market."
Shift towards commercial properties
The preponderance of residential properties observable in 2005 among property sales, a one-off effect of Viterra's biggest sale so far of a residential property portfolio, is no longer discernible in the first half of 2006. The major categories in the transaction volume during 2006 are retail with 48% and office with 26%. The largest deal is the sale of a property package by KarstadtQuelle AG, worth €4.5 billion to a joint venture owned by Whitehall Fund (51%) and KarstadtQuelle (49%). Transactions with residential properties accounted in the year's first half for only 15% of the total.