111 residential packages comprising just below 49,500 units changed hands in Germany in 2010, according to international real estate advisor Savills.
The investment volume of these transactions totals just below 3 billion, a similar level to 2009. The research shows that despite the number of transacted units and the transaction volume decreasing by approximately 10% in both cases, the number of portfolios sold increased slightly. Savills reports that while figures are marginally lower than 2009, a number of larger-scale transactions were in the final phase of the due diligence at year end 2010 and are expected to conclude during the course of Q1 11.
In terms of overall performance, 2010 saw a strong level of activity in H1. In total, approximately 50 portfolios changed hands in each half of the year but it was the major transactions that were recorded in H2 11. In fact, nine out of the total of 12 transactions in excess of 1,000 units were concluded in the first half of 2010.
"As was the case in the previous year, the majority of transactions took place in the smaller lot size category", explains Matthias Pink, researcher at Savills Germany. "Four out of five transactions comprised less than 500 units," adds Pink.
Another characteristic of the market for residential portfolios 2010 is that the share of foreign investors has increased.
"This reflects the trend we saw in the commercial real estate market over the past few months," comments Karsten Nemecek, Managing Director Corporate Finance - Valuation of Savills Germany, on the parallels.
"Internationals are particularly interested in larger residential packages," adds Nemecek. Although only every fifth purchaser of residential portfolios came from abroad, this group acquired approximately half of all units transacted.
In terms of price structure the market widened significantly. In a number of transactions including a few distressed sales, square meter prices were below 500.
On the other hand, however, transactions were concluded achieving prices well above 2,000 per m². The majority of such transactions were attributable to special funds or closed-end funds focusing on high-quality stock in the major metropolitan areas, which continue to dominate the market in terms transactional volume and higher prices achieved. In cases where the purchase price has been disclosed (47 transactions) an average purchase price in excess of 64,000 per unit was determined. When compared to the record prices of 55,000 per unit paid in 2009, this marks another notable increase.