The residential portfolios markets continued to improve throughout the second quarter of 2011 with almost 17,500 residential units changing hands during the period from April to June, according to research by international real estate advisor Savills.
Karsten Nemecek, Managing Director Corporate Finance Valuation at Savills Germany, says: "The figures reflect the growing interest of both national and international investors in residential property in Germany, This is why we also expect to see further large-scale transactions in the second half of the year."
Despite the increased number of transacted packages and units the firm reveals that the total transaction volume in Germany went down from 1.99 billion in H1 2010 to 1.68 billion in H1 2011 (-16%).
Matthias Pink, Head of Research at Savills Germany, comments: "Contrary to last year we saw an increasing number of transactions in the opportunistic and value-add sector. In Q2, however, only few core properties were sold due to the lack of product so that consequently average prices declined."
The firms' research shows that on average approximately 830 per m² was paid in H1 2011, compared with 860 per m² in H1 2010, however price levels varied immensely with prices per m² ranging from below 300 to over 3,000. The gross multipliers on annual net rental income ranged between 11 and 15 in most cases.
Savills notes that the dynamics of the Berlin market were particularly striking with almost every third residential unit sold located in the city. Throughout the first half of the year more than 10,000 units changed owners under portfolio transactions in the federal capital.
Nemecek continues: "The Berlin market still offers good value for money in comparison to Germany's other major cities so many investors are taking advantage of its attractive investment opportunities. Berlin offers suitable products for both risk-averse and opportunistic investors."