A total of 45 residential packages comprising over 17,300 units changed hands in Germany throughout the first quarter of 2011 according to research by international real estate advisor Savills.
The firm reports a total investment volume of just over 880m which is markedly stronger than Q1 2010 when the volume reached 810m. The number of transacted packages and transacted units rose by approximately 25% and 22%, respectively, in Q1 2011 against the same quarter in 2010 according to Savills while the overall transaction volume increased by approximately 9% in Q1 2011 compared with the same quarter in Q1 2010.
Matthias Pink, Head of Research Savills Germany, says: "A great deal of investors are currently seeking opportunities in the German residential market so it is likely to gain even more momentum during the course of the year."
Savills data reveals a continued market trend for smaller transactions in Q1 2011, with an average of just below 400 units per transaction. Just two out of a total 45 deals in the quarter were for larger transactions which together totalled 8,900 units and accounted for over half the total transaction volume recorded in Q1 2011. Savills notes that both of these packages were purchased by foreign investors who continue to focus on larger portfolios and almost two thirds of the transacted units in Q1 2011 were bought by foreign companies.
The purchase price per residential unit dropped by approximately 10% in Q1 2011 compared to Q1 2010 according to the real estate firm, while overall prices ranged between 40,000 for older properties in secondary locations and 250,000 for developments in prime locations in Germany's major cities.
Karsten Nemecek, Managing Director of Corporate Finance Valuation at Savills Germany, explains: "This drop in price does not reflect the general level of prices but rather the fact that the two larger transactions were opportunistic investments. In the core segment price levels actually increased slightly."
"The market continues to be very varied with a large number of smaller transactions in the core segment and few major deals in the opportunistic sector," Nemecek continues.
"In the coming months we expect to see an increase in the number of opportunistic transactions but fewer core transactions due to a lack of supply. At the moment there is little activity in the core plus and value added sectors but this situation will probably change."