Savills latest German investment report states that commercial real estate worth approximately 11.03 billion was transacted throughout the first half of 2011 in Germany. Retail dominated with seven out of the 10 largest transactions in this sector equating to 51% of the market.
Oliver Schinkewitz, Managing Director of Investment at Savills Berlin, says: "The investment volume of 5.58 billion transacted in Q2 marginally beat the positive result of the first three months of the year. Retail remains the dominant sector."
The international real estate advisor reports 51% (4.68 bln.) of the total transaction volume generated in the first half of the year was invested in retail properties. Besides shopping centers in Hamburg and Cologne various Karstadt properties changed ownership. Investments in office buildings ranked second most popular asset class with a 27% share (3.03 bln.), including the sale of Deutsche Bank's Greentowers to DWS which represented almost a fifth of the total volume invested in office buildings.
Development sites accounted for 6% of the total transaction volume followed by industrial and warehouse properties respectively (0.64 bln. and 0.61 bln.). Recovery in the hotel investment market progressed and is reflected in a 5% (0.51 bln.) share in the total transaction volume. Another 5% (0.57 bln.) was invested in mixed-use and special-purpose real estate.
Single asset transactions accounted for almost three quarters of the total transaction volume of H1. Savills says circa 3.08 billion was invested in portfolios with 65% of portfolio transactions in retail
Domestic investors were the most active at 64% of the investment volume generated in H1. Activity continues to increase with German investors accounting for circa 53% of the market share in Q1 and just below 74% in Q2.
In terms of location, Savills finds 16% of transaction volume was in the Frankfurt market the city holds the leading position among the five major investment markets in Germany, primarily due to the sale of the Greentowers. Hamburg follows closely behind with a 14% slice. Berlin, Düsseldorf and Munich recorded results between 9% and 3%. The transactions saw the top5 locations returned to 'normal' transactional levels in terms with 46% in the six months' period just ended invested in these locations, up from 27% in Q1.
Savills predicts 2011 investment volumes will exceed the 2010 result of 19.7 billion.
Schinkewitz continues: "Given a couple of forthcoming large-volume transactions throughout the second half of the year the 25 billion mark indeed seems realistic."