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The real estate appraiser - magazine for the valuation practice archive 2013 issue 1Â

The real estate appraiser / magazine for valuation practice
1/2013 Pages: 35 to 37


High demand for German commercial real estate

The commercial investment market in Germany closed 2012 with a transaction volume of a good € 25.4 billion and was thus overall above expectations at the beginning of the year. â € œThe 10% increase over the previous year is mainly due to the fact that investment activity picked up again in the final quarter. Five of the ten biggest deals of 2012 happened in the last three months alone, â € says Ignaz Trombello, Head of Investment at Colliers International, Germany. Outstanding were the TLG commercial portfolio taken over from Lone Star and the Karstadt real estate acquired from Signa Holding, each with a volume of around € 1.1 billion. Mainly because of these portfolios, the share of package sales in the transaction volume at the end of 2012 was around 23% (5.9 billion €) and thus just above the level of the previous year. Foreign investors, who accounted for eight of the ten largest purchases of the year, invested around € 9.6 billion in Germany, around € 1 billion more than in 2011.

By the end of 2012, national and international investors had invested almost € 11.7 billion in German office properties, accounting for around 46% of the transaction volume. Second place went to retail properties, in which just under € 6.8 billion were invested. They had to give up their top position from 2011, which they had achieved due to numerous large-volume sales. Mixed-use properties accounted for around 12% or € 3.1 billion of the transaction volume. â € œMany of the office properties sold in 2012 were very attractive investment opportunities due to the good occupancy rates achieved in the last two years through new leases or long-term lease extensions, "comments Trombello. â € œOther investments such as TLG-Immobilien, on the other hand, offer value and cash flow growth potential through active asset management, â € he adds.

The six real estate centers examined in Berlin, Düsseldorf, Frankfurt am Main, Hamburg, Munich and Stuttgart were able to increase their share of the total German transaction volume compared to the previous year. â € œA total of around € 14.6 billion, a good 31% more, was invested in the top 6 in 2012 than in 2011. At the end of the year, Berlin was the front runner with a transaction volume of € 4.1 billion, which is a plus of 86%, ahead of Munich with a good 3.7 billion euros (+ 29%) and Frankfurt with 2.9 billion euros (+ 5%).

Among the attractive, large-volume investments in Berlin are the KaDeWe share in the Karstadt portfolio of around € 500 million and the Neues Kranzler Eck property with over € 350 million; fe with 270 million euros as well as the Palais an der Oper and in Frankfurt the Palais Quartier with around 450 million euros and "Die Welle" with around 400 million euros in investment volume. In Stuttgart, the sale of shares in the Milaneo for approx. € 400 million led to an increase in the transaction volume of 218%. In Düsseldorf, the sale of the â € œSky Officeâ € for around € 125 million made up a large share of the total volume of € 800 million (+ 19%). In 2012, Hamburg was the only city with a declining transaction volume with around 1.9 billion €, as there was no significant number of large-volume transactions here.

Compared to the previous year, first-class office properties in the prime location of Stuttgart increased by 20 basis points, resulting in a prime yield of 5.20%. In Frankfurt and Düsseldorf it fell by five basis points to 5.15% and 5.20%, respectively. In Munich (4.50%) and Hamburg (4.70%), the most expensive locations in Germany, it changed just as little as in Berlin (5.00%).

â € œThe transaction volume could have been even higher with a correspondingly larger range of investment-compatible products in 2012, â € Trombello is certain. â € œWe therefore see the factor limiting the transaction volume for 2013 more on the supply side. All in all, we are assuming a result of over € 20 billion in 2013 with consistently high demand and stable to slightly falling prime yields. If the market for the increasingly popular value-add products picks up, when there are financing options in this area again, it can be even higher, â € he adds.

Housing portfolio market 2012

In 2012, the investment market for residential portfolios experienced the highest turnover since 2007. The transaction volume amounted to approx. € 10.45 billion, which corresponds to an increase of 46% compared to the previous year. The number of apartments traded increased by 65% ​​to almost 200,000, although the number of transactions fell by almost a quarter to 159 (2011: 207). Transactions of 10,000 units or more were characteristic of the past year - parcels of this size were last traded in 2008 (then LEG NRW). Six such portfolios changed hands last year, including the apartments of LBBW,

BayernLB (DKB Immobilien) and the federally owned TLG. â € œAlthough the large transactions made a significant contribution to the high transaction volume, we were able to observe an increase in almost all other size categories compared to the previous year, â € reports Matthias Pink, who is responsible for research in Germany at Savills. Only in the smallest of the size classes recorded by Savills with portfolios of less than 800 residential units has the transaction volume declined, according to Pink. As a result, the average size of the residential portfolios traded has more than doubled compared to 2011 (approx. 1,250 units per transaction).

By far the most active investors were real estate companies, who invested a total of more than € 4 billion in German apartment packages. In second place are insurance companies, pension funds and pension funds, which invested almost € 1.5 billion directly and a further € 0.7 billion through special funds. â € œThese volumes underline the great importance that German residential real estate has from the point of view of institutional investors, â € explains Karsten Nemecek, Managing Director Corporate Finance â € “Valuation. â € œWhile they were largely ignored for years, residential real estate in Germany is now the first choice for many security-oriented investors, â € he adds. In addition, residential real estate is popular with the financing banks, which also increases market liquidity. Private equity funds complete the top 3 buyer groups â € “they made purchases for a total of more than € 1.2 billion.

Although only a few portfolio sales with more than 10,000 units are pending this year (including GBW with approx. 33,000 units), Savills expects an above-average transaction volume in the high single-digit billion range for 2013 as well. â € œEspecially in the riskier investment segments, in the context of upcoming refinancing, we expect more transactions than last year, â € Nemecek looks to the future. Since private equity funds in particular would be considered as buyers for these packages, the proportion of foreign investors will also increase, which last year was comparatively low at around a quarter of the total transaction volume.

Strong annual results on the German hotel market

The German hotel investment market experienced an even better fourth quarter in 2012 after an already very strong third quarter, so that a transaction volume of almost € 1.3 billion was posted at the end of the year. The result was around 16% above the value of the previous year. â € œThe past year was divided in two. While investors noticeably held back in the first half of the year, some attractive and large-volume sales were concluded in the second half of the year, which ultimately led to an investment volume that was slightly above expectations, â € says Andreas Trumpp, Head of Research at Colliers International, Germany. Sales of smaller volumes under € 5 million accounted for around 4% or € 54 million of the total transaction volume. The share of the hotel portfolio was on a similar level as in the previous year. With around € 184 million, around 14% of the transaction volume was achieved in the context of package sales.

In 2012, most of the capital was again invested in the middle star segment. At the end of the year, hotels with three or four stars accounted for around 72%, i.e. almost € 926 million, of the transaction volume. Hotels in the low-budget and economy segment with one or two stars attracted a good € 184 million in investment capital (14% market share), while those in the luxury segment with five stars around € 130 million (10th %). Due to several large-volume sales of existing properties, their share of the transaction volume was around 63% or € 814 million, slightly above the level of the previous year. New buildings, hotels under construction and project developments accordingly accounted for 37% or € 468 million. â € œOverall, the demand in 2012 was more concentrated than in 2011 on the top locations Berlin, Düsseldorf, Frankfurt / Main, Hamburg, Cologne, Munich and Stuttgart. In total, almost 77% of the transaction volume was achieved in the top 7. In 2011, their share was still 60%, â € says Andreas Trumpp. The largest sales in 2012 included, for example, the Maritim Hotel in Berlin, which SEB sold to the Qatari investor Al Rayyan Tourism Investment Company for around € 180 million, and the Hamburg-based Barceló- Hotel that Union Investment bought from the Spanish Barceló group for around € 41.5 million.

Most of the investors who bought German hotels in 2012 can be attributed to the more risk-averse camp. Asset and fund managers made up the largest group of buyers with a 31% share of the transaction volume, followed by private investors and family offices with around 18% and open-ended real estate funds and special real estate funds with a good 17%. The proportion of international investors was slightly higher than in the previous year. In total, they invested almost € 913 million in German hotel properties, which corresponds to a market share of 71%. Without taking portfolio sales into account, the average purchase price was per hotel

thus around € 32 million, while German investors only invested just under € 10 million per hotel.

Andreas Erben, Managing Director of Colliers Hotel GmbH, is confident about the new year. â € œWe are assuming strong development in the German hotel market in 2013 and expect a transaction volume of over €1 billion, â € explains Erben. â € œThis assumption is mainly based on the increased interest of domestic and foreign investors in the German hotel market, who increasingly see the attractive return prospects of the hotel asset class as an addition to their real estate portfolios, â € he adds. â € œIn the future, institutional investors in particular will invest more in the hotel market, which will have a supportive effect on the transaction volume and provide a positive signal on the hotel market.â €

Hamburg: Office letting market 4th quarter 2012

The slower growth of the German economy in the course of 2012 was not without consequences for the Hamburg office market. Office space take-up was significantly lower than in the previous year, with a drop of 20%. According to calculations by the real estate service provider Grossmann & Berger, around 430,000 m² of space were implemented on the Hamburg office market in 2012. The owner-occupier share in 2012 was just under 7%.

In 2012, City Süd emerged as the winner in the competition between the submarkets in terms of the spatial distribution of take-up. With an increase in turnover of 24,500 m² (this corresponds to an increase of almost 40%), the City Süd submarket achieved the highest absolute growth of all submarkets. With the deal from Praktiker (8,200 m²), the owner-occupier deal by ADAC Hansa (7,600 m²) and the sale-and-leaseback deal with Sharp Electronics (6,000 m²), City Süd booked three large deals with one river in 2012 Volume over 5,000 m². Overall, City Süd achieved a turnover of 87,700 m² of office space and is therefore only 2,600 m² behind the City submarket with 90,300 m². The city of Hamburg, traditionally the front runner among the sub-markets, recorded a significant decline in take-up of space in 2012 compared to the previous year, which was strong in turnover, with a minus of 46%. â € œThe serious decline in turnover in the city of Hamburg can be explained mainly by the lack of larger, contiguous areas in new building quality at attractive rental rates, â € says Rehberg. The other centrally located sub-markets such as HafenCity benefited from the lack of adequate new-build space in the city. With a take-up of 48,200 m² and a share of around 11%, this submarket took third place in the ranking of Hamburg's submarkets. â € œHafenCity currently has very interesting offers in the new-build segment, making it a real alternative to Hamburg City for many larger companies, â € comments Andreas Rehberg, Managing Director of Grossmann & Berger, on the trend in this development. The largest share of sales, each with 17% of the space turnover and around 74,000 m², was accounted for by the consulting firms and companies in the information and telecommunications sector. However, while the consulting firms rented around 33,000 m² significantly less office space, the information and telecommunications companies grew significantly with an increase of 14,600 m². A good turnover, especially in the new construction segment with correspondingly high rents, led to a slight increase in the prime rent by 50 cents to € 24.00 / m² / month in the course of the second half of 2012. The average rent for office space at the end of 2012 was € 14.00 / m² / month, well below the record result of the first quarter of this year of € 14.90 / m² / month . Compared to the last ten years with an average amount of 13. â € “€ / m² / month, the current average rent is significantly higher.

The solid rental activity of the past twelve months has led to a slight reduction in vacancy. Compared to the same period in the previous year, this decreased by around 76,000 m² from 1,045,700 m² to 970,000 m². With an office space stock of 13.13 million m² at the end of the fourth quarter of 2012, the vacancy rate was now 7.4% including sublet space (7.1% without sublet space) and thus 0.6% below the value of the previous year. The distribution of the available space was concentrated on the submarkets City and City Süd with the highest turnover, which accounted for 26% and 23% of the total vacancy rate. The completion volume in Hamburg is expected to be 470,000 m² in 2013/2014. Around 60% of the area under construction and projected is already contractually bound, so that again relatively little speculative area will come onto the market.The focus of construction work is on the city center with a total volume of around 100,000 m².