savills.de/research 01
Market in MinutesGermany investment markets Q2 2015
Savills World Research Germany Investment
The facts at a glanceHeading for new records? Residential: yes! Commercial: maybe.
■Despite talk of a ‘Grexit’ and interest rate rises, the boom in the German real estate investment market did not show any signs of slowing in the 2nd quarter of 2015 and even accelerated somewhat further. Almost €40bn was invested in commercial property and residential portfolios during the first half of the year.
■ The transaction volume for commercial property totalled €23.8bn - an increase of one third compared to H1 2014. Residential portfolios accounted for investment totalling €15.9bn during the same period (+105% compared with H1 2014).
■ With the German economy remaining extremely healthy despite the volatility in the financial markets and concerns surrounding Greece, demand for German commercial property remains very high. Furthermore, a glance at the individual sectors illustrates that the economic impetus is increasingly attributable to German consumers. More than €9.5bn was invested in retail property during the first half of the year, relegating office property into second place.
■ In the residential portfolio market, Deutsche Annington is the dominant player. The company’s acquisitions of Gagfah and Südewo represented the two largest transactions of the first half of 2015.
■ The ongoing low interest rate environment combined with increased volatility in the equity and bond markets is likely to mean sustained high levels of investment activity. Consequently, the residential market will end the year with a new record transaction volume and the 2007 record in the commercial market could also be surpassed.
Q2 2015
savills.de/research 02
Market in Minutes | Germany Investment Markets
Commercial investment market Germany+++ Transaction volume +33% | Share of domestic investors decreases to 43% +++
3.59
6.53
5.52
5.26
6.24
7.16
5.37
3.94
5.21
11.0
2
7.00
6.63
5.85
11.9
6
10.4
8
7.34
8.13
14.9
3
9.37
14.4
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2010 Q3
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2015 Q1
2015*
€bn
€bn
transaction volume, quarterly (left axis)transaction volume, past 12 months rolling (right axis)
GRAPH 1
Transaction volume
TAbLE 1
Key investment market figures
0%
10%
20%
30%
40%
50%Office
Retail
Industrial / Logistics
Hotel
Development land
Other
past 12 month past 5 years
GRAPH 2
Transaction volume by sector
Source: SavillsSource: Savills / * forecast
Source: Savills / * prime yields = average of Top 7 markets
• The transaction volume for German commercial property totalled €46.8bn during the 12 months to June 2015, representing an increase of 18% compared with the 12-month volume to March 2015.
• High pressure to invest was not least responsible for investment activity increasingly shifting towards larger transactions. The first half of 2015 witnessed almost fifty deals for more than €100m. This was more than twice the amount completed in the first half of the previous year, and the trend is likely to continue.
• Against a background of continued low interest rates and increased volatility in the equity and bond markets, investors may feel compelled to increase allocations to real estate yet further within their portfolios. In any event, the transaction volume is likely to reach €50bn by the end of the year and may even surpass the record volume of €55bn, which was set in 2007.
German commercial investment market in minutesSuper-cycle reaches new high
Transaction volume (€m)
Share of domestic investors
Office prime net initial yield
High street prime net initial yield
H1 2015y-o-y change
12 months rolling
q-o-q change
12 months rolling
q-o-q change
Q22015
q-o-q change
Q22015
q-o-q change
Berlin 2,855 +137% 5,941 +19% 44% +2% 4.1% -10bps 3.7% -10bps
Düsseldorf 694 -43% 1,336 -10% 56% -29% 4.1% -10bps 3.8% +/-0bps
Frankfurt 2,689 +151% 6,214 +22% 55% +2% 4.1% -20bps 3.5% +/-0bps
Hamburg 1,784 +39% 3,814 +4% 38% -12% 4.1% -10bps 4.0% -20bps
Cologne 694 +65% 1,651 +39% 32% +/-0% 4.4% -10bps 4.1% -10bps
Munich 2,569 +51% 5,189 +50% 40% -15% 3.8% -10bps 3.5% +/-0bps
Stuttgart 658 +18% 1,001 +2% 51% +19% 4.5% +/-0bps 4.2% +/-0bps
Germany* 23,781 +33% 46,846 +18% 43% -9% 4.2% -10bps 3.8% -6bps
Q2 2015
savills.de/research 03
Market in Minutes | Germany Investment Markets
Commercial investment market Germany+++ Special funds largest net investors | Prime yields moved in further +++
GRAPH 3
Transaction volume by locationGRAPH 4
Transaction volume by type of investor
Source: SavillsSource: Savills / * share of other locations 47% (past 12 months) and 49% (past 5 years) resp.
Property / Portfolio Type of use Location(s) Volume Buyer Vendor
Kaufhof portfolio Retail across Germany approx. €2,400m HbC / Simon Properties HbC
Odin portfolio Office across Germany approx. €625m** Orion Capital Managers Credit Suisse
Trianon Office Frankfurt approx. €540m NorthstarMadison Real Estate /
Morgan Stanley
Eurotower Office Frankfurt approx. €480m IVG RFR
mfi interest share Retail across Germany approx. €394m CPPIb Unibail-Rodamco
0%
10%
20%
30%
40%
50%
60%Germany
remaining Europe
North America
Asia/Pacific
Middle East
Other
past 12 month past 5 years
GRAPH 5
Transaction volume by origin of buyer
0%
1%
2%
3%
4%
5%
6%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q2
Office Prime High Street
GRAPH 6
Prime yields
Source: SavillsSource: Savills
0%
2%
4%
6%
8%
10%
12%
14%Berlin
Düsseldorf
Frankfurt
HamburgCologne
Munich
Stuttgart
past 12 month past 5 years
-9 -6 -3 0 3 6 9
Developer Corporate
Closed-ended fund Bank
Private-equity fund Open-ended public fund
Other asset manager Other
Public administration Leasing company
Housing association Sovereign wealth fund
Private investor / Family office Insurance company / Pension fund
Listed property company Open-ended special fund
€bn
Purchases, past 12 months Sales, past 12 monthsNet investments, Ø past 5 years Net investments, past 12 months
TAbLE 2
The largest transactions in Q2 2015 at a glance*
Source: Savills / * only published transactions are shown / ** latest market value
Q2 2015
savills.de/research 04
Market in Minutes | Germany Investment Markets
Commercial investment market Berlin+++ Transaction volume 12M +19% | Prime office yield with 10 bps. decrease +++
0.68
0.39
0.51
0.67
0.50
0.62
1.18
0.64
0.53
0.62
2.59
0.64
0.80
0.82
1.27
0.62
0.59
1.17
1.91
1.30
1.55
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2010 Q2
2010 Q4
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2012 Q4
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2015 Q2
€bn
€bn
transaction volume, quarterly (left axis)transaction volume, past 12 months rolling (right axis)
GRAPH 7
Transaction volume
0%
10%
20%
30%
40%
50%
60%Germany
remaining Europe
North America
Asia/Pacific
Middle East
Other
past 12 month past 5 years
GRAPH 9
Transaction volume by origin of buyer
0%
10%
20%
30%
40%
50%Office
Retail
Industrial / Logistics
Hotel
Development land
Other
past 12 month past 5 years
GRAPH 8
Transaction volume by sector
Source: Savills
-2 -1 0 1 2
Developer Closed-ended fund
Bank Private-equity fund
Open-ended public fund Public administration Housing association
Sovereign wealth fund Leasing company
Other Listed property company
Corporate Open-ended special fund
Private investor / Family office Insurance company / Pension fund
Other asset manager
€bn
Purchases, past 12 months Sales, past 12 monthsNet investments, Ø past 5 years Net investments, past 12 months
GRAPH 10
Transaction volume by type of investor
Source: Savills
Source: Savills
Source: Savills
• Almost €6bn was invested in commercial property in the German capital during the 12 months to June 2015. This represents an increase of 19% on the 12-month volume to the end of the first quarter.
• Compared with the other top markets in Germany, investment in berlin is more focused on b and C locations. This is reflected in the three largest office transactions of the first half-year: the acquisition of Stettiner Carree near the Nordbahnhof railway station by Allianz, the purchase of the Deutsche-bank-Campus at Ernst-Reuter-Platz by DAWM and the acquisition of an office complex in Lichtenberg by I-Reit Global.
• Since foreign investors in particular are still seeking investment opportunities in berlin and a number of major transactions are still pending completion, the second half of the year is likely to see a similar level of investment activity to the first, resulting in a transaction volume of at least €6bn for 2015.
Berlin market in minutesBerlin establishes itself as the investment capital
Q2 2015
savills.de/research 05
Market in Minutes | Germany Investment Markets
Commercial investment market Düsseldorf+++ Transaction volume 12M -10% | Prime office yield with 10 bps. decrease +++
0.24
0.26
0.59
0.09
0.20
0.35
0.48
0.11 0.
04
0.19
0.29
0.65
0.36
0.17
0.82
0.52
0.70
0.19
0.46
0.14
0.55
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2.5
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2010 Q2
2010 Q4
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€bn
€bn
transaction volume, quarterly (left axis)transaction volume, past 12 months rolling (right axis)
GRAPH 11
Transaction volume
0%
10%
20%
30%
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60%Germany
remaining Europe
North America
Asia/Pacific
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Other
past 12 month past 5 years
GRAPH 13
Transaction volume by origin of buyer
0%
10%
20%
30%
40%
50%
60%
70%Office
Retail
Industrial / Logistics
Hotel
Development land
Other
past 12 month past 5 years
GRAPH 12
Transaction volume by sector
Source: Savills
-0.4 -0.2 0.0 0.2 0.4
Corporate Private-equity fund Closed-ended fund
Open-ended public fund Developer
Other asset manager Public administration
Bank Housing association
Sovereign wealth fund Other
Leasing company Open-ended special fund
Insurance company / Pension fund Private investor / Family office
Listed property company
€bn
Purchases, past 12 months Sales, past 12 monthsNet investments, Ø past 5 years Net investments, past 12 months
GRAPH 14
Transaction volume by type of investor
Source: Savills
Source: Savills
Source: Savills
• The 12-month transaction volume to the end of June in Düsseldorf totalled approx. €1.3bn, representing a decrease of 10% compared with the corresponding figure to the end of the first quarter.
• Düsseldorf was the only top-six investment market to register a decline in its transaction volume, which was primarily attributable to a lack of transactions above €100m. Faced with a scarcity of such properties on the market, particularly in investors’ preferred core segment, investors are increasingly shifting their attention to smaller deals.
• Düsseldorf’s b locations are also benefiting from investors extending their search profiles to AbbA strategies. Furthermore, investors are increasingly prepared to pay higher prices for good opportunities in such locations. As a result, secondary locations are expected to witness stronger yield compression than the prime segment over the remainder of the year.
Düsseldorf market in minutesScarcity of large core assets causes decline in transaction volume
Q2 2015
savills.de/research 06
Market in Minutes | Germany Investment Markets
Commercial investment market Frankfurt+++ Transaction volume 12M +22% | Prime office yield with 20 bps. decrease +++
0.19
0.44
0.73
0.32
0.93
0.53
0.81
0.70 0.
09
0.36
1.61
0.86
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0.56
1.05
0.71
0.36
1.14
2.38
1.21
1.48
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2010 Q2
2010 Q4
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2015 Q2
€bn
€bn
transaction volume, quarterly (left axis)transaction volume, past 12 months rolling (right axis)
GRAPH 15
Transaction volume
0%
10%
20%
30%
40%
50%
60%Germany
remaining Europe
North America
Asia/Pacific
Middle East
Other
past 12 month past 5 years
GRAPH 17
Transaction volume by origin of buyer
0%
20%
40%
60%
80%Office
Retail
Industrial / Logistics
Hotel
Development land
Other
past 12 month past 5 years
GRAPH 16
Transaction volume by sector
Source: Savills
-2 -1 0 1 2
Other asset manager Developer
Bank Closed-ended fund
Open-ended public fund Corporate
Public administration Housing association
Sovereign wealth fund Leasing company
Private-equity fund Other
Private investor / Family office Insurance company / Pension fund
Listed property company Open-ended special fund
€bn
Purchases, past 12 months Sales, past 12 monthsNet investments, Ø past 5 years Net investments, past 12 months
GRAPH 18
Transaction volume by type of investor
Source: Savills
Source: Savills
Source: Savills
• More than €6.2bn was invested in commercial property in Frankfurt during the 12 months to the end of June 2015. This represents an increase of 22% on the corresponding figure to the end of the first quarter.
• The office sector dominated market activity during the first half of 2015, not least due to a scarcity of retail property. Offices accounted for more than 80% of investment during the period. Investors’ interest remains primarily focused on the core and core plus segments, although activity in the value-add area has recently increased significantly. This is illustrated by the large number of property sales in b locations. Five properties have changed hands in Niederrad alone during the current year.
• The high proportion of foreign purchasers has further increased pressure on yields as investors assess Frankfurt in an international context. Indeed, compared with other major cities worldwide, Frankfurt remains relatively inexpensive. Consequently, yields are likely to harden further across all market segments.
Frankfurt market in minutesYields harden as foreign investment grows
Q2 2015
savills.de/research 07
Market in Minutes | Germany Investment Markets
Commercial investment market Hamburg+++ Transaction volume 12M +4% | Prime office yield with 10 bps. decrease +++
0.08
0.23
0.93
0.63
0.63
0.54
0.46
0.46
0.19
0.40
0.67
0.49
0.58
0.47
1.32
0.53
0.75
0.63
1.40
0.89
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€bn
€bn
transaction volume, quarterly (left axis)transaction volume, past 12 months rolling (right axis)
GRAPH 19
Transaction volume
0%
10%
20%
30%
40%
50%
60%
70%Germany
remaining Europe
North America
Asia/Pacific
Middle East
Other
past 12 month past 5 years
GRAPH 21
Transaction volume by origin of buyer
0%
20%
40%
60%
80%Office
Retail
Industrial / Logistics
Hotel
Development land
Other
past 12 month past 5 years
GRAPH 20
Transaction volume by sector
Source: Savills
-1.0 -0.5 0.0 0.5 1.0
Open-ended public fund Developer Corporate
Other asset manager Listed property company
Leasing company Housing association
Other Bank
Sovereign wealth fund Public administration
Closed-ended fund Private-equity fund
Insurance company / Pension fund Private investor / Family office
Open-ended special fund
€bn
Purchases, past 12 months Sales, past 12 monthsNet investments, Ø past 5 years Net investments, past 12 months
GRAPH 22
Transaction volume by type of investor
Source: Savills
Source: Savills
Source: Savills
• The 12-month transaction volume to the end of June 2015 in Hamburg reached just over €3.8bn, representing a 4% increase on the corresponding figure from three months earlier.
• It is noteworthy that transaction activity was almost exclusively limited to the office sector. Offices accounted for almost €1.4bn of investment, which represented almost three quarters of the total transaction volume. The main reason for the relatively low transaction volume in the retail sector (approx. €0.2bn) is the low liquidity on the supply side. Owners of retail property remain reluctant to dispose of their investments.
• Properties in prime locations are also rare in the office segment, causing investment activity to shift further into b locations. Altona has been a particular focus of attention over the last two years and a number of deals are likely to be completed in the City South submarket. A number of properties are also expected to come to the market in City North. Risk premiums in such locations are likely to be eroded further as investors are prepared to pay higher prices.
Hamburg market in minutesOffice deals dominate, particularly in B locations
Q2 2015
savills.de/research 08
Market in Minutes | Germany Investment Markets
Commercial investment market Cologne+++ Transaction volume 12M +39% | Prime office yield with 10 bps. decrease +++
0.26
0.08
0.18
0.13
0.20
0.29
0.13
0.14 0.
03
0.26
0.17
0.25
0.09 0.
03
0.49
0.30
0.12
0.17
0.79
0.11
0.58
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1.6
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2010 Q2
2010 Q4
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2011 Q2
2012 Q4
2013 Q2
2013 Q4
2014 Q2
2014 Q4
2015 Q2
€bn
€bn
transaction volume, quarterly (left axis)transaction volume, past 12 months rolling (right axis)
GRAPH 23
Transaction volume
0%
10%
20%
30%
40%
50%
60%Germany
remaining Europe
North America
Asia/Pacific
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Other
past 12 month past 5 years
GRAPH 25
Transaction volume by origin of buyer
0%
10%
20%
30%
40%
50%
60%Office
Retail
Industrial / Logistics
Hotel
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Other
past 12 month past 5 years
GRAPH 24
Transaction volume by sector
Source: Savills
-0.6 -0.4 -0.2 0.0 0.2 0.4 0.6
Insurance company / Pension fund Developer Corporate
Bank Open-ended public fund
Private-equity fund Other
Leasing company Open-ended special fund
Sovereign wealth fund Housing association
Public administration Private investor / Family office
Closed-ended fund Other asset manager
Listed property company
€bn
Purchases, past 12 months Sales, past 12 monthsNet investments, Ø past 5 years Net investments, past 12 months
GRAPH 26
Transaction volume by type of investor
Source: Savills
Source: Savills
Source: Savills
• Almost €1.7bn was invested in commercial property in Cologne during the 12 months to the end of June 2015, representing an increase of 39% compared with the corresponding figure to the end of the first quarter.
• Transaction activity during the first half of 2015 was particularly characterised by smaller transactions. Only the barthonia-Forum and the Kaufhof property on Hohe Straße changed hands for more than €100m during the period. The latter formed part of the department store portfolio sold by HbC. The average transaction size across all properties sold was just over €18m, which was significantly higher than the previous year’s figure (approx. €12m).
• Owing to the high demand, yields remained under pressure during the second quarter. In the prime segment, yields hardened by 10 basis points on both offices and high-street properties to 4.4% and 4.1% respectively. Further slight compression is expected over the coming months.
Cologne market in minutesTwo large transactions in a market of otherwise small deals
Q2 2015
savills.de/research 09
Market in Minutes | Germany Investment Markets
Commercial investment market Munich+++ Transaction volume 12M +50% | Prime office yield with 10 bps. decrease +++
0.18
0.09
0.29
0.22
0.45
0.61
0.86
0.33
0.68
0.55
1.14
0.74
0.57
0.88
2.25
1.10
0.60
1.20
1.42
1.04
1.53
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2010 Q2
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€bn
€bn
transaction volume, quarterly (left axis)transaction volume, past 12 months rolling (right axis)
GRAPH 27
Transaction volume
0%
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remaining Europe
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GRAPH 29
Transaction volume by origin of buyer
0%
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20%
30%
40%
50%
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70%Office
Retail
Industrial / Logistics
Hotel
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Other
past 12 month past 5 years
GRAPH 28
Transaction volume by sector
Source: Savills
-1.0 -0.5 0.0 0.5 1.0
Developer Other asset manager
Other Private investor / Family office
Private-equity fund Corporate
Bank Public administration Housing association
Leasing company Listed property company
Closed-ended fund Insurance company / Pension fund
Sovereign wealth fund Open-ended public fund
Open-ended special fund
€bn
Purchases, past 12 months Sales, past 12 monthsNet investments, Ø past 5 years Net investments, past 12 months
GRAPH 30
Transaction volume by type of investor
Source: Savills
Source: Savills
Source: Savills
• Around €5.2bn was invested in commercial property in Munich during the 12 months to the end of June 2015. This represents an increase of more than 50% compared with the corresponding figure for the 12 months to the end of the previous quarter.
• The three largest office transactions were the acquisition of a majority share in the Siemens Campus by a joint venture between Pramerica and Chinese sovereign wealth fund Gingko Tree, the purchase of 88north by Amundi and the acquisition of the Leitwerk by Real I.S. All three properties are situated in b locations in Munich. With owners of core properties still reluctant to sell, many investors are expanding their search profiles and are increasingly shifting their attention to b locations as well as the value-add segment.
• Against this background, net initial yields on office properties in b locations are likely to harden by a further 20 basis points by the end of the year. Slight yield compression is also expected in the prime segment.
Munich market in minutesTransaction volume continues upward trend, yield compression intensifies
Q2 2015
savills.de/research 10
Market in Minutes | Germany Investment Markets
Commercial investment market Stuttgart+++ Transaction volume 12M +2% | Prime office yield stable at 4.5% +++
0.02
0.15 0.
02 0.04
0.03
0.15
0.14
0.16
0.05
0.42
0.21
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0.32
0.19
0.13
0.43
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0.21
0.45
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€bn
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transaction volume, quarterly (left axis)transaction volume, past 12 months rolling (right axis)
GRAPH 31
Transaction volume
0%
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70%Germany
remaining Europe
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past 12 month past 5 years
GRAPH 33
Transaction volume by origin of buyer
0%
10%
20%
30%
40%
50%Office
Retail
Industrial / Logistics
Hotel
Development land
Other
past 12 month past 5 years
GRAPH 32
Transaction volume by sector
Source: Savills
-0.3 -0.2 -0.1 0.0 0.1 0.2 0.3
Developer Bank
Private-equity fund Private investor / Family office
Corporate Other asset manager
Closed-ended fund Insurance company / Pension fund
Other Public administration
Sovereign wealth fund Leasing company
Housing association Listed property company Open-ended special fund Open-ended public fund
€bn
Purchases, past 12 months Sales, past 12 monthsNet investments, Ø past 5 years Net investments, past 12 months
GRAPH 34
Transaction volume by type of investor
Source: Savills
Source: Savills
Source: Savills
• Almost exactly €1bn was invested in commercial property in Stuttgart between July 2014 and June 2015. This represents an increase of 2% on the corresponding figure from the first quarter of 2015.
• The preferred locations of most investors are the city centre as well as the airport and its surrounding area. For risk-averse investors in particular, Stuttgart is an extremely attractive market in the current environment. Core properties are not yet as expensive in the city compared with elsewhere, despite Stuttgart’s economic fundamentals competing with those of the other top markets.
• Moderate yield compression is therefore expected in the prime segment over the coming months. The reluctance of most landlords to sell their property is likely to exert additional pressure on yields.
Stuttgart market in minutesAttractive environment for core investors
Q2 2015
savills.de/research 11
Market in Minutes | Germany Investment Markets
Commercial portfolio investment market Germany+++ Transaction volume 12M +37% | Share of retail portfolios at 45% +++
0.69
1.00
1.82
1.17
2.02
1.21
1.33
0.84
0.95
4.44
2.31
1.10
0.73
3.39
5.43
1.90
1.93
5.32
2.77
6.27
0
3
6
9
12
15
18
21
0
1
2
3
4
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2010 Q3
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2015*
€bn
€bn
transaction volume, quarterly (left axis)transaction volume, past 12 months rolling (right axis)
GRAPH 35
Transaction volume
0%
10%
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remaining Europe
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past 12 month past 5 years
GRAPH 37
Transaction volume by origin of buyer
0%
10%
20%
30%
40%
50%Office
Retail
Industrial / LogisticsHotel
Other
past 12 month past 5 years
GRAPH 36
Transaction volume by sector
Source: Savills
-6 -4 -2 0 2 4 6
Open-ended public fund Closed-ended fund
Bank Developer
Other asset manager Other
Housing association Leasing company
Public administration Sovereign wealth fund
Private investor / Family office Private-equity fund
Corporate Insurance company / Pension fund
Open-ended special fund Listed property company
€bn
Purchases, past 12 months Sales, past 12 monthsNet investments, Ø past 5 years Net investments, past 12 months
GRAPH 38
Transaction volume by type of investor
Source: Savills
Source: Savills / * forecast
Source: Savills
• The transaction volume for German commercial property portfolios totalled €16.3bn for the 12 months to the end of June. This represents an increase of 37% on the corresponding figure to the end of the first quarter.
• There is significant momentum on both the supply and demand side. The high pressure to invest is increasingly attracting investors to the portfolio segment and owners are taking advantage of the favourable market environment to bring portfolios to the market.
• Foreign investors were on the purchaser side in two out of three portfolio transactions. Furthermore, since their acquisitions were above average in size, this group accounted for almost 85% of the overall transaction volume. Investors from North America and the United Kingdom in particular are surging into the German portfolio segment. On the vendor side, domestic investors were significantly more active than they were as purchasers, accounting for 50% of disposals. As a result, this group made net portfolio disposals totalling approx. €3bn during H1.
German commercial portfolio market in minutesForeigners are buying, Germans are selling
Q2 2015
savills.de/research 12
Market in Minutes | Germany Investment Markets
Residential portfolio investment market Germany+++ Transaction volume 12M +21% | Price per unit increased to €68,100 +++
0.52
0.76
0.91
0.97
1.86
1.48
3.58
2.68
1.46
3.08
1.45
4.29
2.92
5.39
5.28
2.05
2.12
3.55
9.32
6.47
0
3
6
9
12
15
18
21
24
27
30
0
1
2
3
4
5
6
7
8
9
10
2010 Q3
2011 Q1
2011 Q3
2012 Q1
2012 Q3
2013 Q1
2013 Q3
2014 Q1
2014 Q3
2015 Q1
2015*
€bn
€bn
transaction volume, quarterly (left axis)transaction volume, past 12 months rolling (right axis)
GRAPH 39
Transaction volume
Berlin21%
Dresden12%
Kiel4%
Mönchen-gladbach
5%Bremen
4%
Other55%
GRAPH 41
Transacted units by location*
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2007 2008 2009 2010 2011 2012 2013 2014 2015 H1
Num
ber
of U
nits
100 < 800 units 800 < 2,000 units< 5,000 units < 10,000 units10,000+ units Units per transaction
GRAPH 40
Size of portfolios transacted
Source: Savills
0%
10%
20%
30%
40%
50%A
B
CD
Other
past 12 months past 5 years
GRAPH 42
Transacted units by type of city*
Source: Savills / * based on the bulwiengesa classification
Source: Savills / * forecast
Source: Savills / * past 12 months
• The transaction volume for German residential portfolios totalled approx. €21.7bn over the last 12 months. This represents an increase of 21% on the corresponding figure to the end of the first quarter of 2015.
• The pursuit of expansion is a particular driver of the current momentum in the German residential investment market. This is particularly true of listed residential property companies, who have been responsible for 80% of the overall transaction volume this year. The acquisition of Gagfah by Deutsche Annington alone accounted for more than half of the transaction volume in the first half of the year.
• The continued huge demand for German residential property is not only reflected in the transaction volume but also in price growth. The price paid per unit stood at approx. €68,100 during the first half of 2015; an increase of 26% on the previous year. The strong price growth is resulting in increasing willingness to sell, even among those investors who originally envisaged longer holding periods.
German residential portfolio market in minutesTransaction volume doubles, prices rise by a quarter
Q2 2015
savills.de/research 13
Market in Minutes | Germany Investment Markets
Residential portfolio investment market Germany+++ Share of domestic buyers at 86% | Listed companies were largest net investors +++
0%
20%
40%
60%
80%
100%Germany
remaining Europe
North America
Asia/Pacific
Middle East
Other
past 12 month past 5 years
GRAPH 43
Transaction volume by origin of buyer
-15 -12 -9 -6 -3 0 3 6 9 12 15
Insurance company / Pension fundDeveloperCorporate
Other asset managerPrivate-equity fund
Private investor / Family officePublic administration
Open-ended public fundBank
Leasing companyOther
Sovereign wealth fundClosed-ended fund
Housing associationOpen-ended special fundListed property company
€bn
Purchases, past 12 months Sales, past 12 monthsNet investments, Ø past 5 years Net investments, past 12 months
GRAPH 45
Transaction volume by type of investor
0%
20%
40%
60%
80%
100%Germany
remaining Europe
North America
Asia/Pacific
Middle East
Other
past 12 month past 5 years
GRAPH 44
Transaction volume by origin of seller
Source: Savills
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2010 Q2
2010 Q4
2011 Q2
2011 Q4
2012 Q2
2012 Q4
2013 Q2
2013 Q4
2014 Q2
2014 Q4
2015 Q2
€/sq
m
Average price per unit, past 12 months rolling
GRAPH 46
Development of prices*
Source: Savills / * for portfolios with at least 100 units each
Source: Savills
Source: Savills
Portfolio Number of units Volume Buyer Vendor
Südewo approx. 19.800 approx. €1,900m Deutsche Annington Patrizia et al.
Obligo approx. 13.500 undisclosed Patrizia Obligo Investment Management
Westgrund approx. 15.300 approx. €790m Adler Real Estate Westgrund
- approx. 4.500 undisclosed Deutsche WohnenReggeborgh Vastgoed
beleggingen
- approx. 8.500 undisclosed Grand City Adurion
TAbLE 3
The largest residential portfolio transactions in Q2 2015 at a glance*
Source: Savills / * only published transactions are shown
Market in Minutes | Germany Investment Markets Q2 2015
savills.de/research 14
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Savills is a leading global real estate service provider listed on the London Stock Exchange. The company, established in 1855, has a rich heritage with unrivalled growth. It is acompany that leads rather than follows and now has over 600 offices and associates throughout the Americas, Europe, Asia Pacific, Africa and the Middle East with more than27,000 employees worldwide. Savills is present in Germany with around 160 employees with seven offices in the most important estate sites berlin, Dusseldorf, Frankfurt, Hamburg, Cologne, Munich and Stuttgart.
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