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Upwards Trend on Hamburgs Investment Market Further Consolidated

Turnover on the commercial transaction market of the Hanseatic city at the end of the first half-year of 2010 amounted to around 505 million euros. As compared to the same period of the previous year, with a transaction volume of 230 million euros, the result has therefore more than doubled. "Despite this very positive development, the second quarter was fairly quiet. As in the previous year, the main activity is expected to take place in the third and fourth quarters," said Christoph Ringleben, Managing Director of Colliers Grossmann & Berger.

Upwards Trend Despite Qualms About the Euro

The reason is that there are still no attractive and alternative forms of investment to real estate. "In particular there is a lack of core products, because the owners are disinclined to consider selling. Another aggravating circumstance is the wait-and-see attitude regarding the economic development within the euro region," added Christoph Ringleben. Nevertheless, the results to date can be seen as very positive, since the upwards swing of the previous year has meanwhile become an upwards trend.

More Financing for Foreign Investors

Of the sales concluded, developers and building contractors accounted for a share of 40 percent, followed by open investment funds with a share of 25 percent. The share of foreign sellers, accounting for 23 percent of the transaction volume, was almost unchanged as compared to the same period of the previous year.The buyer structure in the second quarter proved very homogeneous. The developers and building contractors were the most active group, accounting for a share of 25 percent of purchases, followed closely by the open investment funds and private investors, each with a share of 23 percent. Insurances accounted for a further share of 22 percent of the transaction volume. "Almost a third of all buyers came from abroad. In contrast to the previous year they are again receiving financing and can therefore invest to a greater extent in the traditionally stable German market," stated Christoph Ringleben.

Focus on Inner-City Office Buildings

The main focus of investor interest was on office real estate in the City, this accounting for a share of 50 percent of the entire transaction volume. In second place, with a share of almost 30 percent, came the retail-trade real estate, and then the logistics properties with a 10 percent share. The high share recorded for retail-trade transactions is accounted for by the sale of Karstadt Sport located at Lange Mühren 14 in Hamburg's inner city. With a purchase price of around 55 million euros, this was the biggest transaction undertaken in the second quarter. The buyer of the former high-street property was the Comfort Group.

Trust in the Market has Increased

In the second quarter, the top returns for offices lay at 4.80 percent and thus 20 basis points lower than in the same period of the previous year. "This development indicates a stable market situation, because the investors are again willing to accept lower returns," said Christoph Ringleben. For retailer properties top rents remained stable at about 5 percent, following 5.2 percent for the same period of the previous year.

Good Medium-Term Prospects

"Activities on the investment market in the Hanseatic city will, in our view, continue to improve. The focus of interest at present lies mainly in the properties themselves and their quality, and less on the cash-flow aspects," said Christoph Ringleben summarizing the half-year results.

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