Invest Berlin 3Q2019

The market for investment in commercial properties in Berlin goes from strength to strength. By the close of the 3rd quarter the transaction volume had reached some €8.2bn - twice as high as in the same period of 2018 (€4.1bn). The previous record set in 2015, when the year-end total was €7.8bn, has already been broken. “A remarkable feature is that by far the biggest slice of this extremely high volume of trading - eighty per cent - is comprised of single property trades. Numerous deals involved nine-figure price-tags. We now expect the final total for the year to exceed ten billion euros, because several other big-ticket transactions are nearing completion,” forecasts Holger Michaelis, managing director of Grossmann & Berger, a member of German Property Partners (GPP).

Market details:

• 22 transactions (65 %) of the total sold traded at prices north of €100m. In the 3rd quarter, for example, Edge Technologies sold the “East-Side Tower” in Friedrichshain to the Bavarian civil service pension fund Bayerische Versorgungskammer and Allianz Real Estate. This was the biggest new agreement.
• Professionals’ pension schemes and pension funds were the biggest group of buyers, taking 19 % of the total traded, followed by open-ended property funds (13 %). Almost half of the volume of transactions (48 %) was attributable to purchases made by international investors (2018: 65 %).
• Once again, office properties were the most sought-after class of assets, taking 68 % of the market (2018: 52 %).
• The prime yield on office properties was 2.9 % and thus slightly below the prior year (3.0 %). Prime yields on commercial buildings stabilized at 2.9 %.    
• Commercial properties in central city locations comprised 25 % of the trading volume – slightly higher than the prior year’s 22 %.

Investment market | Berlin | 2019	Q 1-3
Transaction volume [€ millions]	8,160
against prior yr [%]	+99
Share of trading in CBD [%]	25
Proportion of international investors [%]	48
Prime net yield, office [%]	2.9
against prior yr [percentage points]	-0.1
Prime net yield, commercial buildings [%]	2.9
against prior yr [percentage points]	±0
Prime net yield, logistics properties [%]	4.2
against prior yr [percentage points]	-0.2
Strongest asset class	Offices
Strongest asset class [%]	68

Selected top transactions | investment market | Berlin | 1st-3rd quarters of 2019

Project/property Street no.	Sub-market	Asset class	Buyer/investor	Vendor	Purchase price* [approx. €m]
„Oberbaum-City”, Rotherstraße	Friedrichshain	Offices	Blackstone Group	UniCredit (HVB)	475
„Pressehaus am Alexanderplatz / New Podium“, Karl-Liebknecht-Straße 27-29	Mitte	Offices	GEG German Real Estate Group	Tishman Speyer	365
„Zoom”, Joachimsthaler Straße 4	Ku’damm plus side roads	Mixed Use	Bayerische Versorgungskammer BVK	Hines Immobilien	265
„The West Light Berlin”, Budapester Straße 35	Ku’damm plus side roads	Offices	Generali Deutschland Immobilien	Barings	200
„Carrée Seestraße / Osram-Höfe“, Seestraße 64	Peripherie North	Offices	Cording Real Estate Group	Deutsche Real Estate	225
„East-Side-Tower“, Tamara-Danz-Straße 1	Friedrichshain	Offices	Bayerische Versorgungskammer BVK and Allianz Real Estate	Edge Technologies	confidential
* The purchase prices stated are based on publicly available data, where none is available an estimate is made; new transactions or those occurring in the quarter dealt with in this report are highlighted.

 























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