56 transactions on the market for commercial properties were reported in Hamburg totalling €2.3bn at the close of the 1st half of 2018. Year on year, the result has soared by 70 %. Adding to the two sales for over €100m each in the 1st quarter, two more big transactions followed in the 2nd quarter. “Once again, Hamburg has produced a record result. In the first half of the year not only were four properties traded for more than 100 million euros each, but seven commercial properties costing over 50 million euros a piece also changed hands. For Hamburg, this is an unusually large number of big-ticket trades,” says Axel Steinbrinker
, managing director of Grossmann & Berger, a member of German Property Partners
Twice as many transactions for more than €50m each
The 1st quarter sale of the “Springer Quartier” (Kaiser-Wilhelm-Strasse, City) was the biggest transaction in the 1st half year; a joint venture comprising the MOMENI Group and Black Horse Investments sold the property for some €400m to a company that manages professionals’ pensions. And in the 2nd quarter Blackstone sold the “Sumatrakontor” (Überseeallee 1-3, HafenCity) for around €190m to REAL I.S. The next-biggest transaction in the €100m plus bracket was the sale of the mixed use property “LaHoMa” (Langenhorner Markt 1-18, Hamburg East) that was announced in the 1st quarter. Single transactions for over €100m thus comprised 43% of the total volume traded. Seven sales were noted in the €50 to €100m price category with a total value of €518m and 23% of the total market. These transactions included the “Courtyard by Marriott” hotel, part of the “Konrad” development (Adenauerallee 52-56, St. Georg) which was purchased by the Zurich Group from the developer ABG.
Hotel assets gain in popularity
Office buildings were the most traded asset class, accounting for 60% of the trading volume and a total of €1.4bn. The biggest transactions, “Springer Quartier” and “Sumatrakontor” fell into this group. Hotel properties, which accounted for a share of 12 % (€276m) were the second most popular type of asset. Four hotels were traded in the 1st quarter and an additional five changed hands in the 2nd quarter. Apart from the biggest trade, the “Courtyard by Marriott” in the “Konrad” development, the hotel called “Bridge Inn Hamburg” (Billwerder Neuer Deich 2-4, Hamburg East) passed into new ownership. As part of a corporate purchase, the Bavarian hotel operator GS Star bought the hotel from BI Hamburg for a seven-figure amount. “Although office blocks remain the favourite asset, investors are taking an increasing interest in Hamburg’s hotel properties. That is due to the growing tourist trade, but the large number of interesting hotel developments plays a part too,” comments Steinbrinker
. Mixed use properties squeezed into third place in the asset rankings, posting sales of €170m (7%) and just ahead of retail properties with total sales of €150m (likewise 7%).
Prime yields continue to slide
Prime yields on all asset classes fell further below the levels seen a year before. The prime net yield on offices and commercial buildings in Hamburg was below the 3 per cent mark, dropping 0.4 percentage points to 2.9%. On logistics properties the prime net yield slipped from 4.9 to 4.6%.
Highest sales volume in City, largest number of sales in Hamburg East
In the 1st half year eight properties in the City
sub-market changed hands for a total of €669m. This translates into a share of 29% of the market, and City thus remained the most sought-after location. City South
followed in second place with seven commercial properties sold and a 17% market share (€400m). Trades here included Dieter Becken’s sale of the firm’s shareholding in the “Berliner Bogen” (Anckelmannsplatz 1) to the Körber Stiftung, a foundation, which is now the sole owner of this office building. The third-ranked sub-market was Hamburg East
with a share of 15% (€350m). “Fourteen transactions in the east of Hamburg illustrate that very few owners of core properties in central locations are willing to sell their assets,” remarks Steinbrinker.
“Apart from one office property, all the commercial real estate traded in the Hamburg East sub-market belongs to other asset classes.” 2nd-quarter sales in Hamburg East include:
Buyers: Professional pension schemes/pension funds. Vendors: Project developers
Heidhorst 4 (Lohbrügge), specialist fund set up by Schroeders Real Estate, sold to Hahn Gruppe, retail, size category €11m to €25m
Hammer Landstrasse 220 (Hamm), non-disclosure of parties involved, mixed use, size category €10m or less
Neuer Höltigbaum 1-3 (Rahlstedt), sold to private investor by Goldbeck, industrial/logistics property, size category €10m or less
With a share of 30% (€679m) professional pension schemes and pension funds were the biggest group of buyers
on the market for commercial real estate investments in Hamburg during the 1st half of 2018. Specialist funds followed in second place with a share of some 15 % (€340m ). International buyers were noticeably less active than in the prior year, accounting for a share of 19% of the total traded (€442m).
As a group, project developers were easily the most dominant vendors
, accounting for 48% of the market (€1.1bn). With shares of 16% (€363m) and 15% (€354m) respectively, private equity/opportunity funds and open-end property funds were the only other investors taking more than ten per cent of the market. National players also predominated the selling side of the market, with a 69% share of the volume traded (€1.6bn).
Trading remains brisk
“Although the market is practically sold out, we can see no downturn in trading. Investors are still very willing to buy and enough building developments that have not yet been sold remain on the market. Developers are, moreover, actively seeking to buy existing properties and plots of land in order to begin new projects. It is therefore highly likely this year’s total will exceed the 3.6 billion euros traded last year and that 2018 will close at more than 4.0 billion euros,” forecasts Steinbrinker
The full market survey
will soon be available as download on our website.
Source, chart: Grossmann & Berger GmbH