In the early part of 2015, investment transactions in Hamburg dazzled with a total of €750m. Year on year, the first-quarter result is about one third higher. This emerges from figures released by property services provider Grossmann & Berger. There was barely any change in the actual number of transactions. “The pronounced upwards trend observed in 2014 proved its durability in the first quarter of 2015. To date, at least as far as Hamburg is concerned, we cannot confirm that the forecast influx of capital from Asia has materialized,” comments Axel Steinbrinker
, managing director of Grossmann & Berger.Sale of the “W1” makes Wandsbek second-biggest sub-market
In the 1st quarter, activity was concentrated in Hamburg’s central sub-markets, City and HafenCity. Altogether eleven properties valued at €480m changed hands here, equivalent to some 64% of the total volume of transactions. These included the purchase of part of the Axel-Springer complex at Caffamacherreihe 3 (City) which was sold to the Free and Hanseatic City of Hamburg for €130.6m to provide offices for Hamburg-Mitte Borough Council - the biggest transaction of the year to date. Wandsbek emerged as the second-biggest sub-market and strongest of the non-central city districts, accounting for about 11% of the volume of transactions. This was primarily attributable to the “W1” shopping centre, which is still under construction at Wandsbeker Marktstrasse 1-5, and was sold by the builder HBB Hanseatische Betreuungs- und Beteiligungsgesellschaft mbH to a specialist fund managed by the KGAL-Gruppe for a price in the upper double-digit millions bracket.Hotel assets boosted by the sale of the “Sofitel” complex
In the 1st quarter of 2015 office properties remained investors’ preferred asset class, accounting for about 60% of the volume of transactions. These included the portfolio sale of three office buildings, “S-KAI” (Am Sandtorkai 50, HafenCity), “Hamburg-America-Center” (Am Sandtorkai 48, HafenCity) and “Coffee Plaza” (Am Sandtorpark 2-6, HafenCity), which Pembroke Real Estate acquired from Norrporten for a total in excess of a hundred millions. The next most popular asset class was retail, with transactions totalling some €145m and a share of 19%. Two transactions served to move hotel properties into third place with a share of 15%, largely due to the second-highest transaction registered to date, the sale of the “Sofitel” complex (Alter Wall 38-40, City) to Art-Invest Real Estate for a price in the upper double-digit millions bracket. Premium returns for office properties remained stable at the low level of 4.5%. “Due to exceptionally high demand the premium return for retail properties has also fallen by 0.2 percentage points, from 4.7 to 4.5%. Premium returns for warehousing, logistics and industrial properties slipped from 7.2 to 6.75%,” says Steinbrinker
.National investors predominant
In the 1st quarter of 2015 Hamburg’s investment market was dominated by national players, whose share of transaction volume was some 68%. Year on year the proportion of foreign investors declined very slightly from 36 to about 32%. International investors from countries such as the USA and the UK spent some €240m on commercial properties in Hamburg during the 1st quarter of the year. Compared with the same period of the prior year, the share of foreign vendors grew from about 19 to 42%. Market players from Sweden, the UK and Luxembourg were among the biggest sellers of commercial properties in Hamburg.Asset managers buying, developers selling
On the buying side of the equation, asset managers were the single biggest group of investors in the 1st quarter of 2015; their outlay of €204m was equivalent to 27% of total transactions. Open end/specialist funds took the second-highest share with €182m, or 24% of the total. Project and property developers sold commercial real estate in Hamburg for around €200m, accounting for a 27% share of the transaction volume.Outlook 2015
“Demand is unabated. New project developments are, however, rare or have only recently been “flipped”. Prominent examples include the Stadthoefe, the Heights, the Burstah Offices, the Fleet Office and the southern Uebersee Quarter. Since stock properties such as the Dancing Towers and the Atlantic House were sold only last year, the range of available, top-class real estate in Hamburg is not very large. This circumstance could make it hard to attain the excellent result returned in the prior year. Premium returns will decline further. At the same time, low interest rates, the location’s considerable economic strength and the general need to find investment opportunities will act in favour of transactions on the Hamburg market. Increasingly, we are observing a trend towards portfolio selling,” says Steinbrinker
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