36 transactions involving commercial property in Hamburg generated sales of some €900m by the end of the 1st quarter of 2016. Compared with the prior year, this represents an increase of one fifth. The brisk trading seen in the 1st quarter was thus a seamless continuation of the record year 2015, when the volume of transactions reached €4.0bn. Commenting on the market Axel Steinbrinker
, managing director of Grossmann & Berger, says, “This development shows that demand for investments in Hamburg is unabated. Investors continue to concentrate their search on core and value-add properties in the City, but the shortage of supply prompts them to buy well-let real estate in off-centre districts.” Unlike in 2015, no portfolio transactions have been recorded this year to date.City North starts year well
After the City and HafenCity sub-markets, which together accounted for transactions valued at €217.8m and thus a share of 24% of the total, City North finished the 1st quarter of 2016 as second-highest trading sub-market with a share of 19%. The biggest transaction of the year thus far made a key contribution to this outcome. Amundi purchased the “Telekom Campus” (Überseering 2) office complex that is still under construction but already let to Telekom, paying the project developer TAS KG over €120m. The second-biggest transaction was the sale of the old Commerzbank building (Neß 7-9) to project developers Procom Invest and OFB for a price in the upper range of double-digit millions. The third-biggest transaction was the sale of an office building in the Alster East sub-market, likewise for a sum in the tens of millions. This propelled Alster East into third place in the ranking of sub-markets, with a share of some 10%. “Overall, four properties were traded for prices over €70m in the 1st quarter,” says Steinbrinker
.Five hotels change hands
With a 73% share of the transaction volume, equivalent to some €659m, office properties were the most-traded investments in the 1st quarter of 2016. Hotels accounted for 15% of the volume of transactions or €135m. One of the five hotels sold in the 1st quarter of 2016 was the Accor/Ibis complex at Holstenkamp 1-3 which Kildare Partners sold to ImmoKG for over €10m. Building land was the third most popular asset class, comprising some 6% of the volume of transactions.
Premium yields for office and retail assets fell year on year from 4.5% to 4.0%; industrial/warehousing/ logistics assets registered a fall from 6.75% to 6.0%. Steinbrinker
remarks that, “The ongoing excess of demand over supply and the lack of alternative investments will continue to squeeze returns.”International players very active
In the 1st quarter of 2016 Hamburg’s commercial real estate market was dominated by national players. Foreign buyers accounted for 31% of the transaction volume. Most of these investors came from the UK, France and Switzerland. International vendors were involved in 19% of market activity.
The biggest single group of investors was comprised of asset/portfolio managers with a share of some 25% (about €226m) of the transaction volume. Open-end/specialist funds took the second-highest share with €176m, or 20% of the total. Project developers/builders sold commercial real estate in Hamburg for a total of some €305m, thus accounting for the biggest share (34%) of the transaction volume. Open-end/specialist funds followed in second place with a share of some 21% (€193m).Outlook 2016
“The successful start to the year indicates that 2016 will be a good year. The shrinking supply could, however, hold this rapid growth back a little. Our view is that the volume of transactions will be somewhere between the closing figures for 2014 and 2015, at around €3.7bn,” forecasts Steinbrinker
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Permission is given to use the attached chart (source: Grossmann & Berger).