By the end of the 1st half of the year, the volume of investment transactions in commercial property in Hamburg had set another record - at €2.0 bn. This was 3% higher than in the same period of the year before. Commenting on the market, Axel Steinbrinker
, managing director of Grossmann & Berger, says, “Altogether 77 properties and plots of building land within the borders of Hamburg city-state changed hands - 44 pieces of real estate were outside the central locations. Demand is still unabated and everything points to another strong year for investments. However, so far nine transactions were portfolio sales, which is on the low side compared with 19 in the prior year.”Eastern Hamburg posts second-highest transaction volume
After the centrally located City and HafenCity sub-markets, which together accounted for transactions valued at €982m and thus a share of around 49% of the total, East Hamburg finished the 1st half of 2016 as second-highest trading sub-market with a share of about 11% (€222m). This owed much to the sale of four retail properties at a total price of some €165m. “The ongoing severe shortage of desirable properties in central locations is causing investors to shift their attention to Hamburg’s districts. 25 properties alone were traded in peripheral locations,” says Steinbrinker
. Of the top 3 transactions, each involving an amount of more than €100m, two were properties in Hamburg City and one, the “Telekom Campus”, which Amundi acquired in the 1st quarter from the developer TAS KG, was in City North (Überseering 2).44 office transactions
The preferred asset class was the office property, and 44 such buildings were traded for a total amount of €1.3 bn. Retail properties were second in popularity, accounting for a share of 15% and a transaction total of €300m. Accounting for around 11% (some €230m) hotels were in third place. In total, nine hotels were sold in Hamburg, including the “Holiday Inn” development (Shanghaiallee, HafenCity) sold by the project developer ECE to Union Investment, the “InterCity Hotel” at Dammtor (St. Petersburger Strasse 1, St. Pauli), bought by DEKA from the B&L Gruppe, and “Pier 3” (Am Sandtorkai, Hafen City) that the developer DC Developments sold to Patrizia Immobilien. Each of the three hotels changed hands for an amount in the tens of millions.
Year on year the premium returns on office and retail investments fell from 4.3% to 4.0% and yields on industrial/warehousing/logistics assets slipped from 6.5% to 6.0%. “For outstanding properties at top addresses, price to rent ratios of 26 or more are paid,” comments Steinbrinker
.Domestic investors comprise vast majority
In the 1st half of 2016 national actors dominated the market for investment in commercial properties in Hamburg. Only some 26% of the volume of transactions may be traced to foreign investors, mostly from the UK and France. In the 1st half of 2015, by contrast, far more international players invested in Hamburg, accounting for 53% of the volume of transactions. The share of international owners selling properties slipped year on year from 41% to 18%.
The biggest single group of investors was comprised of open-end/specialist funds with a share of some 28% (about €560m) of the transaction volume. Pension funds/pension insurers took the second-highest share with €398m, or 20 % of the total. The biggest vendors of property were project developers/builders who sold commercial real estate in Hamburg for a total of over €1.0 bn, and thus accounted for the biggest share (52%) of the transaction volume. Open-end/specialist funds shared second place with opportunity funds/equity funds, both types of investors accounted for 9% (€184m) of the total.Outlook 2016
“After a good first half-year, we are expecting business in the next sixth months to be equally brisk. As some portfolio sales are still pending, it could well be that the final figure for the year will equal the record set in 2015. In view of the impending Brexit, the stability of the German property market could attract the attention of more international investors. That would heighten demand for real estate in Hamburg too. In consequence, a further slump in yields is to be expected,” forecasts Steinbrinker
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