Investment market Berlin 2Q2021

Outlier transaction boosts total traded in 1st half year


Press release | Berlin
13.07.2021


When Vivion sold the “Fürst” at Kurfürstendamm 206-209 to Aggregate Holdings in the 2nd quarter of 2021, the sale boosted the volume of commercial property trades to the second-highest total ever recorded in Berlin for the 1st half of a year. In the first six months of 2021 the volume of transactions rose by 24 % to some €4.3bn. This is remarkable in view of the slow start to the year and is an indication that the market is now recovering from the slump caused by the coronavirus pandemic. “Apart from the outlier trade of the “Fürst”, several properties sold in the first half of 2021 were priced at €100m or more. In particular, properties let on long-term leases to public institutions continue to command top prices,” says Holger Michaelis, managing director of Grossmann & Berger, a member of German Property Partners (GPP). Considerable demand for core properties is further squeezing yields on office real estate. Taking the outlier transaction into account, Grossmann & Berger expects the year 2021 to close with a total transaction volume of €7.5bn
 

Investment market Berlin details:

  • Aggregate Holdings paid Vivion more than €1bn for the “Fürst”, thus ensuring that in the German capital the best-selling class of asset (51 %) was the mixed-use property, dislodging office real estate (35 %) from the top slot in the 1st half of 2021.

  • Another effect of this outlier trade was that the price category of €100m or over pulled well ahead of all others, accounting for 74 % of the total traded,

  • Due to the “Fürst” transaction, the relative activity of different buyer groups showed an unusual pattern: in the first half of 2021 fund managers took 57 % of the market, a long way ahead of developers (11 %).

  • Non-listed property corporations formed the biggest group of sellers (33 %), followed by developers (26 %).

  • By the end of the 2nd quarter of 2021 the prime yield on office properties had softened by a further 0.05 percentage points to 2.65 %. Prime yields on industrial and logistics real estate slipped appreciably, dropping 0.3 percentage points to 3.5 %. Year on year, only commercial buildings posted an unchanged prime yield of 2.8 %.

  • At 60 %, the proportion of foreign buyers was comparatively low for Berlin in the 1st half of 2021 (Q2/2020: 74 %).


Investment market | Berlin | 2021 Q 1-2
Transaction volume [€ millions] 4300
against prior yr [%] +24
Share of trading in CBD [%] 50
Proportion of international investors [%] 60
Prime net yield, office [%] 2.65
against prior yr [percentage points] -0.05
Prime net yield, commercial buildings [%] 2.80
against prior yr [percentage points] ±0.00
Prime net yield, logistics properties [%] 3.5
against prior yr [percentage points] -0.3
Strongest asset class Mixed use
Strongest asset class [%] 51


















Selected top transactions | investments in Berlin | 1st + 2nd quarters of 2021
Project/property
Street no.
Sub-market Asset class Buyer/investor Vendor: Purchase price*
[approx. €m]
“Fürst”
Kurfürstendamm 206-209
Ku’damm plus side-roads Mixed use Aggregate Holdings Vivion > 1,000
“Quartier 206”,
Friedrichstrasse 71
Mitte 1a Mixed use RFR Holding Bank consortium headed by Credit Suisse 220
Landsberger Allee 52 Friedrichshain Offices Values Centrum Grundstücksgesellschaft 200
“Alte Post”,
Karl-Marx-Strasse 97-99
Periphery south Industry/ commerce Ivanhoé Cambridge Commodus Real Estate confidential
Nike,
Warschauer Strasse 70a
Friedrichshain Offices Real I.S. for specialist fund Patrizia Deutschland 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.

Press contact

Visitenkarte
Berit Friedrich


Bleichenbrücke 9
20354 Hamburg

b.friedrich@grossmann-berger.de

040-350 802 620
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