The pronounced upward trend on the Hamburg market for investments in commercial properties culminated in a total transaction volume of €3.65bn for 2014, whereby the 4th quarter alone saw commercial real estate change hands for a total of €1.25bn. Figures from Grossmann & Berger show that the transaction volume has grown by almost a third year on year, to close well above the ten-year average of €2.61bn. “This is the best result since 2007”, says Axel Steinbrinker
, managing director of Grossmann & Berger. “Half of the twelve biggest known transactions, i.e. with prices of over €80m, took place in the fourth quarter. 20 contracts involving sums over €50m each were registered in 2014, seven of them priced at over €100m.”City, HafenCity and St. Pauli
Investors concentrated on the City and HafenCity sub-markets, which accounted for 33% and 15% of the transaction volume respectively. Of the twelve biggest contracts in 2014, four properties were in City, and four in HafenCity; three of the HafenCity contracts were signed in the 4th quarter. The largest known sale in HafenCity, which was also the biggest contract in the entire year, related to the five properties in the north of the Überseequarter (Arabica, Ceylon, Java, Pacamara, Virginia), purchased for over €200m to a Hines specialist fund. This transaction was concluded in the 4th quarter. In the City sub-market, the most expensive transaction was the 2nd-quarter sale of Karstadt-Sport (Lange Mühren 14) which Pramerica bought from Signa Holding for some €110m. Investors also turned their attention to St. Pauli, which saw 11.5% of the transactions by volume. Three of the best-known buildings in St. Pauli - the Atlantic House, the Dancing Towers and Millerntor - changed hands in 2014. The last-named (Millerntorplatz 1) was sold by Credit Suisse in the 4th quarter.Ten of the twelve biggest transactions: offices for €1.37bn
Office properties were the most-traded assets on the Hamburg investment market, where they made up 74% of the total volume, which translated into €2.69bn. Indeed, ten of the twelve biggest sales, generating €1.37bn, were office buildings. Other asset classes to note were retail properties, accounting for 12% of the volume, and hotels, generating some 7%. No other known retail property sale was bigger than the Karstadt-Sport transaction mentioned earlier. In the hotel sector about a third of the volume of transactions, and biggest trade in this type of asset, was the 4th-quarter sale of the Atlantic Kempinski (An der Alster 72-29, Alster Ost), for which Asklepios paid Octavian Hotel Holding some €80m. In 2014, because there was significantly greater interest in commercial properties in Hamburg, the premium return on retail and logistics properties slipped year on year. For retail properties it fell by 0.1 percentage point to 4.6%; for logistics properties, by 0.3 index points to 6.9%. For office investments it stagnated at 4.5%.In increasingly greater favour with international investors
National investors were the biggest players on the market for commercial real estate, but more than 40% of buyers and sellers came from overseas. “International players were over-proportionally involved in the twelve biggest transactions”, says Steinbrinker.
Most of the non-domestic buyers and sellers came from the USA, Switzerland, Sweden, Canada, the UK, France, Austria and Spain.Open-end funds and project developers at the forefront
The open-end funds/specialist funds accounted for about 35% of purchases, followed by project developers with a share of 10% and owner-occupiers/non properties at about 8%. When it came to selling, the picture was reversed: here the project developers (about 35%) were ahead of the open-end/specialist funds (about 23%). The opportunity funds/equity funds were also involved in a sizeable number of sales, accounting for 9% of the market.Outlook 2015
“This record result brings back memories of recent boom years and how they were followed by the global financial crisis. But the situation is different now. Although interest rates are low and there is considerable pressure to find investments for liquid funds, banks are far more cautious about lending. Investors no longer buy properties “on the fly” but perform a careful due diligence analysis before they make a decision. That also protects the Hamburg investment market from over-heating”, says Steinbrinker.
“In view of the great demand and several anticipated transactions involving big-ticket properties, we expect to see brisk trading continuing on the market in 2015.”
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