Download Investment Market, 2nd Quarter of 2017

PRESS RELEASE
Hamburg: Investment Market, 2nd Quarter of 2017
€1.35bn / Transaction volume below last year’s high
Hamburg, 04 July 2017. In the 1st half of 2017 the Hamburg market for investment in commercial
properties was unable to match the record transaction volume seen in the first half of 2016. Figures from
Grossmann & Berger, a member of German Property Partners (GPP), showed that 55 commercial
properties valued at a total of €1.35bn were traded. Year on year this translates into a drop of 33%. “In
view of the shortage of properties, it is hard to approach last year’s very high trading figure. 1.35 billion
euros is nevertheless a good result, especially since 880 millions were realized in the second quarter.
That is almost twice the amount traded in the first quarter. Investors are consistently very interested in
Hamburg,” remarks Axel Steinbrinker, managing director of Grossmann & Berger.
One transaction over 100 million euros per quarter
The sale of the “Radisson Blu Hotel” (Marseiller Strasse 2, Alster West) for some €200m, the top
transaction of the 1st quarter, was followed in the 2nd quarter by another big-ticket transaction. When
Orion Capital Managers sold their “Symphonie” portfolio, Patrizia acquired properties including the
“HafenCity Gate” (Am Sandtorkai 74-77, HafenCity) for its commercial property fund ‘GewerbeImmobilien Deutschland II’ for a price in the three-digit millions. The greatest volume of trades, some
€400m, was generated by properties costing between €26 and €50m. In absolute figures, most properties
- 24 transactions - traded for under €10m each.
Office properties are still favourites
Accounting for some €722m and thus 54% of the transaction volume, offices remained investors’
favourite properties. Office block sales, apart from “HafenCity Gate”, included the “Economic Center”
(Heidenkampsweg 96+98, City South) sold by Publity to Blackrock Investment Management and “Elbhof”
(Steinhöft 9, City) sold by Quest Investment Partners to a family office. The second most popular assets
were hotels, whose share of €243m translated into 18% of the total volume. Only two transactions were
involved: the “Radisson Blu Hotel” and the “Generator Hostel” (Steintorplatz 3) sold in the 1st quarter by
Patron Capital and Invesco Real Estate to Queensgate.
Ongoing yield compression
Year on year the net prime yields* dropped further. On office properties yields fell from 3.7% to 3.3%, on
commercial buildings from 3.6% to likewise 3.3%, and in the case of industrial and logistics real estate
from 5.4% to 4.9%. “In the current market environment, core real estate in prime locations can sell for
multiples of up to 30,” says Steinbrinker.
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HafenCity and City South in second place
Due to the big-ticket sale of the “Radisson Blu Hotel” the Alster West district accounted for 23% (€304m)
of the total volume and thus more than any other sub-market. HafenCity and City South sub-markets
shared second place, each with trades valued at €240m or 18% of the total. Nine commercial properties
changed hands in City South. In addition to the “Economic Center” these included “City-Tor”
(Heidenkampsweg 99-101) and Heidenkampsweg 44-46, two office blocks in a Blackstone portfolio sold
to alstria office REIT. The building on Nagelsweg 37 was sold by Züblin Immobilien as part of a package
purchased by CLS Holdings. All properties had price-tags in the double-digit millions. The City sub-market
placed third, with a share of 9% or €116m. “However, the largest number of transactions - 13 - took place
in the Harburg/Hamburg South sub-market. Most of these trades were priced in the single-digit millions
and involved value add and opportunistic real estate or development sites. It is obvious that investors and
developers are focussing on non-central districts because the supply of properties in core locations is
barely able to meet demand,” says Steinbrinker.
National investors predominant
In the 1st half year international players were less active on the market for investments in commercial
properties than national buyers, who accounted for 65% of the transaction volume (€877m). Most foreign
investment came from Norway, Great Britain and the USA. As vendors, however, both national and
international players were equally represented (both €675m).
Thanks to the purchase of the “Radisson Blu Hotel” by the Wenaasgruppen from Norway, private
investors/family offices featured as the largest group of buyers, accounting for 21% of the transaction
volume (€284m). Open-end/special funds were in second place with 20% (€275m) and asset/property
portfolio managers came third with 13% (€171m). The selling side of the equation was dominated by
opportunity/equity funds, accounting for 25% (€338m) of the transaction volume, followed by
asset/property portfolio managers with 22% (€298m) and project developers/builders with 12% (€159m).
Outlook
“Even if the first half year result failed to match that of the prior year, the market is noticeably livelier than
it was. There are so many transactions backed up in the pipeline that we expect the year-end result to be
a good one. However, there is a long way to go before we reach the prior year’s figure of €4.5bn,”
forecasts Steinbrinker.
5.232 signs excluding main headlines
The full market survey will soon be available and can be downloaded from our website.
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*The prime attainable yield is the initial return that may be made on a property that has been let on
normal market terms (tenants with good credit ratings), has top quality structure and fit-out, and stands in
one of the very best locations. It is stated as net initial yield in per cent, i.e. the ratio between the annual
rental income less non-apportionable ancillary costs and the gross purchase price (net purchase price
plus land acquisition tax, entry in the land register, notary fees and agency commission).
About Grossmann & Berger
Grossmann & Berger GmbH is one of the leading real estate service companies for the sale and lease of commercial and residential
real estate in Northern Germany. With ten offices in Hamburg and further ones in Berlin, Ahrensburg, Lüneburg and on the island of
Sylt the company is present throughout the Northern German market. Thanks to more than 80 years of experience, the company
disposes of an extensive real estate competence. Grossmann & Berger is a subsidiary of the HASPA-Group and founder member of
the nationwide commercial real estate network German Property Partners (GPP). [www.grossmann-berger.de]
Press contact
Grossmann & Berger GmbH
Ms Tatjana Merger
Phone +49 (0)40 / 350 80 2 - 231
Fax
+49 (0)40 / 350 80 2 - 200
Mail
[email protected]
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