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CB Richard Ellis
Property Investment Germany
Transactions involving the purchase of 50 or more residential units increased by 44% year on year in Germany last year, with 6.12 billion Euros transacted over the course of the year according to new data from CB Richard Ellis. Further, the number of units transacted also increased, with 92,000 units transacted across 194 transactions representing a 27% increase over 2010. This indicates an increase in appetite for portfolios of over 1000 units according to CBRE.
According to the data Berlin saw particularly strong residential demand. Apparently some 32,300 residential units were traded to a value of 2.3 billion Euros. This figure means that investment volumes in the federal capital were 37% of recorded investment volumes for Germany as a whole and also that the number of units sold represents 37% of residential units sold across Germany in 2011. This massive level of activity led to a surge in high end development projects in the city, and also triggered a rise in the per sqm price, which went up to 1,033 Euros.
As Europe still crumbles slowly from the pressures of the sovereign debt crisis faced by several of its member states but burdening all, places like Germany that are outside of the danger zone are being seen as safe havens for investment and/or the storage of wealth. Berlin has long been one of the stalwart markets of European property, while many booms have been predicted and never materialised the market has remained constant and steady, enjoying few price rises, but no falls either.
Konstantin Lüttger, Head of Residential Investment, CBRE Germany, said: "German residential is regarded as a secure investment at a time when the European sovereign debt market is in crisis and international capital markets are volatile. This has resulted in a strong year for the country’s housing industry. Developers have benefitted from a strong demand for individual sales as well as capital investments, not least because rents are increasing in both large and prosperous medium-sized cities and university towns where there is a shortage of supply. The confidence of both national and international investors in the German residential market is clearly reflected in last year’s impressive trading levels."
The strong performance in the Berlin and German residential sector is backed up by the recent Emerging Trends in European Real Estate report from Pricewaterhousecoopers. The report saw 3 German cities including Berlin ranked in the top 10.
Munich was ranked in 2nd with a second in existing property performance, 3rd for acquisition opportunities, and 5th for development prospects. Berlin made 4th with 4th for existing property performance and 7th and 10th respectively for acquisition and development opportunities. And finally we have Hamburg at 7th with a ranking of 7th for existing investments, 5th for acquisition prospects and 9th for development opportunities. In both Berlin and Hamburg respondents recommended the apartment sectors as the best for investment in 2012.
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