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Investment market for commercial property in Germany heading towards record result of 2007 says NAI apollo group


Investment market for commercial property in Germany heading towards record result of 2007 says NAI apollo group

- Investment volume increases 40.2% to €24.0 billion compared to the previous year

- Retail property registers strongest growth - almost doubling to €9.76 billion

- Property portfolio transactions rise almost 50% to €8.98 billion
- Prime yields fall again – logistics property shows highest average drop of 50 basis points
- Outlook: NAI apollo group expects the transaction volume in 2015 to be just below the 2007 record figure

Frankfurt, 27th July 2015 – According to an analysis conducted by real estate consultancy NAI apollo group, the boom on the German investment market for commercial property continued throughout the second quarter of 2015. In the first half of the year the transaction volume amounted to €24.0 billion, rising a further 40.2% compared to the already strong first six months of last year (H1 2014: €17.1 billion). In the second quarter of the year, property investments increased by 45.2% to €14.2 billion.

“The retail property asset class represents the absolute winner in terms of current demand, almost doubling its transaction revenue,” explained Lenny Lemler, Co-Head of Investment at the NAI apollo group. In the first six months, a total of €9.76 billion was invested in retail property (H1 2014: €5.0 billion). This asset class was therefore able to increase its market share both sequentially (Q1 2015: 34.4%) and year-on-year (H1 2014: 29.3%) to 40.6%. However, office property remained the most sought-after asset class in the first two quarters with a purchase volume of €10.38 billion (43.2% share). Compared to the previous year, the value increased by approx. €3.28 billion or 46.2%.

Transaction activity remains buoyant in the logistics property segment. The investment volume this year to date has reached €1.91 billion (8.0% share) and almost corresponds to the previous year’s value of €1.94 billion. Property classified under “other uses” accounted for approx. €1.98 billion, of which hotels made up the lion’s share of €1.32 billion.

The positive performance of the investment market was supported both by the increase in individual deals by more than a third to €15.05 billion as well as the almost 50% rise in portfolio transactions to €8.98 billion compared to the mid-year point of 2014. The percentage share of portfolio sales therefore increased to 37.4% (H1 2014: 35.7%).

“At 55.7% or €13.40 billion, international investors were not only responsible for the largest percentage share of the investment volume in the first half of 2015 but also had a strong impact on German investment market growth, with an increase of 63.8% compared to the first six months of 2014,” said Dr. Konrad Kanzler, Head of Market Research at the NAI apollo group.

The strongest single country is Germany, which generated a purchase volume of €10.63 billion (H1 2014: €9.0 billion). Following the acquisition of 46 Kaufhof department stores by the joint venture of Hudson's Bay and Simon Property Group, Canadian investors moved into second place with €3.19 billion, followed by UK investors with €2.99 billion.

German investors are also ranked in first place on the seller side, with a volume of €10.50 billion. Foreign investors sold German property worth €13.53 billion in the first half of 2015.

Due to the sale of the Kaufhof portfolio valued at €2.4 billion to Hudson's Bay and Simon Property Group, “listed property companies/REITs” represented the most active buyers with an investment volume of €5.70 billion (23.7% market share). “Asset/fund managers” generated an investment volume of €5.25 billion (21.9% share) and were therefore marginally ahead of “open-ended funds/special funds” with a volume of €5.05 billion (21.0% share). On the seller side, the top two positions were occupied by “open-ended funds/special funds” with €4.58 billion and project developers with a volume of €4.03 billion.

Due to the growth in portfolio deals, the “>€500 million” size category increased its volume almost three-fold to €4.57 billion compared to the first half of 2014 (H1 2014: €1.54 billion). The “€100 million-€500 million” segment accounted for the highest volume of €7.92 billion (33% share).

“The continuing high level of transaction activity on the investment market caused yields to decline further in the second quarter of 2015. The prime yield for logistics property in the Top-5 markets fell by an average of 50 basis points compared to the previous quarter,” said Kanzler. This led to higher prices especially in Berlin (-55 basis points to 6.05%), followed by Dusseldorf (-50 basis points to 6.00%). The other three Top-5 markets have prime yields of already below 6% (Frankfurt: 5.85%; Hamburg: 5.95%; Munich: 5.80%).

The prime yield for office property fell by an average of 15 points in the Top-5 cities. The strongest declines in a quarterly comparison took place in Hamburg, with a 0.25 percentage point drop to 4.15%, and Munich, with a decrease of 0.20 percentage points to 4.00%. In the other cities, prime office yields were between 10 and 15 basis points below the levels in the first quarter of 2015 (Frankfurt: 4.35%; Dusseldorf: 4.55%; Berlin: 4.40%).

Prime yields for retail property in the Top-5 cities also fell by approx. 15 basis points on average in Q2. The decreases ranged between 0.10 percentage points and 0.20 percentage points (Berlin: 4.00%; Dusseldorf: 3.95%; Frankfurt: 3.95%; Hamburg: 3.90%; Munich: 3.65%).

The continuing prosperous economic development in Germany and the still favourable financing conditions will also ensure a high level of investment activity on the German commercial property market in the coming months. The progression towards euro-dollar parity also makes Germany particularly attractive to investors outside the Eurozone. A question mark remains over the future development of the crisis in Greece and its effect on Germany.

“Demand for German commercial property is expected to remain high in the second half of 2015. More large transactions, both in the form of trophy assets as well as through portfolio deals, will provide a further boost to the investment market,” said Lemler. In this context, NAI apollo group is forecasting a transaction volume in the range of €45 billion to €50 billion (2014: €39.4 billion) on the investment market in 2015. Thus the result this year could fall only slightly short of the existing record of €54.4 billion in 2007.

About NAI apollo group
NAI apollo group ( is the leading network of independent real estate consultancy companies in Germany. For more than 25 years now, its partners have been advising national and international companies with lasting success. Its range of services encompasses the divisions Investment, Letting, Evaluation, Research, Construction Management, Asset and Property Management and Corporate Finance in the segments Office, Industrial, Residential and Retail. With offices in Frankfurt am Main, Hamburg, Berlin, Stuttgart, Munich, Ulm / Neu-Ulm, Dusseldorf, Essen and Mulheim an der Ruhr, NAI apollo group employs around 150 people throughout Germany, including MBA graduates, engineers, legal attorneys, economists, bankers, real estate economists and chartered surveyors. Partners to NAI apollo group are apollo real estate service GmbH & Co. KG, corealis Commercial Real Estate GmbH, Cubion Immobilien AG as well as Objekta Immobilien Kontor GmbH and Völckers & Cie Immobilien GmbH. As an exclusive German partner of NAI Global, the owner-managed real estate services group NAI apollo group, founded in 1988, has global access to more than 6,700 real estate specialists. The world's largest network of owner-managed companies for professional and top quality property consulting has 375 partner offices. NAI offices are responsible for more than $ 20 billion worth of transactions every year, and in the field of asset and property management they manage more than 38 million square meters of property (as of: July 2015).

Media contact:
NAI apollo group press office: Silke Hoffmann
Fritz-Vomfelde-Straße 34
D-40547 Düsseldorf
Tel: +49/211/53883-440
Fax: +49/211/53883-112

Corporate Contact NAI apollo group:
Dr. Marcel Crommen MRICS
Managing Director
Grüneburgweg 2
60322 Frankfurt am Main
Tel: +49 (0)69 - 97 05 05-0
Fax: +49 (0)69 - 97 05 05-5

08/03/2015 - 13:15


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