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Germany: Investment H1 2020

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The German investment market posted its strongest H1 result of the past 10 years with a transaction volume (TAV) of €28.5bn. Following an all-time high in Q1 (€17.6bn), Q2 proved quite robust at €10.1bn despite a downward shift in momentum (-16% compared to the 5-year average). Major deals initiated prior to the lockdown and strategic portfolio disposals served to keep results stable. Examples include an office portfolio worth roughly €1bn and comprised of 10 assets in Hamburg, Frankfurt, Düsseldorf and Munich, which was transferred to French REIT Covivio in the wake of the Godewind acquisition. A number of investors also put their long-term portfolio streamlining strategies into action, with all of these deals registering at €500m and above. Property developer Consus, for example, was involved in 2 deals in which it disposed of 8 and 17 mixed-use district developments, respecttively. TLG was active as well, disposing of 120 food-anchored retail assets. Major landmark deals where nowhere to be seen in Q2 in contrast to the previous year in which they were driver behind record transaction volumes, especially in Germany’s top 7 cities. The SOHO Munich office asset (over €200m) remained the largest single deal. We have yet to see significant price reductions on the market in response to the pandemic. With the current trend towards “flight to quality,” we can expect prime yields to remain stable, but also risk-adjusted yield spreads in the second half of the year. Based on the pending increase in new-deal numbers and the fact that there are a number of transactions still in the pipeline from the boom phase, we expect 2020 to post an annual TAV of €50bn.

office leasing

Germany: Investment H1 2020

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Susanne Kiese

Head of Market Intelligence & Foresight | Düsseldorf

Duesseldorf

Susanne joined Colliers International Holding GmbH in February 2016 as Head of Research Germany. Before, she worked as a Senior Research Analyst for Hypothekenbank Frankfurt / Eurohypo, a specialist bank for real estate and public finance for almost 12 years. Susanne was also Research Analyst with Deutsche Gesellschaft für Offene Immobilienfonds (DEGI) GmbH, the property related investment company of Allianz Dresdner Property Group (now part of Aberdeen). 

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