Investment Market monthly - November 2018

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Investment Market monthly Germany - November 2018

Commercial investment market

  • Racing towards record levels! Commercial property changed hands for more than €6.1bn in November (Table 1, Graph 1), the second strongest month of the year for investment after September. In view of the deal pipeline for December, we expect the annual transaction volume to exceed €60bn, which would set a new record.
  • While Frankfurt and Düsseldorf are enjoying exceptional growth, transaction volumes in the other top seven cities and indeed the rest of Germany are broadly in line with last year’s levels and their five-year averages (Graph 5).
  • In terms of sectors, development sites stand out (Table 1) with investment of almost €2bn representing the highest level in the current cycle. This can also be regarded as an indication of rising development activity going forward.

 

Residential investment market

  • In the residential investment market, the C-cities have called a timeout, having witnessed the largest growth in investment across all city categories during the year to date. This is the first time we have not registered a single transaction since April 2011 (Table 4). Elsewhere, there were relatively few transactions in November, continuing the long-term trend towards a paucity of disposals (Graph 10). Nevertheless, 2018 will go down as another strong year in the investment market (Graph 9).
  • Foreign investors, particularly from Europe, have been more active once again on both the purchaser side (Graph 13) and the vendor side (Graph 14) in recent times. Hence, German investors remain the only group of noteworthy net purchasers. It is entirely possible that increasingly stringent regulation of the rental apartment market is preventing more significant engagement on the part of foreign investors.