savills-market-in-minutes-residential investment market Q2 2018

Publication

Market in Minutes - Germany residential investment market Q4 2018

Development acquisitions are driving prices and transaction volume

  • Properties in the German residential investment market changed hands for a total of almost €15.1bn last year. Despite a modest decrease of 3% in investment volume compared with the previous year, the market registered its third highest transaction volume of the last ten years (Table 1, Graph 1). In view of the strained rental apartment markets and a continued shortage in new-build activity, the situation in the residential property market is still positive from an
    investor’s perspective.
  • Despite the large Buwog acquisition, market activity was somewhat more fragmented last year (Table 2). Transactions with a double-digit or triple-digit quantity of apartments accounted for 48% of all apartments transacted (Graph 3). On the one hand, the smaller lot sizes are a reflection of the large volume of development acquisitions, which accounted for around 26% of the transaction volume. On the other hand, the lack of supply of large portfolios means
    that investors can only increase their holdings by acquiring smaller residential portfolios.
  • Of the purchasers in 2018 known by name, almost 38% were investing in the German residential market for the first time in the last ten years. This further growth in the investor base is likely to ensure further high levels of investment activity in 2019, with the transaction volume likely to exceed €15bn once again.