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Germany Property Investment News
German transactions up 34 percent in first half of 2007
Germany has seen the transaction volume in its commercial property market during the first six months of 2007 increase by 34% compared to the same period last year, according to figures released by Jones Lang LaSalle. The total volume during the first half of 2007 amounts to €26.4 billion.
Of the 34% increase, €8.5 billion was invested into five of Germany’s main cities: Berlin, Düsseldorf, Frankfurt, Hamburg and Munich. The investment the cities received in the first six months of 2007 is almost 70% of the total received during the whole of 2006, and it is the largest amount of investment received by the five in the first half of a year since 1997. After such a promising start to the year, Jones Lang LaSalle predicts a total transaction volume for the country during 2007 of over €50 billion.
Of the total volume, office properties account for 38%, mixed-use properties for 27%, retail properties for 20% and hotels for 6%. The remainder was in logistics and industrial real estate, and other commercial properties. The bulk of investment came from abroad, with foreign investors accounting for 74% of the total volume. The majority of the capital originated from three main types of investors: 27% were fund managers, 15% were property companies, and 11% were private equity or hedge funds.
Germany’s cities have been widely tipped for their strong investment potential over the next couple of years, and rising investment levels show that investors are listening to predictions of a market boom. Speculative construction projects are reported to have risen to levels not seen since 2000, with 2.8 million m² of property – including residential as well as office and retail – currently being built in the seven most popular cities of Germany: Berlin, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and Cologne.
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