Investors clearly focus on Berlin residential portfolios

26 July 2011

  • 92 residential portfolio transactions totalling approx. 34,600 units
  • Total transaction volume approx. €1.68 bn
  • Almost a third of the units were transacted in Berlin

The residential portfolios markets continued to improve throughout the second quarter of 2011 with almost 17,500 residential units changing hands during the period from April to June, according to research by international real estate advisor Savills. This marks a marginal increase compared to Q1 (17,100 units). Throughout the first half of 2011 Savills research shows that 92 residential portfolios comprising a total of approximately 34,600 units were transacted, which represents an increase of 53% in terms of the number of deals and a 2% increase in terms of the number of transacted units against H1 2010. These statistics do not include the purchase of the majority shareholding in Colonia Real Estate AG by TAG.

Karsten Nemecek, managing director corporate finance – valuation at Savills Germany says: "The figures reflect the growing interest of both national and international investors in residential property in Germany, This is why we also expect to see further large-scale transactions in the second half of the year."

Despite the increased number of transacted packages and units the firm reveals that the total transaction volume in Germany went down from €1.99 bn in H1 2010 to €1.68 bn in H1 2011 (-16%).

Matthias Pink head of research at Savills Germany comments: "Contrary to last year we saw an increasing number of transactions in the opportunistic and value-add sector. In Q2, however, only few core properties were sold due to the lack of product so that consequently average prices declined."

The firms’ research shows that on average approximately €830 per square metre was paid in H1 2011, compared with €860 per square metre in H1 2010, however price levels varied immensely with prices per square metre ranging from below €300 to over €3,000.  The gross multipliers on annual net rental income ranged between 11 and 15 in most cases.

Savills notes that the dynamics of the Berlin market were particularly striking with almost every third residential unit sold located in the city.  Throughout the first half of the year more than 10,000 units changed owners under portfolio transactions in the federal capital.

Nemecek continues: "The Berlin market still offers good value for money in comparison to Germany’s other major cities so many investors are taking advantage of its attractive investment opportunities.  Berlin offers suitable products for both risk-averse and opportunistic investors."

View residential portfolio transactions H1 2011 - Market Overview

 
 

Key Contacts

Matthias Pink

Matthias Pink

Associate Director Research Corporate Finance - Valuation

Savills Berlin

+49 30 726 165 134

 

Karsten Nemecek

Karsten Nemecek

Managing Director Corporate Finance - Valuation

Savills Berlin

+49 30 726 165 138