Market Survey - 2021 / Q 1 Berlin - Grossmann & Berger
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Market Survey Commercial | Investment 2021 / Q 1 Berlin
Commercial | Investment
Berlin 2021 / Q 1
Key Facts | Investment
€ 850 m | −67% year-on-year change
29 % | −64%-pp year-on-year change
Office: 53 % | −75%-pp year-on-year change
Office: 2.7 % | ± 0%-pp year-on-year change
Commercial: 2.8 % | ± 0%-pp year-on-year change
Logistics: 3.7 % | ± 0%-pp year-on-year change
Hausvogteiplatz 10 Transaction volume Share of foreign investors Strongest asset class (Net) Prime yield
“ Generally speaking, it is not unusual for Berlin if the invest- In tandem with the 67 % decline in the volume traded in Berlin,
ment market is rather slow at the start of the year. The all- the number of property sales in in the city fell by 44 %. Instead
time high volumes of transactions in the first quarters of of 41 properties in the 1st quarter of 2020, only 23 changed
2019 and 2020 are actually the exceptions. hands in the same quarter this year. 26% (€ 221m) of the volume
We do not expect talks on larger transactions to start until traded was comprised of sales at prices between € 26 m and
the second and third quarters of 2021. Some investors, in € 50 m, around 29 % (€ 244 m) was made up of properties that
particular buyers from abroad, remain reticent in view of sold for between € 51 m and € 100 m. Only 31 % of the market
the ongoing pandemic. This, together with an acute short- (€ 261m) involved real estate with price tags in excess of € 100m.
age of real estate is tending to hold the market back at
present. ” To date the biggest single property trade in Berlin noted by Gross-
Holger Michaelis | Managing Director man & Berger was the Alte Post (Karl-Marx-Strasse 97 – 99 |
Periphery South), which Ivanhoé Cambridge purchased from
Commodus. The two next-largest trades were both properties
Transaction volume that Real I.S Themenfonds Deutschland II took over from Patri-
Shortage of big-ticket sales and portfolio trans- zia. One of these buildings houses the head office of Klarna, a
actions financial services provider, (Chausseestrase 117 | Mitte sub-mar-
In the 1st quarter of 2021 the investment trade in Berlin plum- ket), the other is seat of the European head office of Nike
meted by 67 %. However, the volume traded was not unprece- (Warschauer Strasse 70 | Friedrichshain sub-market).
dented and the total of € 850 m was on a par with the figure
recorded in 2018 and about € 200m below the ten-year average. Transaction volume
The enormous percentage decline was a result of the unusually 2017 – 2021 / Q 1 | in € bn
high volume of trading seen in the same quarter a year before,
when some 62% of the total stemmed from Aroundtown’s pur-
chase of TLG shares. Nevertheless it must be noted that in the 10-year average
first three months only a few owners took initial steps towards (2011 – 2020)
selling their real estate and very few new-builds came onto the approx. € 5.6bn
market. Grossmann & Berger’s view is, however, that by the end
of 2021 real estate trades will total at least € 6.5 bn because
many investors are urgently in search of assets for their cash
and over the course of the year properties are likely to come onto
the market in sufficient numbers. Q1
7.3 6.8 11.1 7.4 0.85
2017 2018 2019 2020 2021/Q1
source: Grossmann & Berger GmbH
www.grossmann-berger.de | page 2
Commercial | Investment
Berlin 2021 / Q 1
Transaction volume Investment properties
2021 / Q 1 | by Asset class Investors continue to look outside the centre
Other Five sub-markets returned two-figure shares of the total trading
Sites 5% volume; these were Friedrichshain (20 %), Periphery South (18%),
6%
Periphery East (17 %), Adlershof (12 %) and Mitte (12 %). There-
Hotel 6% fore no single sub-market could claim an unusually large share of
Industrial/ the volume traded, a result partly due to the even distribution of
Logistics 8%
big-ticket and less pricey real estate across these markets. This il-
53% lustrates that investment properties with good development po-
tential or developed properties rented on long-term leases contin-
ue to be sought after, wherever they are in the city.
Mixed-use 22%
As far as the various assets are concerned, only two classes posted
Office two-figure shares of the total sold. As in the past, the undisputed
front-runner was office real estate, accounting for 53 % (€ 449m)
source: Grossmann & Berger GmbH due to the big trades already noted, (“Klarna” and “Nike”). The sale
of “Alte Post” (Commodus to Ivanhoé Cambridge) propelled the
mixed use category to second place and a share of 22% of the to-
Prime yields tal (€ 183m). Other asset classes accounted for between one and
2017 – 2021 / Q 1 | (net) initial yield* | in % eight per cent.
3.00 3.00 Yields
office
commercial
Yields remain stable but very low
Compared with the same quarter a year ago prime yields on com-
2.90 2.90 mercial properties bought and sold in Berlin in the 1st quarter
2.80 2.80 2.80
of 2021 have remained stable but at a very low level. The prime
net yield on offices persisted at a mere 2.70%. On logistics prop-
2.70 2.70 2.70
erties, yields softened by 5 basis points to 3.75%, while stagnating
at 2.80% on commercial buildings.
2017 2018 2019 2020 2021/Q1
Investors and vendors
source: Grossmann & Berger GmbH
Few international players in the field
Because travel to Germany is currently difficult for overseas inves-
tors, far fewer foreign buyers were active on the Berlin market in
Transaction volume
the 1st quarter of 2021 than in the same period of 2020. Interna-
2021 / Q 1 | by Investor groups
tional investors accounted for a mere 29% of the transaction vol-
ume (€ 242m), 88% below their share in the same quarter of the
Other
Project developers prior year. Property sales by foreign investors fell by 92% to close
Private equity 13%
funds/opportuni- the quarter at € 155m or 18% of the total transaction volume.
26%
ty funds 6% During the 1st quarter project developers and specialist funds
emerged as the major groups of buyers, spending € 218 m
(a 26% share) and € 214m (25%) respectively; major contributory
Private 12%
investors factors were the purchase of various parcels of building land and
the two properties bought by Real I.S. for their specialist fund. The
next biggest groups were fund managers, who accounted for 18%
18% 25% of the total traded (€ 156 m), and private investors with a share
Fund managers
of 12% (€ 99m). The latter was in fact the largest group of sellers,
Specialist funds
accounting for 34% of the market (€ 287m). Specialist funds were
source: Grossmann & Berger GmbH behind 22% of sales (€ 188m) and owner-occupiers and fund man-
agers accounted for 13% each (€ 110m).
Transaction volume Outlook
2021 / Q 1 | by Vendor groups
Market prospects remain uncertain
The volume of transactions recorded in the 1st quarter documents
Other
12% the ongoing uncertainty on the market for investment in commer-
Project Private investors
cial properties in Berlin—and elsewhere. However, more real estate
developers
6% is starting to come onto the market. As more and more people are
34%
vaccinated and the pandemic recedes, this trend should become
Fund more pronounced. Investors will continue to be very interested in
13%
managers rock-solid assets such as properties let long-term if these are in
good or very good locations, because they have cash that must be
put to work and interest rates remain low. Although the year has
Corporates/ 13% started slowly, we expect it to close with a figure of some € 6.5bn
owner-occupiers
22% Specialist funds of investment transactions and stable yields.
source: Grossmann & Berger GmbH
www.grossmann-berger.de | page 3Commercial | Investment
Berlin 2021 / Q 1
Skilled consultancy
Services and Contact
What can we do for you? Ulrich Denk
An analysis of the property markets is an important part of the Diplom-Geographer | Investment consultant and Research
wide-ranging consultancy services offered by Grossmann & Phone: + 49 (0)30 / 202 953 21
Berger. We would be pleased to be of assistance in your deci- Mail: u.denk@grossmann-berger.de
sion-making process and can draft an offer that is tailored to
your specific requirements.
Glossary
Definitions, investment market
Transaction volume: The transaction volume is the sum of the purchase prices of all Photo credits:
commercial property sold in Hamburg during the period under review. The date of Title: Borsigturm, 2020 | © Grossmann & Berger GmbH Berlin
signing determines when a transaction is included in the statistics. Buy to let invest- page 2: patio Hausvogteiplatz 10 | © Grossmann & Berger GmbH Berlin.
ments in residential properties are not included in the transaction volume. diagrams: Grossmann & Berger Research
Asset class: A property is allocated to an asset class according to the predominant
way in which space is used (at least 75%) when the contract is signed. We draw your attention to the fact that all statements made here are non-binding.
Individual properties and portfolio transactions: An individual property transac- Most of the information is based on third-party reports. The sole intention of this
tion means the purchase of a building used for commercial purposes or of a piece market survey is to provide general infomation for our clients.
of land for development. Portfolio transactions involve the purchase of at least two
separate properties in different locations. Grossmann & Berger GmbH • Potsdamer Platz 9 • D -10117 Berlin
Prime yield: The prime yield is the initial return attainable on a property that has Phone: +49 (0) 30/202 953 -20 • Fax: +49 (0) 30/202 953 -25
been let on normal market terms (tenants with good credit ratings), has top quality berlin@ grossmann-berger.de • www.grossmann-berger.de
structure and fit-out and stands in one of the very best locations. It is stated as the Managing directors: Sandra Ludwig, Andreas Rehberg, Holger Michaelis, Lars Seidel
net initial yield in per cent, i.e. the ratio between the annual rental income less non- Chairman of the supervisory board: Frank Brockmann
apportionable ancillary costs and the gross purchase price (net purchase price plus Registered office Hamburg • Registered at Hamburg no. B 25866
land acquisition tax, notary’s fees and agency commission.)
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