Facts and Figures Investment Market for Residential Portfolios Germany 2016

Transcription

1 Facts and Figures Investment Market for Residential Portfolios Germany 2016

2 As a general rule, the most successful man in life is the man who has the best information. Quote from Benjamin Disraeli If you require any further information, please do not hesitate to contact us. We can put you in touch with our specialists who are always happy to provide you with expert support. We look forward to hearing from you! Dr. Konrad Kanzler Head of Research +49 (0) konrad.kanzler@nai-apollo.de Stefan Mergen Managing Partner Valuation +49 (0) stefan.mergen@nai-apollo.de Lenny Lemler Co-Head of Investment +49 (0) lenny.lemler@nai-apollo.de Franziska Henke Consultant Research +49 (0) franziska.henke@nai-apollo.de

3 Residential Portfolios Market Overview 2016 Transaction Volume Sales of Residential Units Regional Focus Type of Investors Origin of Investors Transactions number of residential units 600, , , , , , , , billion, 41.9 % below the volume of the previous year 374 Transactions with approx. 143,400 units Berlin is the most popular investment target (15.7 % of the transactions), investmentactivity in secondary and tertiary locations is rising dominant investors are Open-ended Funds / Special Funds ( 3.5 billion) German investors are strongest market players with purchases of 9.7 billion ,000 54,500 93, , , , ,000 Volume of Transactions according to Category Size m number of residential units Transaction Volume according to Type of Investor revenue sales price (in bn. Euro) , m < 500 m 50 m < 100 m 25 m < 50 m 10 m < 25 m < 10 m Open-ended Funds / Special Funds Listed Property Companies / REIT's Asset Managers / Fund Managers Sovereign Wealth Funds Property Companies Public Administration / Local Authorities Private Investors / Family Offices Insurances / Pension Funds Closed-End Funds Private-Equity Funds / Opportunity Funds Project Developers Trans-regional Associations / Cooperatives Banks Corporates Others 19.2 % 11.2 % 5.5 % 21.1 % 20.4 % 22.6 % Seller Volume in % Volume in % revenue sales price (in bn. Euro) The investment market for residential portfolios* in Germany closed 2016 with a strong fourth quarter when sales reached about 6.0 billion. The final quarter has thus contributed almost as much to the total investment volume as the first three quarters combined, which generated total sales of 7.9 billion. In the year as a whole, the total value of transactions amounted to 13.9 billion. Although this was 41.9 % below the previous year s level ( 23.9 billion), it still exceeded the 2014 figure ( 13.1 billion). The number of transacted residential units declined by around 59.5 % to 143,340 units in 2016 compared to 354,000 units in At the same time, the number of transactions increased 5.6 % year-on-year to about 374 (2015: 354). This was due to a decline in the number of large deals, alongside a simultaneous rise in smaller portfolio deals. In 2016, fewer transactions (20) above 100 million were completed compared to 2015 (30). The 500 million-plus size category contributed 2.8 billion towards the investment volume and accounted for a lower share of 20.4 % compared to the previous year (2015: 13.2 billion and 55.2 %). Sub- 100 million transactions, meanwhile, were responsible for a much larger share (57.0 %). The transaction volume in this segment increased by 31.4 % to 7.9 billion (2015: 6.0 billion). *Sale of residential property portfolios or residential complexes with at least 30 units each as well as the sale of corporate shares which give the purchaser a controlling interest; without consideration of IPOs

4 Residential Portfolios Transaction Number according to Type of Investor 2016 Open-ended Funds / Special Funds Property Companies Asset Managers / Fund Managers Private Investors / Family Offices Listed Property Companies / REIT's Public Administration / Local Authorities Project Developers Insurances / Pension Funds Trans-regional Associations / Cooperatives Closed-End Funds Private-Equity Funds / Opportunity Funds Banks Sovereign Wealth Funds Corporates Others Seller number in % Number in % Transaction Volume according to Investors Origin German Investors Foreign Investors 100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % Transaction Number according to Investors Origin German Investors Foreign Investors 100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % Open-ended Funds / Special Funds retained their status as the largest group of buyers at the end of the year. Strong cash flow and high liquidity encouraged these investors to increase their purchase volume by 75.1 % from 2.0 billion in the previous year to about 3.5 billion, equating to a market share of 25.2 %. Listed Property Companies / REITs were ranked in second place. This group accounted for a combined 3.1 billion (a 22.4 % market share), which was 79.8 % below the corresponding level of the previous year (2015: 15.4 billion / 64.4 %) due to the absence of large deals. From a sales perspective, project developers had already emerged as strong players during the course of the year. Because property development deals had a much greater impact on the market, sales amounted to 3.7 billion by the end of the year and accounted for a 26.9 % share of total transactions. This compares to a 2.1 billion sales volume or an 8.6 % share in the previous year. Listed Property Companies / REITs were ranked in first place in 2015 but dropped back to second position behind Project Developers, with sales totalling about 3.1 billion (22.6 %). Distribution of Transactions 2016 Saarland 0.0 % Rhineland - Palatinate 3.6 % Schleswig-Holstein 4.1 % Saxony-Anhalt 5.6 % Saxony 9.0 % North-Rhine Westphalia 18.2 % Lower Saxony 5.8 % distribution according to number of transactions (if no classification possible then no allegation) Thuringia 2.4 % Mecklenburg-Western Pomerania 2.4 % Hesse 8.2 % Baden-Wurttemberg 5.1 % Bavaria 7.7 % Bremen 2.9 % Hamburg 5.8 % Berlin 15.7 % Brandenburg 3.4 % German investors remained the most active buyers this year with a 70.0 % share and 9.7 billion of turnover. However, they lost market share compared to the previous year. In contrast, foreign investors significantly increased their purchase volume from 3.0 billion to 4.2 billion during the same period, and also grew their share of turnover from 12.6 % to 30.0 %.

5 Residential Portfolios Selected Residential Transactions 2016 > 200 m Conwert-takeover Vonovia valued with approx. 1,700,000,000 20,400 BGP-Portfolio Morgan Stanley for Chinese Sovereign Wealth Fund China Investment Corporation (CIC) 1,177,000,000 17,000 Residential Portfolio with focus on Northrhine-Westfalia, Lower Saxony, Bavaria Patrizia n/a 3,488 Berolina-Portfolio Deutsche Investment for "Deutsche Investment Wohnen III" Funds 250,000,000 1,500 Majority takeover of GWB Elstertal Geraer Wohnungsbaugesellschaft Benson Elliot (74.9 % share) n/a 6,700 Residential and Commercial Portfolios in Berlin ADO (95.0 % share) 218,000,000 1,905 Student Housing-Portfolio in Berlin, Darmstadt, Frankfurt and Hanover The Fizz Student Housing Fund S.C.S. n/a 1,600 *partly includes data concerning commercial properties / partly estimated In terms of location, Berlin remained the top investment destination among the large German cities (2015: 26.2 %) and accounted for 15.7 % of all transactions, although the number of transactions declined slightly. However, the growing shortage of products in major cities prompted a further increase in investments in secondary and tertiary locations. Although large deals and company takeovers were underrepresented compared to the previous year, this market segment picked up significantly in the fourth quarter. In 2016, half of the 20 major transactions above 100 million took place within the final three months. These transactions included the acquisition of Conwert by Vonovia that represented the largest deal of the year and comprised more than 20,000 residential units, as well as the purchase by Morgan Stanley on behalf of Chinese Sovereign Wealth Fund China Investment Corporation (CIC) of the BGP portfolio from BGP Holding with 17,000 residential and commercial units for around 1.2 billion. Patrizia also acquired a residential portfolio from several Bouwfonds funds that consisted of around 3,500 residential units located mainly in North Rhine- Westphalia, Lower Saxony and Bavaria. The average price of a residential unit stood at around 97,000 in 2016 based on all transactions. Thus the sales price has risen Source: apollo valuation & research GmbH sharply by 42.3 % compared to the previous year (2015: 68,200 per unit), which is due to three decisive factors. At the top of the list is the increase in the sale of new project developments, which command a higher price per square metre. The sales volume in this market segment reached around 3.1 billion, accounting for a share of 22.5 % and representing an increase of 41.2 % compared to the previous year (2015: 2.2 billion / 9.2 %). As well as the increased investments in new developments, prices of existing properties have also risen, especially in the major conurbations. The third factor affecting prices was the decline in large deals, which generally deliver a lower average price. The number of large portfolio sales and company acquisitions is expected to be even lower in 2017, primarily because of the absence of suitable products following deals such as the acquisition of Conwert by Vonovia that was completed before the end of This will be counterbalanced by a rising number of project development and portfolio sales in the sub- 100 million category. Through this a transaction volume of more than 10 billion is therefore a realistic prospect for Certain events, such as if German residential property giants Vonovia and Deutsche Wohnen manage to complete their merger after all, would raise this forecast. Although that deal recently collapsed, Vonovia has not ruled out a fresh bid.

6 ONE PARTNER. ALL SERVICES. ALL ASSET CLASSES. OFFICE RETAIL LOGISTICS RESIDENTIAL ASSET MANAGEMENT ACCOUNTING BUILDING MANAGEMENT PROJECT DEVELOPMENT VALUATION AND RESEARCH CORPORATE FINANCE ADVISORY CORPORATE REAL ESTATE SERVICES PROPERTY MANAGEMENT SALES LETTING YOUR PROPERTY PARTNER WE DISTINGUISH OURSELVES BY OWNER-MANAGED PARTNER ACTIVE IN DAY-TO-DAY BUSINESS MORE THAN 25 YEARS OF MARKET EXPERIENCE INDEPENDENT INNOVATIVE SOLUTION-ORIENTED LOCAL NATIONAL TOP NETWORK FLEXIBLE CUSTOMER-FOCUSED COMPETENT Copyright NAI apollo group, This report is for information purposes only. It was compiled with the utmost care and is based on information from sources that we regard as being reliable, but for which we assume no liability for their accuracy, completeness or correctness. Estimates, figures and forecasts contained in this document are for guidance only. This report does not pursue the aim of promoting the purchase or sale of a particular financial investment and thus should not be considered as such an offer. The reader of this report must make his or her own independent decisions in regards to correctness and completeness. The NAI apollo group assumes no liability for direct or indirect damage that arises through inaccuracies, omissions or errors in this report. We reserve the right to make changes and/or additions to the information contained therein at any time. Neither the report nor parts thereof may be published, reproduced or passed on without the written consent of the NAI apollo group.