Market survey. 2018/Q1-4 Hamburg. Commercial Investment. Hamburg Sylt Berlin

Transcription

1 Market survey Commercial Investment 2018/Q1-4 Hamburg Hamburg Sylt Berlin

2 Key Facts Investment 5.95bn 2 Office: 55% Office: 2.8% Commercial: 2.7% Logistics: 4.5% +65% year-on-year change -19 pp year-on-year change -13 pp year-on-year change -0.1 pp year-on-year change -0.2 pp year-on-year change -0.1 pp year-on-year change pp = percentage point Share of foreign investors Strongest asset class (Net) Prime yield 2018 is a unique year in the history of investment in Hamburg real estate. The run on commercial properties produced a record result of 5.95bn, a volume of transactions that clearly indicates that Hamburg is a prime location for investors. Axel Steinbrinker Managing director One more record added to list By the close of 2018, 170 transactions had been reported on the investment market for commercial properties in Hamburg, setting a new record total of 5.95bn and overshooting the prior year s mark by 65%. The result shattered the records previously set in 2016 and 2007 when trades totalling 4.5bn were registered. In the 4th quarter alone, commercial properties changed hands for a total of 1.95bn. A large number of transactions for over 100m each are behind this exceptional year, unlike any experienced before in Hamburg. 16 sales in all, totalling 2.7bn, fell into this category. The market was mainly dominated by single property sales, which accounted for 73% of total transactions. In 2018 the biggest transaction posted was the sale of the Springer Quartier (Kaiser-Wilhelm-Strasse, City) for which some 400m was paid in the 1st quarter. One big transaction in the 4th quarter was the sale of the Intelligent Quarter ensemble consisting of the Shipyard and Watermark office buildings (Überseeallee 10+12, HafenCity) for which ECE and Strabag received over 150m from Real I.S. Another big-ticket sale in the year s closing quarter was that of the Quartier am Zeughaus (Christoph-Probst-Weg 26-31, 3-4, 1-2, Eppendorf) for which Godewind Immobilien paid Blackstone/Officefirst some 150m. Likewise in the 4th quarter Warburg HIH finalized the sale of its office property portfolio to the French asset manager Amundi. Valentinshof (Caffamacherreihe 8-10, City) and Brooktorkai 20 (HafenCity) were among the Hamburg properties in the portfolio, each costing over 100m. Almost all of the 16 Hamburg properties with big price-tags were office buildings. The exception was the Maritim Reichshof hotel, CURIO COLLECTION BY HILTON (Kirchenallee 34-36, St. Georg) which the Event Hotel Group from Cologne sold for about 100m to InterGlobe Enterprises from India. Forward deals amounting to 1.1bn comprised 19% of the total volume of transactions. This result is double the figure seen last /Q1-4 in bn 10-year average ( ): ca. 3.2bn Q Page 2

3 Selected transactions 2018/Q1-4 Springer Quartier Kaiser-Wilhelm-Strasse City Office Investor: Pension Purchase price: ca. 400m Hanseviertel Große Bleichen 36 City Mixed-Use Investor: CBRE Global Investors Purchase price: over 300m Olympus Campus Wendenstrasse HafenCity Office Investor: ÄVWL/Hines Purchase price: over 250m Sumatrakontor Überseeallee 1-3 HafenCity Office Investor: REAL I.S. Purchase price: ca. 190m Watermark & Shipyard Überseeallee HafenCity Office Investor: REAL I.S. Purchase price: over 150m Source: Strabag gmp international Real Estate GmbH Watermark & Shipyard Überseeallee HafenCity 2018/Q1-4 in millions by size No. of transactions year. It also illustrates that the state of the office market in Hamburg is such that well in advance of their completion many new build premises are already let and sold to the final investors. Trades in the central sub-markets City and HafenCity amounted to some 2.3m, or a share of 39%. Investors continued to focus on central locations. Some 738m was generated by the sale of 17 properties in City South. The biggest transaction of 2018 in this sub-market was the sale of the Olympus Campus (Wendenstrasse 14-18) for around 250m. 4% % /Q1-4 by asset class Industrial/ logistics Undeveloped sites Hotel Retail % 9% 22% 1, % 1, % 2,651 over % Office As in the past, office buildings remained the most traded asset class, accounting for 55 % of the trading volume and a total of 3.3bn. The most recent of the 4th-quarter trades in this category was the sale of what used to be Hotel Prem, which was converted into the Prem Contor office buildings in 2008 (An der Alster 9, Alster East). A private investor sold the building for some 17.6m to the LHI Group for an open end property investment fund (retail). Following in second place, mixed use properties comprised 13% of the market ( 797m). Hanseviertel (Grosse Bleichen 36, City) and LaHoMa (Langenhorn Markt 1-18) were the two major transactions in the latter category. Two portfolio trades involving industrial/logistics properties generated 274m, an increase of 50 % over the previous year. One portfolio was the Optimus Prime, part of the Beos Corporate Real Estate Funds Germany I, and purchased by Helaba Invest for institutional investors in Germany. Eight of the 21 properties in this portfolio are in Hamburg. The estimated total value of the Hamburg properties in this sale is some 100m. Aurelis Real Estate s Laetitia portfolio, consisting of 32 properties, was sold at the end of the year to the first corporate real estate fund set up by Beos. Two logistics properties in Hamburg, with a total value of 15m, were part of this trade. Apart from hotels, the volume traded in all asset classes was well above that of the prior year. The volume of trades in hotel assets fell by 3 to some 370m. Mixed use 13% With regard to price categories, the segment costing over 100m posted the greatest year on year growth, rising by 153% to 2.7bn. Likewise well above the prior year s figure were trades in the 26m to 50m price bracket (up 68%). Page 3

4 Prime yields /Q4 (Net) initial yield in % Industrial/logistics 5.40 Office /Q4 2018/Q1-4 by vendor groups Insurance companies Project developers Commercial 37% 10% 11% 15% 13% 14% Listed property investment companies- AGs/REITs Pension insurers/ pension Specialist Yields 2018 sees lowest mark yet Over the course of the year, the run on commercial properties has further squeezed prime yields in Hamburg. By the end of the year yields on commercial buildings had slipped 20 basis points to 2.70%. Premium yields on office properties dropped 0.1 percentage points to 2.8 %. On logistics properties the premium yield was 4.5% by the year s end. Investors and vendors Vendors: Developers strongly represented In 2018 national investors featured most prominently on the market for investment in commercial properties in Hamburg. A mere 2 ( 1.6m) of the investment trades originated abroad, mainly in the USA and Great Britain. Listed property investment AGs/REITS were the most active group of buyers in 2018, accounting for 15% of the total volume ( 881m), followed by pension and professionals pension schemes/ with a 14% share, and specialist with 13%. Two types of investor were most in evidence as vendors. Private equity /opportunity were behind 27% of the total traded ( 1.62bn). Here the biggest player was Blackstone which sold its Officefirst portfolio including real estate such as the Sumatrakontor (Überseeallee 1-3), the Quartier am Zeughaus, (Christoph-Probst-Weg 26-31, 3-4, 1-2) and the portfolio in Harburg called The Channel. Developers formed the second largest group of vendors in 2018, with a share close to 27% ( 1.58bn). They are benefiting from the current high levels of demand for rental offices in new builds and the resultant early pre-letting agreements, which in turn leads to buildings being sold prior to completion. Outlook Market set to slow in /Q1-4 by vendor groups 25% 27% Private equity / opportunity There will still be demand for suitable investment properties in Hamburg in The good market environment, ongoing low interest rates and the stability of the German economy are likely to ensure that business remains brisk in the year just started. However, the year 2019 is not expected to repeat the exceptional performance of 2018 and experts reckon with a total transaction volume of between 4.0bn and 4.5bn. Prime yields probably bottomed out at the end of It is to be expected that yields will now consolidate. Specialist Open-end retail Insurance companies 9% 27% Project developers Page 4

5 Skilled consultancy Services und contacts From left to right: Sonja Ebert Anna Martens What can we do for you? An analysis of the property markets is an important part of the wide-ranging consultancy services offered by Grossmann & Berger. We would be pleased to be of assistance in your decision-making process and can draft an offer that is tailored to your specific requirements. Sonja Ebert MBA Real Estate Management Research Phone: +49 (0)40 / Mail: s.ebert@grossmann-berger.de Anna Martens Diplom-Ingenieur Master of Urban Planning Research Phone: +49 (0)40 / Mail: a.martens@grossmann-berger.de Glossary Definitions, investment market : The transaction volume is the sum of the purchase prices of all commercial property sold in Hamburg during the period under review. The date of signing determines when a transaction is included in the statistics. Buy to let investments in residential properties are not included in the transaction volume. 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. Individual properties and portfolio transactions: An individual property transaction means the purchase of a building used for commercial purposes or of a piece of land for development. Portfolio transactions involve the purchase of at least two separate properties in different locations. Prime yield: The prime yield is the initial return attainable on a property that has been let on normal market terms (tenants with good credit ratings), has top quality structure and fit-out and stands in one of the very best locations. It is stated as the net initial yield in per cent, i.e. the ratio between the annual rental income less nonapportionable ancillary costs and the gross purchase price (net purchase price plus land acquisition tax, notary s fees and agency commission.) Photo credits: Cover: Springer Quartier, Kaiser-Wilhelm-Strasse MOMENI Gruppe, Page 2: Mohlenhof, Burchardstrasse 17 Jenner Egberts Fotografie, Page 3: Watermark und Shipyard, Überseealle Strabag Real Estate GmbH. We draw your attention to the fact that all statements made here are non-binding. Most of the information is based on third-party reports. The sole intention of this market survey is to provide general infomation for our clients. Grossmann & Berger GmbH Bleichenbrücke 9 (Stadthöfe) D Hamburg Phone: +49 (0)40 / Fax: +49 (0)40 / info@grossmann-berger.de Managing directors: Andreas Rehberg, Holger Michaelis, Lars Seidel, Axel Steinbrinker Chairman of the supervisory board: Frank Brockmann Registered office Hamburg Registered at Hamburg no. B Page 5