Investment market in Germany: active revitalization despite difficult framework conditions (BNP Paribas Analysis)
Investment market in Germany: active revitalization despite difficult framework conditions (BNP Paribas Analysis)
In the first quarter of 2024, a noticeable revitalization of the activities was found on the investment markets, but this is not yet completely reflected in the investment sales. In total, a good 5.5 billion euros were invested in commercial properties, which corresponds to an increase in sales of 8 % compared to the previous year. In the portfolio segment in particular, a significant increase in sales was recorded. When investing in residential properties from 30 units, the increasing interest is not yet visible, the transaction volume is about a third below the previous year's value. The total turnover of the German market amounts to a good 6.3 billion euros.
The most important results of the first quarter at a glance:
- retail investments: Retail objects were the most invested in retail objects, with almost 36 % of the total commercial investment turnover omitted to this asset class. The transaction volume is 29 % higher than in the same period last year. Inner -city commercial buildings and objects in the food sector were particularly in demand.
- Logistics objects: A lot has also been invested in logistics objects, they are responsible for about a quarter of the total volume. The investment volume has increased by almost 50 % compared to the previous year. It is striking that the investments in logistics portfolios are only attributable to foreign investors.
- Office objects: Office objects only take third place in investment sales and have dropped by around 31 % compared to the same period last year. The development of the office markets is still unsure what is reflected in a lengthy pricing process and a weak demand.
-Hotels and healthcare real estate: 13 % less were invested in hotels than in the previous year, the share of sales is a good 4 %. At Healthcare real estate there was a decrease of 34.5 % compared to the previous year.
- Portfolio deals: In the portfolio segment, sales rose by almost 88 %compared to the previous year, a total of almost 1.15 billion euros were implemented with package sales.
- Foreign buyers: The proportion of foreign buyers is 35 % and thus moves below the long -term average. You have contributed almost 1.95 billion euros to the investment turnover over the course of the year.
-A locations: The investment volume in German A locations is 5 % higher at the beginning of the year than in the same period last year. Munich leads the sales rank at 1.28 billion euros, followed by Berlin, Hamburg, Frankfurt, Düsseldorf, Cologne and Stuttgart.
- Rendites: The returns have largely stabilized. For offices, they are on average at 4.36 %in the A locations. Munich has the highest return with 4.20 %.
The prospects for the investment markets over the course of the year are characterized by difficult framework conditions and positive signals. The weak economy and the geopolitical location are limiting factors, while the decline in inflation and possible interest reductions will have positive effects. It is expected that the recovery of the investment markets will progress gradually and will lead to increasing sales. However, an exact forecast is difficult, but a increase in sales of up to 20 % appears possible. The stabilization of the top returns is the most likely scenario, but there could be a slight return decompression towards the end of the year.