Market Survey - 2021 / Q 1-2 Berlin - Grossmann & Berger
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Market Survey Commercial | Investment 2021 / Q 1–2 Berlin
Commercial | Investment
Berlin 2021 / Q 1–2
Key Facts | Investment
€ 4,3 bn | +24% year-on-year change
60 % | −19%-pp year-on-year change
Office: 51 % | +561%-pp year-on-year change
Office: 2.65 % | − 5%-pp year-on-year change
Commercial: 2.8 % | ± 0%-pp year-on-year change
Logistics: 3.5 % | − 30%-pp year-on-year change
Hausvogteiplatz 10 Transaction volume Share of foreign investors Strongest asset class (Net) Prime yield
“ Mirroring what happened last year, an outlier transaction around 10 % (€ 443 m) was made up of properties that sold
generated the second-highest half-year result ever. The for between € 51 m and € 100 m. 74 % of the market (€ 3.2 bn)
sale of the “Fürst” added more than € 1 bn to the volume involved real estate with price tags in excess of € 100 m,
which translates into an increase of 105 % year on year.
traded in Berlin, bringing the total to € 4.3 bn. ”
To date, the biggest transaction that Grossmann & Berger
Holger Michaelis | Managing Director
has ever recorded in the German capital was the sale of the
“Fürst”, a mixed-use property (Kurfürstendamm 206 – 209,
Transaction volume Ku’damm + side-roads sub-market), which Aggregate ac-
Vivion’s sale of the “Fürst” to Aggregate Holdings quired from Vivion. The second-biggest transaction con-
is outstanding feature of the market cerned the “Quartier 206” (Friedrichstrasse 71, Mitte 1 a
sub-market), sold to RFR for € 220 m by a banking consor-
Although in the first half of 2020 large amounts were in- tium headed by Credit Suisse. A third trade was also com-
vested in Berlin real estate, the same period of 2021 fortably in the nine-figure bracket. Centrum, a developer,
closed 24 % above the prior year’s excellent result. The to- sold its new project at Landsberger Allee 52 (Friedrichshain
tal of € 4.3 bn represented the second-highest volume of sub-market) to Values Real Estate in a forward deal valued
property trading ever seen in the national capital during at € 200 m.
the space of six months. Primarily, this record value is a
attributable to a single transaction; the “Fürst”, a mixed-
use property, was sold by Vivion to Aggregate Holdings for Transaction volume
more than € 1.0 bn. This sale brought the total traded in the 2017 – 2021 / Q 1–2 | in € bn
2nd quarter to € 3.450 bn, the highest value ever record-
ed for a 2nd quarter. Grossmann & Berger expects that by
the end of 2021 real estate trades will total at least 7.5 bil- 10-year average (2011 – 2020)
approx. € 6.3bn
lion Euros because many investors are urgently in search of
assets for their cash and the number of properties on the
market is rising again.
Despite the 24 % growth of trading volume, the actual num- Q2
ber of property sales in Berlin fell by 10 %. Only 53 properties 3.45
changed hands in the first half of 2021 compared with 59 in
the same period of 2020. 11 % (€ 482 m) of the volume traded 7.3 6.8 11.1 7.4 0.85
was comprised of sales at prices between € 26 m and € 50 m, 2017 2018 2019 2020 2021/Q1-2
source: Grossmann & Berger GmbH
www.grossmann-berger.de | page 2
Commercial | Investment
Berlin 2021 / Q 1–2
Transaction volume Investment properties
2021 / Q 1–2 | by Asset class Investment business concentrated in two sub-markets
Other
Retail 3% Only two sub-markets accounted for two-figure shares of to-
Industrial/ 2%
Logistics 2%
tal trading; Ku’damm plus side-roads (39.3 %) and Friedrichs-
hain (12.8 %). These results were very much influenced by the
Sites 7%
previously mentioned sales of the “Fürst” and the property at
Landsberger Allee 52.
A further effect of the outlier trade “Fürst” was that for the
51%
first time mixed-use properties were the best-selling assets,
35% accounting for 51 % of the market (€ 2.2 bn), ahead of office
Office
real estate with a share of 35 % (€ 1.5 bn). All other asset cat-
Mixed-use
egories were appreciably below the 10 % mark.
source: Grossmann & Berger GmbH
Yields
Prime yield contracts a little
Prime yields
Compared with the same period a year ago, prime yields on
2017 – 2021 / Q 1–2 | (net) initial yield* | in %
commercial properties in Berlin bought and sold during the
1st half of 2021 again contracted slightly, having remained
3.00 3.00 office
comparatively stable over the course of 2020. The prime net
commercial
yield on office properties now stands at 2.65 %. On logistics
2.90 2.90 2.80 2.80 2.80 properties, yields softened by 30 basis points to 3.50 %, while
persisting at 2.80 % on commercial buildings.
2.70 2.70
2.65 Investors and vendors
2017 2018 2019 2020 2021/Q1–2 International actors still active
source: Grossmann & Berger GmbH
As was the case a year ago, the majority of investors buy-
ing Berlin properties in the 1st half of 2021 were foreign play-
ers. International buyers were behind 60 % of the volume
Transaction volume purchased, spending € 2.6 bn; however, they accounted for
2021 / Q 1–2 | by Investor groups only 48 % of the volume sold (€ 2.0 bn), compared with 71 % in
the same period last year. Here too, the difference between
Other
this and the prior year stems from the numerous big-ticket
Private equity Fund managers
funds/opportuni- 13% trades.
ty funds
5% Due to the big-ticket trades already described, fund manag-
ers were the most active investors, taking 57 % of the mar-
Specialist funds 6% ket (€ 2.5 bn). Developers spent € 477 m on real estate pur-
chases (11 % of total) and were thus the only other group with
Insurances 8% 57% a two-figure share of the market. Non-listed property com-
panies accounted for 33 % of the total traded (€ 1.4 bn), fol-
11% lowed by developers with a market share of 26 % (€ 1.1 bn) and
Project developers fund managers with 10 % (€ 421 m).
source: Grossmann & Berger GmbH
Outlook
Transaction volume Core properties remain focus of attention
2021 / Q 1–2 | by Vendor groups Obviously, the sale of the “Fürst” was an outlier transaction
making a large contribution to the excellent half-year result;
Other however, numerous other major trades were noted, especially
Non-listed property
17% companies in the core segment. Because their accumulated cash must be
put to work and interest rates remain low, one may assume
Banks
33% that investors will continue to be very interested in rock-solid
6% assets such as properties in good or very good locations let
Private long-term to government bodies or public institutions. Based
investors 8% on the first six months, we expect the year to close with a
figure of some € 7.5 bn of investment transactions and stable
10% yields.
Fund managers
26% Project developers
source: Grossmann & Berger GmbH
www.grossmann-berger.de | page 3Commercial | Investment
Berlin 2021 / Q 1–2
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 Mail: u.denk @ grossmann-berger.de
decision-making process and can draft an offer that is tai-
lored 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 the metropolitan area of Berlin during the period under Title: Borsigturm, 2020 | © Grossmann & Berger GmbH Berlin
review. The date of signing determines when a transaction is included in the statistics. page 2: patio Hausvogteiplatz 10 | © Grossmann & Berger GmbH Berlin.
Buy to let investments in residential properties are not included in the transaction diagrams: Grossmann & Berger Research
volume.
Asset class: A property is allocated to an asset class according to the predominant We draw your attention to the fact that all statements made here are non-binding.
way in which space is used (at least 75%) when the contract is signed. Most of the information is based on third-party reports. The sole intention of this
Individual properties and portfolio transactions: An individual property transac- market survey is to provide general infomation for our clients.
tion 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 Grossmann & Berger GmbH • Potsdamer Platz 9 • D -10117 Berlin
separate properties in different locations. Phone: +49 (0) 30/202 953 -20 • Fax: +49 (0) 30/202 953 -25
Prime yield: The prime yield is the initial return attainable on a property that has berlin@ grossmann-berger.de • www.grossmann-berger.de
been let on normal market terms (tenants with good credit ratings), has top quality Managing directors: Andreas Rehberg, Björn Holzwarth, Sandra Ludwig,
structure and fit-out and stands in one of the very best locations. It is stated as the 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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