The pronounced upward trend on the Hamburg market for investments in commercial properties culminated in a total transaction volume of 3.65 billion euro for 2014, whereby the fourth quarter alone saw commercial real estate change hands for a total of 1.25 billion euro. Figures from Grossmann & Berger show that the transaction volume has grown by almost a third year on year, to close well above the ten-year average of 2.61 billion euro. “This is the best result since 2007”, says Axel Steinbrinker, managing director of Grossmann & Berger.
Half of the twelve biggest known transactions, i.e. with prices of over 80 million euro, took place in the fourth quarter. 20 contracts involving sums over 50 million euro each were registered in 2014, seven of them priced at over 100 million euro. Also in 2015, the real estate expert expect further great demand.
Particularly Sough After: Inner City, HafenCity, and St Pauli
Investors concentrated on the inner city and HafenCity sub-markets, which accounted for 33 per cent and 15 per cent of the transaction volume respectively. Of the twelve biggest contracts in 2014, four properties were in City, and four in HafenCity; three of the HafenCity contracts were signed in the fourth quarter.
- Grossmann & Berger GmbH © Grossmann & Berger GmbH
In the City sub-market, the most expensive transaction was the second-quarter sale of Karstadt-Sport (Lange Mühren 14), bought by Pramerica from Signa Holding for some 110 million euro. Investors also turned their attention to St. Pauli, which saw 11.5 per cent of the transactions by volume. Three of the best-known buildings in St. Pauli – the Atlantic House, the Dancing Towers and Millerntor – also changed hands in 2014. The last-named (Millerntorplatz 1) was sold by Credit Suisse in the fourth quarter.
The Biggest Transactions
Office properties were the most-traded assets on the Hamburg investment market, where they made up 74 per cent of the total volume, which translated into 2.69 billion euro. Indeed, ten of the twelve biggest sales, generating 1.37billion euro, were office buildings. Other asset classes to note were retail properties, accounting for twelve per cent of the volume, and hotels, generating some seven per cent. No other known retail property sale was bigger than the Karstadt-Sport transaction. In the hotel sector about a third of the volume of transactions, and biggest trade in this type of asset, was the fourth-quarter sale of the Atlantic Kempinski (An der Alster 72-29, Alster Ost), for which Asklepios paid Octavian Hotel Holding some 80 million euro.
Increasingly In Favour With International Investors
National investors were the biggest players on the market for commercial real estate, but more than 40 per cent of buyers and sellers came from overseas. “International players were over-proportionally involved in the twelve biggest transactions”, says Steinbrinker. Most of the non-domestic buyers and sellers came from the USA, Switzerland, Sweden, Canada, the UK, France, Austria and Spain.
“This record result brings back memories of recent boom years and how they were followed by the global financial crisis. But the situation is different now. Although interest rates are low and there is considerable pressure to find investments for liquid funds, banks are far more cautious about lending. Investors no longer buy properties “on the fly” but perform a careful due diligence analysis before they make a decision. That also protects the Hamburg investment market from over-heating”, says Steinbrinker. “In view of the great demand and several anticipated transactions involving big-ticket properties, we expect to see brisk trading continuing on the market in 2015.”
Hamburg Office Market Also Reports Growth in Take-Ups
The take-up of office space in Hamburg reached 525,000 m² in 2014. Thus, the Hanseatic city not only increased last year’s result by nearly 17 per cent, but also surpassed the ten-year average by seven per cent. BNP Paribas Real Estate (BNPPRE) will publish these results of its office market report 2015 in mid-February.
Dominated By Large Transactions
Compared with other major office locations, Hamburg is – next to Berlin – the only market to have improved sales last year. In BNP’s annual Hamburg, the Elbe city is thus ranked third after Berlin and Munich. “The result was mainly caused by above average volume of large transactions with more than 10,000 sqm, which led to a high proportion of owner-occupiers”, explains Marco steel, CEO of BNP Paribas Real Estate GmbH and Hamburg branch manager. Last year’s largest contracts include Deutsche Telekom at City North (32,200 m²) and VBG Administrative Professional Association Statutory Accident Insurance in Barmbek (22,000 m²).