02. Juli 2012 
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Residential portfolios - German investment market booming
According to figures of Cushman & Wakefield in the first half of 2012 a total of 23 portfolio transactions of more than 250 dwelling units took place (H1 2011: 43). Despite the significant fall in the number of transactions in this segment the number of units changing hands actually increased, due to several very large transactions, to some 133,000, an increase of 96% compared to the first half of 2011. Investment volume was approximately 6.62 billion Euros, a rise of 100 % over the same period (H1 2011: 3.31 billion Euros).
This means that to mid-year, both in terms of traded dwelling units and transaction volume, the figures for 2011 have already been substantially exceeded. In 2011 as a whole, and including the GSW flotation 76 transactions took place involving some 121,000 dwelling units and total investment volume of 6.18 billion Euros. Average transaction size has leapt to some 5,800 units (H1 2011: 1,600). Apart from the placing of the final 20% of GSW with an asset volume of some 500 million Euros a further four large transactions were largely responsible for the extremely good figures:
• Sale of LBBW Immobilien comprising some 21,700 units to a consortium of Patrizia Immobilien AG (about 1.435 billion Euros).
• Sale of DKB Immobilien with some 25,000 units to TAG AG (about 960 million Euros).
• Takeover of the Hawk portfolio (former Speymill) with some 22,000 units and a volume of around 1.0 billion Euros by Cerberus.
• Sale of BauBeCon with some 23,500 units (1.235 billion Euros) by Barclays Bank Plc. to Deutsche Wohnen AG.
“After a collapse in investment volume in 2009 and 2010 due to the dearth of major transactions, since the beginning of 2011 we have been seeing a significant increase of activity in the institutional investment market”, stated Matthias Franz, Partner in the Corporate Finance department of C&W Germany. “Although it is unlikely that the sales of TLG Wohnen, GBW AG and the putative sale of a large Gagfah portfolio will all be closed this year, we expect a transaction of some 10 billion Euros for the year as a whole.”
The average purchase price achieved has fallen slightly since the end of 2011 at some 770 Euros/m² (2011: 790 Euros/m²). The average multiples achieved in this segment have also softened to 13.0 times current net rent (2011: 13.7-times). The breadth of variation remains wide: while for properties in eastern Germany in secondary locations, multiples can fall well below 10 times, investors are prepared to pay up to 16 times for attractive portfolios in the western urban regions or in Berlin.
This means that to mid-year, both in terms of traded dwelling units and transaction volume, the figures for 2011 have already been substantially exceeded. In 2011 as a whole, and including the GSW flotation 76 transactions took place involving some 121,000 dwelling units and total investment volume of 6.18 billion Euros. Average transaction size has leapt to some 5,800 units (H1 2011: 1,600). Apart from the placing of the final 20% of GSW with an asset volume of some 500 million Euros a further four large transactions were largely responsible for the extremely good figures:
• Sale of LBBW Immobilien comprising some 21,700 units to a consortium of Patrizia Immobilien AG (about 1.435 billion Euros).
• Sale of DKB Immobilien with some 25,000 units to TAG AG (about 960 million Euros).
• Takeover of the Hawk portfolio (former Speymill) with some 22,000 units and a volume of around 1.0 billion Euros by Cerberus.
• Sale of BauBeCon with some 23,500 units (1.235 billion Euros) by Barclays Bank Plc. to Deutsche Wohnen AG.
“After a collapse in investment volume in 2009 and 2010 due to the dearth of major transactions, since the beginning of 2011 we have been seeing a significant increase of activity in the institutional investment market”, stated Matthias Franz, Partner in the Corporate Finance department of C&W Germany. “Although it is unlikely that the sales of TLG Wohnen, GBW AG and the putative sale of a large Gagfah portfolio will all be closed this year, we expect a transaction of some 10 billion Euros for the year as a whole.”
The average purchase price achieved has fallen slightly since the end of 2011 at some 770 Euros/m² (2011: 790 Euros/m²). The average multiples achieved in this segment have also softened to 13.0 times current net rent (2011: 13.7-times). The breadth of variation remains wide: while for properties in eastern Germany in secondary locations, multiples can fall well below 10 times, investors are prepared to pay up to 16 times for attractive portfolios in the western urban regions or in Berlin.
