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Solid transaction volume for Hamburg's real estate investment market due to takeovers and participation deals

Verena Bauer • 11/01/2023

In 2022, Hamburg's commercial real estate market achieved a transaction volume of around EUR 4.1 billion, reports international real estate consultancy firm Cushman & Wakefield. This exceeds the weak result of the previous year by 35 percent and is close to the 5-year average.

Just under half of the transaction volume was contributed by takeovers and participation deals such as the takeover of alstria office by the Canadian asset manager Brookfield Properties in the first quarter and Commerz Real's acquisition of a 25 percent stake in Elbtower in the third quarter. Traditional sales of properties and land totalled around EUR 2.1 billion. 

In a quarterly comparison over the year, the 1st and 3rd quarters were the strongest due to the large takeovers and participation deals. Both achieved a quarterly result of more than EUR 1 billion. In contrast, the 4th quarter closed with a total of EUR 550 million in the absence of any noteworthy special effects or large-volume transactions.

Investment focus on city centre

With 27 percent of the transaction volume, the real estate investment focus was on the City Centre submarket. Four properties from the alstria portfolio as well as the sales of the Klöpperhaus building in the second quarter and Connexion in the third quarter, with a value of over EUR 100 million each, contributed significantly to this.

Office property the asset class with the highest transaction volume

Office properties and office development projects were the most heavily traded asset class with a transaction volume of EUR 2.5 billion. This corresponds to 61 percent of total commercial real estate transaction volume. The largest office transaction, the sale of Altes Fernmeldeamt in the Harvestehude / Rotherbaum submarket in the third quarter for around EUR 400 million by Peakside Capital to Values Real Estate, was also the largest single-property real estate transaction in 2022 as a whole.

The second-strongest asset class was retail property at around EUR 470 million, contributing 11 percent of total commercial real estate transaction volume. The weak previous year's EUR figure of 100 million was thus almost quintupled. The sale of the Klöpperhaus department store in the first half of the year contributed significantly to achieving a strong result. However, the year-end result still fell short of the 5-year average by 5 percent.

The third-strongest asset class was logistics and industrial real estate with around EUR 340 million and a contribution of 8 percent to total transaction volume. Although this was 32 percent below the previous year's high figure of around EUR 500 million, it was 31 percent higher than the 5-year average. 

Alexander Kropf, Head of Capital Markets, explains:
"The takeover of the very large alstria portfolio and major transactions such as the weighty sale of the Klöpperhaus should not hide the fact that rising interest rates and changed financing conditions are also hampering institutional investors' willingness to buy in Hamburg. This affected the 4th quarter in particular. Investors will still be cautious in the first half of 2023."

Yields continue to rise

The net initial yield for prime office properties in Hamburg's central locations rose by 65 basis points year-on-year to 3.35 percent. Based on the economic outlook for H1 2023, prime yields for office properties are expected to continue to rise. The prime yield for 1-A retail properties is currently 3.75 percent. It has risen by 10 basis points compared to the previous year. For prime logistics properties, the prime yield is 4 percent, corresponding to an increase of 100 basis points since the end of 2021.

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verena bauer
Verena Bauer

Head of Business Development Services, Germany • 60311 Frankfurt am Main

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