International real estate consultancy firm Cushman & Wakefield reports a transaction volume of 215 million euros for Hamburg’ commercial real estate investment market in the 1st quarter of 2023. This is the lowest quarterly figure since 2009 and is 88 percent lower than a year ago, although that result was particularly strong due to the alstria office takeover (Q1 2022: 1.81 billion euros). The current result also fell 81 percent short of the Q1 5-year average of 1.12 billion, euros.
Logistics and industry are asset classes with the highest transaction volume
The largest single transaction in Q1 2023 was the sale of Panattoni Hotels Park Hamburg Nord to J.P. Morgan Asset Management and Cromwell Property Group (over EUR 90 million). This deal made logistics and industrial real estate the asset class with the highest transaction volume, contributing 44 percent of the total. In Q1 2022 the amount was very similar but accounted for only 5 percent of the total.
Office and retail with smaller shares
The second-strongest asset class was office properties and office development projects, at around 60 million euros, contribution only 38 percent of total CRE transaction volume. This result fell 96 percent short of the very high figure of a year previously (1.6 billion euros). The largest office transaction was the sale of Schumacher Office in the City Centre submarket by Gisev family office to asset management company Strike.
At around 30 million euros, retail real accounted for 14 percent of transaction volume. The only transaction in this asset class was Deutsche Euroshop's ownership share increase in the Phoenix Center in Harburg, to 75 percent.
Alexander Kropf, Head of Capital Markets Germany, explains: "In line with expectations, potential investors in Hamburg have acted very cautiously due to the increasing shortage of liquidity in reaction to rising interest rates and high inflation throughout Germany. Due to the mixed situation, restrained transaction activity is also expected in the second quarter, but much of the market correction seems to have already taken place. In the second half of the year we expect planning security to increase and, as a result, more large-volume transactions.“
Returns climb farther
The net initial yield for first-class office properties in Hamburg’s central locations has been rising steadily since the turnaround in interest rates in the second quarter of 2022. After the historically low 2.65 percent in the first quarter of 2022, the prime yield has now risen to 3.80 percent. That is 115 basis points more than a year ago and 45 basis points more than at the beginning of the year. The prime yield for 1a retail properties is currently 4.10 percent. It has increased by 50 basis points compared to the previous year. For first-class logistics properties, the prime yield is 4.15 percent, which corresponds to an increase of 115 basis points compared to the first quarter of 2022.
Logistics and industry are asset classes with the highest transaction volume
The largest single transaction in Q1 2023 was the sale of Panattoni Hotels Park Hamburg Nord to J.P. Morgan Asset Management and Cromwell Property Group (over EUR 90 million). This deal made logistics and industrial real estate the asset class with the highest transaction volume, contributing 44 percent of the total. In Q1 2022 the amount was very similar but accounted for only 5 percent of the total.
Office and retail with smaller shares
The second-strongest asset class was office properties and office development projects, at around 60 million euros, contribution only 38 percent of total CRE transaction volume. This result fell 96 percent short of the very high figure of a year previously (1.6 billion euros). The largest office transaction was the sale of Schumacher Office in the City Centre submarket by Gisev family office to asset management company Strike.
At around 30 million euros, retail real accounted for 14 percent of transaction volume. The only transaction in this asset class was Deutsche Euroshop's ownership share increase in the Phoenix Center in Harburg, to 75 percent.
Alexander Kropf, Head of Capital Markets Germany, explains: "In line with expectations, potential investors in Hamburg have acted very cautiously due to the increasing shortage of liquidity in reaction to rising interest rates and high inflation throughout Germany. Due to the mixed situation, restrained transaction activity is also expected in the second quarter, but much of the market correction seems to have already taken place. In the second half of the year we expect planning security to increase and, as a result, more large-volume transactions.“
Returns climb farther
The net initial yield for first-class office properties in Hamburg’s central locations has been rising steadily since the turnaround in interest rates in the second quarter of 2022. After the historically low 2.65 percent in the first quarter of 2022, the prime yield has now risen to 3.80 percent. That is 115 basis points more than a year ago and 45 basis points more than at the beginning of the year. The prime yield for 1a retail properties is currently 4.10 percent. It has increased by 50 basis points compared to the previous year. For first-class logistics properties, the prime yield is 4.15 percent, which corresponds to an increase of 115 basis points compared to the first quarter of 2022.
