Cushman & Wakefield, one of the world’s largest real estate consultancies, has recorded an investment volume of around EUR 465 million for the Hamburg commercial real estate market in the first half of 2024. Although this exceeds the previous year’s result of EUR 450 million by 3 per cent, the result is 67 per cent below the 5-year average of around EUR 1.4 billion for the first half of the year. After the even lower result in the previous year, this is the second weakest first half of the past ten years.
Simon Jeschioro, Head of Capital Markets & Investment Advisory Germany at Cushman & Wakefield, comments: “The high level of interest rates continues to curb the willingness of institutional investors to invest. Nevertheless, there is movement in the Hamburg investment market, which is reflected in rising transaction figures. We anticipate a moderate increase in investment activity over the remainder of the year, as a price level has been reached at which there is a willingness to sell again and purchases appear sensible. This will be supported by a macroeconomic environment that offers more planning security again.”
Transaction volume: Rising activity in the first half of the year, but no major transactions
- 47 per cent more transactions were recorded in the 1st half of 2024 than in the same period of the previous year.
- Following the 1st quarter, there were no major transactions above EUR 100 million in the 2nd quarter either. 89 per cent of the transaction volume was attributable to properties below EUR 50 million.
- In the reporting period, 82 per cent of the transaction volume was realised with the sale of core and core-plus properties. Higher-risk investments in the value-add or opportunistic categories accounted for 16 per cent.
- With a 44 per cent share of the total volume, international investors were more active again compared to the same period last year (34 per cent). This roughly corresponds to the 5-year average for the first half of the year (45 per cent).
Yields: Yield peak appears to have been reached
- The net initial yield for first-class office properties in Hamburg's central locations stood at 4.90 per cent at the end of the second quarter of 2024. This corresponds to an increase of 15 basis points compared to the previous quarter and an increase of 90 basis points within one year.
- The prime yield for commercial properties in prime locations remains stable compared to the previous quarter at 4.50 per cent. The year-on-year increase amounts to 40 basis points.
- The prime yield for first-class logistics properties is also stable compared to the previous quarter at 4.50 per cent – that is 35 basis points more than a year ago.
- Cushman & Wakefield assumes that the peak in the rise in yields has been reached. In view of the ECB's first interest rate cut in June and the expectation of two further cuts by the end of the year, there is potential for subsequent falls in prime yields.
Types of use: logistics and industrial properties remain in first place in the turnover ranking
- Sales of logistics and industrial properties achieved a transaction volume of around 155 million euros in the first half of the year and are the asset class with the highest turnover, accounting for 33 per cent of the total transaction volume. The previous year's figure (EUR 100 million) was exceeded by 55 per cent, while the result is 16 per cent behind the 5-year average for 1st half-years.
The largest single transaction on the Hamburg real estate investment market remains the sale of a logistics centre on Vollhöfener Weiden by a fund managed by Tristan Capital Partners to Montea in the 1st quarter (around EUR 50 million).
- Office properties were the second strongest asset class with around 150 million euros and a share of 32 per cent. The result is 44 per cent below the first half of the previous year (EUR 270 million) and 81 per cent below the 5-year average for 1st half-years (EUR 796 million).
One of the biggest changes of ownership was the sale of the office and commercial building at Dornbusch 2 and 4 in the city centre submarket from French investor Ofi Real Estate to investment manager Montano Real Estate for around EUR 37 million.
- There were no transactions in the trading property segment in the second quarter. This means that the investment volume in the first half of the year remained unchanged at around 35 million euros, which corresponds to a turnover share of 8 per cent. This is 17 per cent more than in the same period last year, but 74 per cent less than the 5-year average for the first half of the year.
- Hotel properties and retail properties achieved an investment volume of around 35 million euros. This exceeds the previous year’s figure by 250 per cent, but falls 22 per cent short of the 5-year average for 1st half-years.
