Annual Report 2010 - Muenchener Hypothekenbank eG

18 | 19 münchener hypothekenbank eg | annUaL report 2010 management report few business centres, as seen in many other European countries, was also noted in germany albeit to a lesser extent. Nonetheless, with stable market prices, the transaction volume increased over the same figure noted in 2009 by two-thirds, to about € 22 billion. There were strong regional differences. While the transaction volume in Munich remained basically unchanged at a fairly constant high level in comparison to the same year- ago figure, it nearly doubled in Berlin, while frankfurt also saw significant growth. in particular, office and retail properties were sought in the commercial sector, and there was clear interest from foreign investors. The project volume also increased once again, indi- cating participants’ confidence in the german commercial property sector. The rental market for office properties showed a similar situa- tion. german cities with stronger economies reported stable to clearly rising turnover for rental space. on average, however, this did not lead to significant increases in rents. Rents for good to very good office space remained largely unchanged at a high level. A positive trend was seen for logistical properties. The strong recovery was reflected by a strong increase in property sales. in both the Berlin and Munich regions, for example, prop- erty sales increased by nearly 50 percent, and by about 60 per- cent in the hamburg region. commerciaL property markets – internationaL Throughout Europe, commercial property markets continued to be influenced by the effects of the economic and financial mar- ket crisis, with regional differences. Basically, investors were seeking to invest in very good properties in excellent locations. The more critical investors believed a country’s economic situ- ation to be, the greater the emphasis they placed on a proper- ty’s quality and location. in Spain, for instance, the concentra- tion on prime locations in large cities, especially Madrid, was more apparent than in france or the uK. on an overall basis, however, the number of property investments once again rose. The transaction volume in Europe increased by about 50 percent to € 105 billion with the fourth quarter accounting for one-third of sales. office properties in top locations in major European metropoli- tan areas were once again in much greater demand during the past year. investors considered the cities of London, Paris, Brus- sels, vienna, Zurich, Marseilles and also Madrid, along with their surrounding metropolitan areas, to be less susceptible to a reces- sion. Thus the uK’s unclear economic prospects did not prevent London from enjoying a high investment volume despite rising prices and sinking returns on investment. Similar factors applied to the development of rental prices. due to the significant decline in new construction and project volumes during the crisis, there was a serious shortage of mod- ern, high-quality spaces in many major European metropolitan areas. As a result, rents remained stable or, in some cases, increased notably. At the same time, the first sign of recovery was seen in the immediate vicinity of top locations, as investors and renters were often no longer willing to pay the high prices even in the truly top locations. Rentals in second-tier and third- tier metropolitan locations remained difficult, along with those in weaker economic regions. The uS commercial property market was divided in 2010. Par- ticularly in the second half of the year, the core markets of New York, Washington, d.C., Boston, San francisco and Los Angeles saw a significant revitalisation. financial institutions once again showed more willingness to finance stabilised commercial properties. in the “B” markets, on the other hand, the situation was still strained. Signs of stabilisation were not yet apparent there. This qualitative division of the property market could be seen for offices, retail stores, logistical and hotel properties in equal measure. overall, the tangible revital- isation was based on still fragile favourable economic data. “the German commercial property market recovered increasingly over the course of 2010 as the volume of transactions rose notably.”