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ePaper created 2013-04-15, 17:20:51 | version 1.25.7
Management report 17 ment continued to generate a high level of investor interest. Following a strong surge at the end of the year involving some major deals, the volume of transactions (excluding residential property) rose on a year-over-year basis by € 2 billion to about € 25 billion. Foreign investors’ share of these transactions remained at a constant level compared to the previous year at approximately 40 percent. The focus on major-volume trans- actions was striking as foreign investors alone accounted for a total of € 3.5 billion in four major portfolio transactions con- cluded in 2012. Returns remained low as investor interest remained focused on core properties. This particular concentration was also reflected by the fact that about 60 percent of the volume of transactions were concluded in the seven top locations in Germany. In terms of usage categories, office properties were ranked first with a 40 percent share of total sales followed by retail properties with about 30 percent. The residential property portfolio market was also very lively in 2012: investments of € 11 billion were made over the entire year which equalled an increase of about 70 percent. “Demand for commercial property was strengthened by the robust German economy.” The office rental market contracted slightly. Turnover of space in the seven top locations in Germany declined by 11 percent. Driven by the lowest volume of new construction in five years the vacancy rate in the seven top locations fell from 9.5 percent to 8.8 percent, while top rents in these locations rose by approxi- mately 3 percent. Commercial property – international The international commercial property markets developed mod- estly although an increase in activities was noted in the fourth quarter. In addition to Germany, investor interest was primarily focused on the UK. Towards the end of the year interest strength- ened in France as well as Scandinavia. The primary interest of international investors in the UK was once again focused on the core segment in London and cities with strong economies. The appeal of core properties fell as their prices rose and investors’ interest shifted back to non-core seg- ment properties. The development of rents paid varied. Slightly higher rents for office space were observed in good and very good locations. In contrast, minor declines in rents paid were noted in almost all of the other segments. France was also viewed as a safe location for property invest- ments. Nevertheless, total investments observed up to the end of the third quarter of 2012 were slightly lower. Investor interest in France was also mainly aimed at core properties. Demand exceeded supply in this segment. As a result, prices in this seg- ment either rose or at least remained stable whereby the price gap to B-location properties widened. As a consequence, returns on investments in core properties came under pressure. The Commercial Residential (only portfolio) Source: Ernst & Young Research, January 2013 2007 2008 2009 2010 2011 2012 3.8 10.1 3.3 12 53.3 4.8 21.1 19.1 6 11 23 25 70 60 50 40 30 20 10 0 Development of commercial property transactions in Germany 2007 – 2012 Figures in € billion