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Germany : commercial investment market - Q2 2016

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Germany : commercial investment market - Q2 2016

Commercial property changed hands for a total of approximately €18.1bn during the first half of 2016, representing a 28% decrease compared with the corresponding period last year.

Demand from investors remains very high. That the transaction volume was not greater is primarily attributable to the fact that purchasers remain highly focused on core assets. The problem is that few such properties are being offered on the vendor side since longterm investors are generally faced with a paucity of attractive investment alternatives.

The general environment continues to favour investment in German commercial property. Economic conditions remain healthy, the major cities are growing, the letting markets are showing positive growth and interest rates remain low. Against this background, the amount of capital seeking investment opportunities is likely to expand further and highly capitalised market participants, such as sovereign wealth funds and pension funds, have a definite desire to increase their allocations to real estate.

Source : Savills

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Keywords : Savills