New confidence in German markets
International investors appear to have a renewed belief that Germany’s economy is starting to take off again and according to Axel Steinbrinker, CEO of German property firm Grossmann & Berge strong demand for property comes as no surprise: “For many foreign investors Germany’s political and economic stability make its property market an attractive proposition,” he said at MIPIM.
Real Capital Analytics calculates that cross-border investment into German markets increased by 24% in 2014 in comparison with 2013. And this trend seems to have increased since the year end with global investors targeting a diverse range of assets.
For example AEW Europe has signed an investment programme focused on German retail assets. It is working with its local partner Kintyre to source and structure investments in Germany and will initially look to build a €150m portfolio of assets in lot sizes of €5m to 15m. Contracts have been signed for the first acquisition and a further eight assets are currently under offer.
Kintyre managing partner Paul Shiels said: “We see considerable value at the moment in smaller transactions, located away from the large German cities. Retailers continue to trade strongly in these areas and this creates attractive asset management opportunities.”
Meanwhile Blackstone is targeting the logistics sector in Germany through its Logicor platform. It has just bought ten logistics assets totalling 400,000 sq m from TREI Real Estate, the property arm of the Tengelmann Group. The warehouses are located close to major urban centres including Düsseldorf, Munich, Berlin and Frankfurt. Tenants include Netto Marken-Discount, Kaiser’s Tengelmann, Hellmann Worldwide Logistics and Schenker Deutschland.
This is the sixth portfolio acquired by Logicor in Germany over the past year and increases its overall German portfolio to 1 million sq m. Logicor CEO and president Mo Barzegar said: “This acquisition was an opportunity to acquire a substantial portfolio in Europe’s largest logistics market. We now have a significant footprint in Germany with 28 assets leased to a broad mix of retail, third party logistics and manufacturing customers.”
And AXA Real Estate has shown its confidence in the core Frankfurt office market by commissioning a major revamp of the landmark die Welle office complex. Working with German architects Schneider + Schumacher, AXA will undertake a significant redesign of the open areas between the main two buildings, incorporating numerous green spaces, water features and chill-out zones.
AXA’s holdings at die Welle total 75,600 sq m in two buildings rising to a height of 50 m over 13 floors. Tenants include corporate consultancies, banks, law firms and financial service providers. Matthias Leube, managing director of AXA Investment Managers Deutschland said: “Located in a prime location of the city of Frankfurt, the iconic building is renowned for its modern space, representing timeless architecture and a high level of service which makes it a core property in Frankfurt.”
Image: Image & Co. /