33
OFFICE PROPERTIES
OFFICE PROPERTIES IN INVESTMENT HUBS
Office properties performed well with a
market share of 47% due to large-volume
portfolio deals as well as the office land-
marks that changed hands. The retail seg-
ment lost momentum compared to 2015,
a year that was characterized by large-scale
shopping center and department store
portfolio deals, nevertheless holding on
to second place with a share of 18%. Hotel
and logistics assets achieved double-digit
market shares in the first three quarters,
mainly offering higher-yield investment
alternatives outside the key investment
hubs. Market activity in these segments
remained high in Q4 as well with market
shares of 10% and 9%, respectively.
A total of €24bn (or 45%) of transac-
tion volume can be attributed to locations
outside of the Big 7, and a total of €28.7bn
market with roughly €1.8bn. Ultimately,
all locations surveyed by far exceeded
their long-term averages, demonstrating
that the German market is in good shape.
Prime yields continued to drop in Q4.
Office prime yields decreased by 10 basis
points across almost all of the Big 7 lo-
cations, currently ranging from 4.50% in
Cologne to 3.30% in Munich.
FOREIGN CAPITAL IN GERMANY
The amount
of foreign capital increased considerably
from slightly less than one third at the
end of March to 40% (€20.9bn) at the end
of the year. However, previous year levels
of 50% could not be met. Investors from
the US (29% of foreign capital or €6.1bn),
France (18% or €3.7bn) and the UK (15%
or €3.2bn) once again comprised the larg-
est international buyer groups. Ger-
»
(or 55%) was invested in Germany‘s top
7 real estate hubs. Munich clearly led the
pack in 2016 with a transaction volume of
around €6.9bn, up 17% yoy and 6% over
the result from record year 2007. The city
was followed by Frankfurt, which posted a
transaction volume of €6.1bn, up 8% yoy.
Berlin, 2015‘s top location, was not able
to repeat its exceptional results, which in-
cluded the large Potsdamer Platz deal.The
German capital came in third, posting a
transaction volume of €4.9bn – neck-and-
neck with Hamburg. Similar to Munich,
Stuttgart saw a remarkable Q4, which ac-
counted for around half of the city‘s 2016
transaction volume. Stuttgart recorded its
strongest year ever at a transaction volume
just shy of €1.9bn. Transaction volume in
Düsseldorf amounted to around €2.2bn,
whereas Cologne remained the smallest
