The walkers on Neue Mainzer Strasse in Frankfurt, a stunning picture is currently In single-a tower crane, and the 55-Meter-long jib on the roof terrace in the 25. Floor of a high-rise building in the heart of the banking district of the city on the main is hoisted up and put it all together.
The delicate work with heavy equipment is the prelude to the comprehensive modernisation of the former Commerzbank Headquarters. A total of 340 million euros, the GEG German Estate Group, to transform the to 1997, as the Bank tower is used, the 108-Meter-high building into a modern office district, with 33,000 square meters of leasable area 30 on the upper floors of invested.
The shrunken financial institution is no longer the name of the donor. Instead, the new tower is simply called “Global Tower”.
Although the Work is expected to continue until late in the summer of 2020, has found that the JIT is already a buyer for the object: The Hamburg-based investment company Hansainvest Real Assets recently acquired 50 per cent of the shares in the Global Tower.
Soon, the prices could go back
When the project is finished, want to take on the Hanseatic League and the building completely for one of their special funds for professional investors. “We are convinced that Frankfurt will develop in the future,” says Nicholas Brinckmann, spokesman of the management Board of Hansa invest.
at the beginning of this week, all those multi-million dollar Deals and turned in Munich. Nearly 2100 exhibitors and around 45,000 participants from home and abroad met at the fair grounds of Europe’s biggest real estate trade fair Expo Real. And were once again in the best of moods.
Low interest rates and an economy still in favour of investors in office towers, shopping center and housing shopping complex highly lucrative project developers and portfolio holders, and more can rent.
“We could see this year, a transaction volume of more than 50 billion euros,” says Sabine Barthauer, a member of the Board of management of the commercial property financier Deutsche Hypo, Hanover. Other actors, such as the BNP Paribas Real Estate Holding, are even expecting a 60 billion Euro until the end of the year.
The prospects for a
It could temporarily be the last investment record. Because the world political uncertainty and a mixed economic Outlook could put an end to the almost ten years of a booming in fact, and soon. “The trade dispute with the United States, a high level of international debt after a decade of cheap money – all of it threatens to affect the economy negatively,” says Klaus Dittrich, Chairman & CEO of Messe München.
Eight years with the Boom in the German residential and commercial real estate markets has now lasted for. Triggered the monetary policy of the European Central Bank (ECB) has him. In order to support the real economy in Europe, and lowered them after the outbreak of the financial crisis in autumn 2008, the key interest rate to Zero percent, and has since then acquired for more than 2500 billion euros – a figure 13 – government and corporate bonds.
This immense demand caused yields on the debt notes so far to shrink, pension funds, foundations and insurance companies in the past few years, invested increasingly in concrete gold, to achieve sufficient income.
life insurers and pension funds under pressure
, Especially real estate properties are in demand in Germany. “The Federal Republic is the most stable country in the Eurozone,” says Jochen Schenk, Vice President of ZIA Central real estate Committee, the head Association of the German real estate industry, representing the interests of 37,000 industry professionals. The strong economy have made Germany one of the safest havens in Europe.
“at mid-year, Germany ranked with a real estate investment volume of 25.25 billion euros, according to the United States and great Britain in third place in an international comparison,” says Timo Tschammler, management Board chief of Germany during the international real estate Advisory company JLL.
“for 42 percent of investment capital comes from abroad,” says Matthias Leube, Chairman of the Board, Germany at the consulting company Colliers International. Among the largest international investors in Germany, buyers from the United States with a market share of nine percent, followed by buyers from the UK and Singapore, each with six percent.
The massive demand, the prices of residential and commercial real estate are significantly stronger than their Rent. Are mirror images, therefore, the rental income in Relation to the purchase price of returns are always more melted together. “The top return to the Top German office locations of Berlin, Düsseldorf, Frankfurt, Hamburg and Munich, has fallen in the last twelve months by a further 0.3 percentage points to 3.21 percent,” says Fabian Klein, head of the investment division at the international real estate service provider CBRE.
These returns do not satisfy the requirements of life insurers, the need to generate in their existing contracts yields of four percent or more for their customers. Similarly, many pension funds are under pressure to achieve more than four percent of income for their pensioners.
ECB could prepare the spell a the end of
But real estate, which yield sufficiently high returns, there is little yet on the German market. “The high demand, the yields in all sectors of the market in the past few years, dramatically shrinking,” says Thomas Beyerle, head researcher of the consulting company Catella. Whether office, retail, Hotel, logistics and residential real estate market everywhere will have to settle for a purchaser of a significantly lower income.
That the prices will rise even further and the yields are still shrinking more, no more many experts believe. “The price of development has reached, in most real estate segments its peak,” says Lutz Aengevelt, managing partner of the consulting firm Aengevelt Immobilien.
One reason: The ECB has their bond-buying driven programs are already significantly back and wants to adjust the end of the year. At the same time, the US Central Bank has raised its key interest rates since the end of 2015, eight times, most recently in the span of two to 2.25 per cent.
This mortgage have become loans in the Eurozone is already slightly more expensive. “Sale and prospective buyers are confused, therefore, increasingly on the price development in the next twelve months,” says Aengevelt.
Coworking is the new Trend
Therefore, more and more investors to venture into niche segments, such as Nursing homes and student residences, where yields of four percent or more. A survey conducted by the real estate service provider Engel & Völkers Investment Consulting (EVIC) property shows buyers.
“The lack of Product is driving investors in special-purpose properties, and new concepts of use,” says John Kamphorst, a member of the EVIC. Among the new segments also project developments such as the Global Tower in Frankfurt. In the past, investors are spared will have to enter at an early stage in such projects, because these are associated with risks.
Bad weather or unforeseen problems on the construction site can delay the project completion, and the costs explode. Therefore, modernization and new acquired projects, if the Work had been completed. Today, investors will flock to such projects. Due to your early start you will avoid the cost to the developer of high loan – what is this rewarded with a low price. On the other hand, investors achieve in the long term, a higher rate of return.
Not only investors at an early stage in project development. Also companies signed a new object is now set lease-outs already years before finished. The co-provider Spaces, dedicated office space, short term lease to individual companies or freelancers to, has rented in the Global Tower already 9170-square – 28 percent of the total area.
Just also affordable housing in the cities. However, this is not due to the fact that in the past few years, too little has been built. In 2013, the Federal Statistical office registered the finalization of 214.817 new homes. Last year it was 284.816, an increase of 32.6 percent.
luxury apartments only difficult to explain to
However, the project developers have drawn especially expensive apartments in the upscale and luxury segment in the height – many of which are no tenants, because they are too expensive. “Apartments in the upscale Segment, only 20 percent of the rental market”, says real estate expert Aengevelt. “Luxury apartments are even in demand only five percent of the tenants.”
Because project developers will find more and more often for its expensive luxury apartments, neither buyer, nor tenants, they begin to rely increasingly on the construction of affordable housing. “We see a change of Strategy on the market, including the construction of new, cheaper rental housing,” says Catella-chief researcher Beyerle. What are their production inhibits, the dramatic rise in land prices.
“The prices for serviced land have increased in the past few years, stronger than that of dwellings completed”, said Rainer Schorr, CEO of Berlin-based real estate asset management PRS Family Trust. The more and more project developers are driving from the metropolises in the bacon belt.
Alone in the Federal capital, 92 per cent of the property developer are looking for a survey of the PRS Family Trust currently to more favourable building land in the Outskirts of the metropolis. “67 percent – two out of three project developers are looking for even more in the neighboring regions of Brandenburg to the land,” says Schorr.