IREIT Global Group Pte. Ltd - Annual Report 2015 - page 36

While investor demand was focussed mainly on prime
VWRFN LQYHVWRUV DUH LQFUHDVLQJO\ RSHQ WR UHQWDO JURZWK
SURVSHFWV LQ QRQ FRUH ORFDWLRQV $V D UHVXOW LQYHVWRUV DUH
ZLOOLQJ WR FRQVLGHU VKRUWHU LQFRPH VWRFN $V GHPDQG LV VWLOO
well ahead of supply, prime yields are expected to remain
under downward pressure over the coming year.
YIELDS OFFICE PROPERTY SECTOR BY LOCATION
German Market Review
INVESTMENTS
7KH LQYHVWPHQW PDUNHW LQ *HUPDQ\ LQ ZDV H[WUHPHO\
buoyant with a 50.0% year on year increase in transaction
volume. Overall, yields have compressed in all top seven
locations. While all the top seven cities in Germany
experienced an increase in volume compared to the
previous year, the largest rise was recorded in Berlin.
&RPSDUHG WR WKH FLW\ȇV WUDQVDFWLRQ YROXPH GRXEOHG
to more than €3.8 billion.
2ɝFH SURSHUW\ UHPDLQV WKH PRVW VRXJKW DIWHU VHFWRU LQ WKH
*HUPDQ UHDO HVWDWH PDUNHW 3URSHUWLHV FKDQJHG KDQGV IRU D
total of almost €22.9 billion last year, representing a 28.0%
increase from the previous year.
General economic indicators and the situation on the
ȴQDQFLQJ PDUNHW FRQWLQXH WR KDYH D SRVLWLYH H΍HFW RQ WKH
*HUPDQ FRPPHUFLDO UHDO HVWDWH PDUNHW ΖQYHVWRUV VKRZHG
D FOHDU IRFXV RQ WKH WRS VHYHQ FLWLHV $OPRVW RI WKH
overall transaction volume in 2015, approximately €17.8
ELOOLRQ ZDV LQYHVWHG LQ WKHVH PDUNHWV 7KH KLJK PDUNHW
liquidity indicates the popularity of high-volume assets
DQG SDFNDJH GHDOV ZKLFK DUH VSXUULQJ PDUNHW DFWLYLW\
$SSUR[LPDWHO\ Ȝ ELOOLRQ ZDV LQYHVWHG LQ SDFNDJH GHDOV
LQ UHȵHFWLQJ D WRWDO WUDQVDFWLRQ YROXPH RI 2QH
of the highest-volume single deals in the year included
7LVKPDQ 6SH\HUȇV SXUFKDVH RI WKH 4 RIILFH UHWDLO PL[
building for around €330.0 million.
7KH LPSRUWDQFH RI WKH WRS PDUNHWV ZKLFK DFFRXQWHG
IRU DQ DOPRVW VKDUH RI WKH WRWDO PDUNHW DV ZHOO DV
LQFUHDVLQJ WUDQVDFWLRQ DFWLYLW\ LQ Ȇ%ȇ DQG Ȇ&ȇ ORFDWLRQV DUH
good indications of Germany’s excellent standing with both
*HUPDQ DQG IRUHLJQ LQYHVWRUV -XVW RYHU KDOI RI LQYHVWPHQW
LQ WKH *HUPDQ UHDO HVWDWH PDUNHW FDPH IURP LQWHUQDWLRQDO
LQYHVWRUV LQ ZLWK WKRVH IURP WKH 86$ )UDQFH DQG
WKH 8. IDYRXULQJ KLJK YROXPH GHDOV 0HDQZKLOH $VLDQ
investors contributed around €1.4 billion. While foreign
investment accounted for around 51.0% of the total in most
RI WKH WRS VHYHQ FLWLHV 0XQLFK DQG 6WXWWJDUW JDUQHUHG OHVV
foreign interest with foreign investment recorded at 43.0%
and 33.0% respectively.
2ɝFH EXLOGLQJV DQG KRWHO DVVHWV JDLQHG WKH PRVW LQYHVWRU
interest on the whole, especially as the structure of the
hotel business in Germany continues to expand in all
FODVVHV +LJK YROXPH VLQJOH DVVHW GHDOV LQFOXGHG WKH QLQH
ILJXUH 6RILWHO 0XQLFK %D\HUSRVW +RWHO %RWK RIILFH DQG
hotel asset classes well exceeded €2 billion in investment
turnover.
OUTLOOK 2016
Occupational and investment demand are forecast to
strengthen further in 2016 with increased demand for
space in second-tier locations. Demand will continue to
H[FHHG VXSSO\ DFURVV PRVW SULPH PDUNHWV ZLWK YDFDQF\
rates expected to see further moderate declines. Older
RɝFH EXLOGLQJV ZLOO FRQWLQXH WR EH XVHG DV UHIXJHH KRXVLQJ
which would lead to vacant space absorption.
Given the current stability of the German economy,
EXVLQHVVHV DUH RSWLPLVWLF DERXW WKH IXWXUH DQG DUH ORRNLQJ
forward to leasing new office space. Tenant demand is
expected to remain strong over the coming year, which
VKRXOG OHDG WR D VFDUFLW\ RI KLJK HQG RɝFH VSDFH LQ PDQ\
locations.
6RXUFH 6DYLOOV
8%
7%
6%
5%
4%
3%
2%
1%
0%
2007 2008 2009 2010 2011 2012 2013 2014 2015
6HFRQGDU\ QRQ &%'
3ULPH QRQ &%'
6HFRQGDU\ &%'
3ULPH &%'
Qualifying Note
7KLV *HUPDQ 0DUNHW 5HYLHZ LQFOXGHV PDUNHW LQIRUPDWLRQ DQG VWDWLVWLFDO GDWD REWDLQHG IURP LQGHSHQGHQW LQGXVWU\
SXEOLFDWLRQV DQG UHSRUWV LQFOXGLQJ WKRVH IURP WKH )HGHUDO 6WDWLVWLFDO 2ɝFH RI *HUPDQ\ 'HVWDWLV &ROOLHUV ΖQWHUQDWLRQDO
&XVKPDQ :DNHȴHOG DQG 6DYLOOV :RUOG 5HVHDUFK ZKLFK ZH EHOLHYH DUH UHOLDEOH VRXUFHV :H KDYH QRW LQGHSHQGHQWO\
YHULȴHG WKH GDWD QRU VRXJKW WKH FRQVHQW RI DQ\ RI WKHVH RUJDQLVDWLRQV WR UHIHU WR WKHLU UHSRUWV IRU WKLV *HUPDQ 0DUNHW
5HYLHZ :KLOH HYHU\ H΍RUW KDV EHHQ PDGH WR HQVXUH WKH LQIRUPDWLRQ VRXUFHG LV DFFXUDWHO\ UHSUHVHQWHG LQ WKH *HUPDQ
0DUNHW 5HYLHZ ZH FDQQRW DFFHSW DQ\ UHVSRQVLELOLW\ IRU DQ\ HUURUV RU RPLVVLRQV
34