Following the extraordinary volumes witnessed in 2011, Jones Lang LaSalle (JLL) announced a decrease in retail real estate investment in the first quarter of 2012. investment in qatar
According to preliminary estimates, direct investment in retail real estate for the quarter would be in the range of €3.8 billion, a considerable fall from total volumes of €9.9 billion in Q1 2011 and €8.4 billion in Q4 2012. The quarter was marked by a paucity of significant deals, which boosted volumes in Q1 2011 (which had five transactions for more than €500 million, including the €1.8 billion Trafford Centre) and Q4 2011 (which saw the €824 million Galleria in St Petersburg sold).
Despite lower volumes across the board, the majority of activity is still concentrated in Germany and the United Kingdom. The major deal in the German market was Allianz's purchase of HSH Nordbank's remaining 45 percent ownership in Europa Passage in Hamburg for roughly €200 million. The purchase of Ocean Terminal in Edinburgh by Resolution from Forth Ports (assisted by Jones Lang La Salle) for €108 million was the largest shopping mall deal in the UK market.
JLL's European Retail Capital Markets Director, Shelley Matthews, tells World Property Channel, "A number of things are at work. To begin with, persistent economic challenges are reducing debt finance availability, particularly for new borrowing, which, when paired with tightening investor requirements, is constraining transactions. Second, the ongoing Eurozone crisis has slowed the transaction process in some regions, which, along with lower levels of deal origination in the second half of 2011, has resulted in fewer agreements reaching closure in Q1 2012. Due to more robust fundamentals and increased depth in the investment market, we expect volumes to go up in Q2 and for the rest of the year, particularly in Germany, Poland, and the Nordics."
The Eurozone debt crisis is boosting Germany's residential markets, with €6.1 billion in investment driven by a flight to safety in 2011.
According to new research from CBRE Germany, transaction volumes in German residential property portfolios with more than 50 units surged by 44% year over year in 2011, reaching €6.12 billion (USD $8 billion). In 194 transactions, the amount of traded residential units climbed by 27% to about 92,000 units, indicating that the market for big portfolios of over 1,000 units has regained traction.
In Berlin, there was a particularly high demand for residential units. Last year, the federal capital of Germany transacted around €2.3 billion and over 32,300 residential units, accounting for 37% of all registered investment volumes and 37% of all residential units in Germany. The average price per square meter in Berlin grew to €1,033 as a result of high transaction volumes and high-end development projects.
The impact of the European sovereign debt crisis on German housing stock, according to CBRE, is driving German and international institutional investors toward tangible assets and the country's stable residential market.
Head of Residential Investment at CBRE in Germany According to Konstantin Lüttger of World Property Channel, "At a time when the European sovereign debt market is in crisis and worldwide capital markets are turbulent, German residential is seen as a safe bet. As a result, the housing industry in the country has had a good year. Developers have benefited from robust demand for both individual sales and capital expenditures, not least since rents are rising in both major and prosperous medium-sized cities, as well as university towns where supply is limited. Last year's high trade volumes indicate the confidence of both domestic and international investors in the German residential market."
Listed property companies led the investment market, accounting for 32% of total volume. Private investors, in addition to closed-end investment vehicles, were quite active, accounting for more than 13% of the total. Open-ended (special) real estate funds (13 percent) and the public sector also made investments (10 percent ).
Domestic investors contributed €4.35 billion (more than 71% of total investment) to the total. They were followed by investors from the United States (5.7%), Sweden (4.2%), and Austria (4.2%). (3.4 per cent).