Portfolio sales made up 69% of the total volume. Retail portfolio sales led the activity, accounting for 71% of the total transaction volume, due in large part to publicly held KarstadtQuelle selling a 51% stake in its 174-property portfolio to Whitehall, a Goldman Sachs property fund, for 4.5 billion euros (US$5.4 billion). In second and third place in portfolio sales were office buildings, with 1.85 billion euros (over 18 %) and distribution centers, with around 197 million euros (2 %).

Retail properties also led the quarter in single-asset sales, with a transaction volume of 1.36 billion euros (44 %). The total invested in office buildings in Q1 was over 922 million euros (30%). Distribution centers--much more in favor with investors than in the equivalent period last year-- accounted for 197 million euros (6.4%).

In the top six German investment markets -- Berlin, Cologne, Dusseldorf, Frankfurt, Hamburg and Munich--sales activity totaled 2.75 billion euros, a 94% increased from the first quarter of 2005. Hamburg led the group with deals totaling 1.02 billion euros, up 135% from the comparable year-earlier period, due in large part to the sale of a large city-owned portfolio.

Munich came in a distant second, with first quarter deals totaling 549 million euros, but that total was a 966% percent increase from the same period one year earlier. Deals in Frankfurt totaled 431 million euros, a 24% increase from the first quarter of 2005, due largely to the sale of the Skyper high-rise building.

Berlin and Cologne also posted substantial increases in investment activity in the first quarter of 2006 relative to the first quarter of 2005. Berlin saw investment activity rise 354% to 355 million euros while Cologne saw activity rise 241% to 336 million euros.

Only Dusseldorf saw investment activity decline. The city saw just 55 million euros worth of investment activity, which is off 70% from the same period last year.

"The result achieved in the first three months confirms our forecast of a further increase in investment turnover this year", says Piotr Bienkowski, managing director of Atisreal Germany. "This upturn is due in no small way to the ongoing rise in portfolio business."

Instant Insights /

Commercial Property Investment Spikes in Germany

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