Germany 2015

office market Investment continues to surge

retail market Time to face the new reality

logistics ProPerties The emerging trends

immobilienwirtschaft

2015

03

www.haufe.de/immobilien

the trends in all asset classes

Real Estate Investment Market

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imPetUs for insiders

3germany issue i editorial

Dear Readers,

we live in turbulent times: Political risks, such as from the crisis in Ukraine, ISIS terrorism as well as monetary policy of the European Central Bank and its impact on the development in the eurozone, are all moving the German market this year.The low interest rates in Germany continue to make real estate a lucrative commodity. Financing is affordable and safe investment alternatives are scarce. Last but not least, investment in insurance and mutual funds has come under massive pressure. Competition in the real estate investment market is intensifying. Colliers Interna-tional expects an investment volume in this country of between 35 and 40 billion euros. Due to the low and declinging yields in the core segment, investors are forced to accept growing risks. In key markets, yields were in part even worse than in 2007. However, experts see greater yield potential for commercial properties in B or C locations (pages 32-34). Hence, a sixth sense for opportunities and risks is what is needed this year.In our special, appearing for the fourth time in English, you will learn about the current situation in the German office, residential, retail and logistics markets, where experts see investment potential as well as possible risks (pages 14-15) and where the German real estate market – in all likelihood – is heading in the coming months.

I wish you an interesting read, more courage as well as a sixth sense.

Best regards,

Laura Henkel, editor of “immobilien-

wirtschaft”and editor responsible for haufe.de/immobilien

A Sixth Sense for Risk

4 germany issue i contents

ContentsEditorial 03

Opening RemarksDr. Barbara Hendricks, German Federal Minister for Environment, Nature Conservation, Construction and Nuclear Safety, on excellent market opportunities 06

Infographic Explaining Germany – Investment Opportunities in the Office Sector 08

German Real Estate Market An Upside to the German Real Estate Market? Explaining Germany means presenting a multitude of extraordinary facts that are characteristic of the country 10

MIPIM Awards 2015: Congratulations to this year’s german finalists 12

Overheated Markets? Germany: Still warm or getting too hot?Are Real Estate markets overheating? The debate on this issue has become increasingly heated. In fact a significant drop in yields has been observed in nearly all real estate segments. However, one must carefully differentiate according to region and asset class 14

Office Properties Investment in offices continues to surge 16

Retail Change in significance, strategies and challenges in the prime location. Large numbers of investors and property owners still consider the pre-2009 market with nostalgic romanticism. The realities of business in 2015 are different 20

Logistics Properties 2014 was a remarkably good year for the now well-established logistics real estate asset class in Germany. The outlook for 2015 also looks promising 24

Hotel Properties Record Year on the German Hotel Investment Market and – another record year in sight 26

Residential Properties Consolidation of housing companies: This is what is taking place in the field of mergers and acquisitions. Deutsche Annington is set to become Germany’s largest landlord 30

HOtEL PROPERtIEs In the first half of 2014, the top German cities all increased their performance in the hotel market compared to 2013 – but also the secondary cities like Dresden benefit from a big boom.

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sMALLER cItIEs The shortage of supply, relating to the core segment asset classes of retail trading and offices is leading major investment demand to con-centrate on smaller cities, says Michael Berger, Head of Real Estate Finance, Helaba

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German Property Market: statementsReal estate investors need to change their habits 32

Getting around cannes Flexibility is essential at a trade fair. The most important information on taxis, helicopters & Co. 36

German Exhibitors 38

Puzzle/Legal notice Germany and abroad 42

OffIcE PROPERtIEs In 2015, the prospects for the office investment markets remain good. The ECB anticipates that interest rates will stay very low for some considerable time, the financing environment is favourable, the outlook for overall economic growth is now brightening, and the labour market is maintaining its stability.

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6 germany issue i Opening RemaRks

Dear Readers,

Property markets in Germany are currently enjoying growing popularity. Conurbations and university cities and towns in particular are showing dynamic development and high growth rates. Germany is becoming an increasingly attractive market for international investors as well. For the German government it is important to support this development with a view to benefiting society, while at the same time securing quality, climate resilience and, above all, affordability. Demand is particularly high in the mid to low price range, and it is in this range that we need more new build in popular locations. I am delighted that Germany is again strongly represented at this year‘s MIPIM and wish all visitors and exhibitors a successful event.

Sincerely,

Growing Popularity

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Dr. Barbara Hendricks MdBFederal Minister for the Environment,

Nature Conservation, Construction and Nuclear Safety

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www.muenchenerhyp.com

Attractive termsBespoke solutionsQuick decisions

Your partner for commercial real estate finance.International. Reliable. Long-term.

Volksbanken Raiffeisenbankencooperative financial network

8 germany issue i infographic

Explaining Germany means presenting facts that are characteristic of the country, compared to the rest of Europe (Read also page 10):› There is neither a dominant investment center nor a strong cyclical movement in the German markets.

› Each city of the Big 7 – Berlin, Hamburg, Dusseldorf, Frankfurt, Cologne, Stuttgart and Munich – has its own economic structure, and this results in individual market profi les.

› The offi ce rents in the CBD’s in total show for the next two years an increasing scenario, while vacancy rates will decline.

› Berlin as the German capital offers a huge demand for new offi ce space, while the other markets try to fi nd a way of how to deal with the stock of the early Nineties.

› Don’t forget the other 15 2nd tier cities – labeled as “B-Locations” and, of course, the 54 3rd tier cities.

› Each of them shows interesting investment opportunities for the next quarters, never – theless keep an eye on the exit in a phase of decline and look at the risk premium these days.

Explaining Germany – Investment Opportunities in the Office Sector

City type Big 7 Regional Centers

GDP per capita per federal state

Well above average Above average Average Below average Well below average

German average GDP per capita: 33,355 EUR

Source: Statistical Office of Baden-Württemberg 2014

Dusseldorf

Fashionable, chic and dynamic: A lack of big deals in 2014 caused a decrease of take-up in the office market. Take-up in 2014 was the worst result since 2009. Nevertheless, ongoing demand remained positive due to small leasing units.

Dortmund

High dynamics of development and slight volatility enforce supraregional demand of institutional investors. Office vacancy rate increased slightly to 6%.

Bonn

From the German capital to No.1 at 2nd tier locations: Due to large enterprises, international organizations and the university there is an ongoing high demand for office space. Forecast additional demand of office space adds up to 360,000 sqm until 2030.

Bremen

Development of new office space has remained static for many years and causes price growth. This is why Bremen will be in the focus of institutional and international investors.

Cologne

Although Cologne is the biggest city in North Rhine-Westphalia, its office market equals that of Dusseldorf or Stuttgart. The demand for office space has been relatively stable in the last years and and slight rent increase is expected.

Essen

A steadily increasing number of office jobs causes consistent surplus demand despite high rate of construction. In Es-sen there is a containable risk and rising prices are expected.

Hanover

With 4.9 million sqm of office space, Hanover’s office market is relatively big for a secondary city. The low vacancy rate and moderate rents reflect the popularity of the city.

Stuttgart

DNA: stability. The vacancy rate is still at a low level. The Stuttgart office market is the most stable of Germany’s Big 7 locations. Stuttgart recor-ded the highest prime yield increase of all European office locations.

Mannheim

On the way to become a service cluster: Despite a continuously growing number of employees, office space has barely increased during the last six years.

Mainz

Small office market with stagnating average rents. The mixed-use urban restructuring project “Zollhafen” will provide prime office space for 4,000 people in the next decade.

Wiesbaden

The high demand for modern prime office space can’t be satisfied by supply. During the last years the vacancy rate has continuously dropped.

Bremen

Hanover

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Bonn

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Berlin

Capital and tourist spot. Insufficient supply of office space in the city center is the reason for rising prices. Never theless, take-up volume in the office segment concluded at a record level at the end of 2014.

Dresden

The capital of the federal state of Saxony, Dresden is a growing city with a good return potential at a simultaneous slight risk. In all asset classes in the city center there is a surplus demand with rising prices.

Frankfurt

Financial center: Significant increase of investment volume. Total commercial investment volume was above 5 bn EUR. Office remains most popular segment with a volume of approx. 4 bn EUR.

Hamburg

Maritime trading spot. Transaction volume has risen in 2014 and produced the best result since 2007. Due to the high demand for office properties, falling vacancy rates and prime yields are expected until 2016.

Rostock

Office stock is nearly 1 mn sqm with a relatively low vacancy rate (although quite intransparent).

Leipzig

Most dynamic city in East-Germany, classified as “undervalued”. Reverse vacancy development: Ongoing reduction in the city center and increasing vacancy in the outer city.

Magdeburg

Office stock is about 1.4 mn sqm with a low demand for office properties. Increasing dynamics in this segment is expected.

Munich

Modern and historic at once: Munich is the fastest growing German metropolis, and has – apart from Berlin – the second largest office market. Munich has registered rising rents for the last seven years, due to the strong demand.

Nuremberg

The office market of Bavaria’s second largest city shows a stable development. Vacancy rates are predicted to continue to decrease.

Erfurt

Heart of the Biotech-IT corridor in Thuringia. The Erfurt office market has the highest vacancy rate of eastern German cities (17%). Prime rents are approximately on the level of Dresden and Leipzig.

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BIG 7: Office transaction volume 2014 (in mnEUR)

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10 germany issue i Real estate MaRket

vides numerous opportunities – as well as risks. So it is clear that in A locations the traditional “5% interest on real estate” will surely have a tendency toward “4” – this is the price of the attractiveness of German commercial properties in CBD locations. This trend in rising purchase prices can surely be expected in the coming quarters also for several attractive B locations such as Freiburg, Hanover, Leipzig, Dresden, Bonn or Nuremberg. Although the level there will rather move from 5.75% to 5.0%. What must be considered here, however: The traditional differences between the A and B locations are in the proportion of capital invested to the risk involved, in a yield corridor of approximately 150 basis points. It is likely that some of these B lo-cations will become the focus of foreign investors in commercial real estate – this investment opportunity is currently too attractive as is the exit in a few years.

He’s back, tHe strictly urban dweller! Currently, the classic German investor usually buys a condo in the city, builds a house or – in the stock segment – invests in improving energy efficiency.

This massive investment flow, which is also driven further by foreign investors, is being felt in the local economy and is creating growth. But at the same time this process is being overlapped and perhaps even driven by a slow and steady change in the map of Germany: The concept of re-urbanization is a precise description of what is going on in the cities. With the very dynamic component that it is not only cool again to live in a city, but also to work and

The argument hardest to beat becomes what this new era brought on by the ECB has meant to investors, the sec-

tor and the European economy as a whole: on one hand, an enormous sum of invest-ment capital and, on the other, the diffi-cult question of in which asset to invest with “interest rates virtually at zero.” And then, of course, the view from outside – undervaluation and stability are the two characteristics that foreign investors are all too glad to attribute to the German real estate markets. There it is again, that “up-side” potential in and for the German real estate markets.

tHe Map of GerMany Of course, such generalizations cannot be made about investments in this country where both the structure of its economy (“the Ger-man Mittelstand”) as well as its geogra-phy are so different in both size as well as investment compared to Europe’s largest centers, the UK with London and France with Paris.

The majority thinks of Frankfurt, but the list also includes Munich, much better known around the world with its affinity for laptops, cars, soccer and lederhosen. Or Hamburg – the “German gateway to the world” through its maritime suprem-acy and logistics cluster of the local cor-porate structure. Of course, Düsseldorf, Cologne and Stuttgart must also be men-tioned.

Last but not least – and this is often when it should be considered: What about the capital city? Berlin. Yet it still doesn’t really fit in the search profile of many in-

An Upside to the German Real Estate Market? A look at the map (page 8): You will not get an answer by considering just the German market as a whole, but by looking at all of the markets. The picture gets even rosier if you also take into account the aspect of stability and the outlook for the German economy.

vestors. And if this is not enough alterna-tives for investors, this is joined by roughly 60 so-called B locations, i.e. locations with at least 75,000 inhabitants. Perhaps this is the secret behind German stability. No dominant center with its eternal cyclical ups and downs.

Yet this polycentric structure has un-dergone a change in the last few years. Sev-eral B locations are falling behind, Berlin, on the other hand, has a magnetic attrac-tion for some. For investors this is particu-larly interesting especially since this pro-

“Perhaps this is the secret behind German stability: No dominant center with its eternal cyclical ups and downs.”Dr. Thomas Beyerle, Catella

11Real estate MaRket

consume there at the same time. A long-gone social type – the strictly urban dwell-er – is (again) a visible and sought-after group. And their impact on the market can be measured in the enormous level of renovations which is usually reflected in rising rents and purchase prices – an almost textbook development in scarcity conditions.

tHird pillar of tHe traditional real estate structure: inner-city retail Ostensibly threatened by that sword of Damocles, online retail, several million in investment capital is flowing into this segment. New, sometimes fascinating re-tail formats are emerging. International investors, such as Primark, or new brands, such as Uniqulo, are the spearhead. And with that a common component of the res-idential, office and retail markets in Ger-

man cities is emerging: Many want to be right there, investing and developing new concepts and are competing above all for one thing: space. And that is becoming in-creasingly scarce – structurally speaking.

Yet this is a predictable development that even investors can expect and which is to be handled responsibly. What will be much more important, and this will be the future as well as the responsibility of business, politics and ultimately the cit-izens: urban redevelopment. And brains are needed here – at the very least an off-handed way to describe the mutually desired requirement of a “smart city.”

tHe future lies witH tHe sMart city In-telligent urban redevelopment would be a more appropriate term for what everyone involved should expect in the next 20 years. Monolithic structures are not wanted.

Gone will be the time when bank towers could only be entered by bankers, shop-ping centers were viewed critically as a monoblock in the city center and resi-dential towers were attacked as a visible expression of the upper class. The breaking up of existing urban structures and sub-sequently doing things “differently and better” is the current motto with which to meet the current wave of urbanization. The good, old marketplace is again assum-ing its original role of central place of ur-ban life, only now it will mean a “healthy place” or “happy place” in the language and identification of the urban population as well as in the assessment of domestic and foreign investors. This is where the massive upside potential in the German real estate markets is expressed. «

Dr. Thomas Beyerle, Catella

12 germany issue i MipiM AwArds 2015

Mipim announces the 40 finalists for the 2015 mipim Awards, selected by a jury of inter-national real estate professionals. The 2015

Awards finalists represent a record of 22 countries. The Dreischeibenhaus in Düsseldorf and the project Eckwerk in Berlin are among the German nomina-tions this year.

Canada, Australia, Saudi Arabia, Argentina, in-donesia and Senegal are potential medal winners for the first time. France and the United Kingdom both have four projects competing, while Asia (China, Ja-pan, indonesia and Hong Kong) has eight projects and the Nordic countries (Denmark, Finland, Norway and Sweden) have seven. This year’s mipim Awards include a new category, “Best Futura mega project” which rewards upcoming real estate projects over 100,000 m². in addition, the jury selected five projects for the “Special Jury Award” and will announce its favourite project during the awards ceremony, along with the winners of the other categories.

mipim Awards winners will be chosen in Cannes by a combination of the mipim delegates and the in-ternational jury, each group representing 50% of the final vote. The result will be announced at a gala cer-emony held in the main auditorium of the palais des Festivals in Cannes, on Thursday, 12 march at 7pm and will be open to all mipim participants.

The shortlist can be viewed online:

Congratulations to This Year’s German FinalistsTwo German projects nominated for MIPIM Award 2015: The Dreischeibenhaus in Dusseldorf is nominated in the category “best refurbished building”, the Berlin Eckwerk is named in the category “future projects”.

BEST REFURBISHED BUILDING: DREIScHEIBENHaUS Düsseldorf, DeutschlandInvestor/Developer: MOMENI GroupDeveloper: MOMENI Projekt- entwicklung GmbH Architect: HPP Hentrich – Petschnigg & Partner GmbH + Co. KGOther: Black Horse Investments GmbH (Joint-Venture Partner)

MIPIM AwArDs 2015THE GErMAN fINAlIsTs:

BEST FUTURa PROJEcT: EckwERk BERLIN Berlin, Germany Architect: Kleihues + Kleihues Gesellschaft von Architekten mbH/Graft Gesellschaft von Architekten mbHDeveloper: Genossenschaft für urbane Kreativität (cooperative for urban creativity)Other: Kaden + Partner, sbp GmbH, Winter beratende Ingenieure für Gebäudetechnik GmbH, HHP Berlin

Key TOPIcs fOr 2015 The MIPIM conference program will address some of the key developments in the digital domain with respect to the real estate industry. »The Digital revolution » Investment rules & challenges » Mature and emerging markets » core and alternative asset classes » smart cities & urban development

14 germany issue i Markets overheated?

The chart shows: Compared to 2012 the housing markets in practically every community in Germany have become a category “hotter.”

Source: Wüest & Partner Deutschland

“Fever” map 2012

The strong interest of domestic and foreign investors in German proper-ties has generated high transaction

volumes over the last two years in almost all asset classes. The focus of even private investors is increasingly on residential properties because the historically low level of interest rates is prompting them to seek safe havens and is making real estate financing affordable. Compared to the rest of Europe, the German economy is relatively robust, which has also stimu-lated demand and rents in the commercial property market. In fact a significant drop in yields has been observed in nearly all segments. When considering a potential overheating of the market, one must care-fully differentiate according to region and asset class.

Housing Market To assess the situation in the residential property market, a com-parison of the current situation with the market situation two years ago is reveal-ing. While the majority of the German housing market in 2012 was still “cold” and a warming could only be observed in a few regions – such as the Munich area or Sylt – the situation has now changed considerably. Housing markets in prac-tically every community in Germany have become a category “hotter.” What is particularly striking is that areas in the already “warm” or even “hot” metropoli-tan regions are beginning to spill over into the surrounding areas. This includes, for example, the greater Hamburg and Berlin

Germany’s Real Estate Markets – Still Warm or Getting Too Hot?Are real estate markets overheating? The debate on this issue has become increasingly heated. In fact a significant drop in yields has been observed in nearly all real estate segments.However, one must carefully differentiate according to region and asset class.

areas, which were primarily in the “cold” category years ago and are now spilling over into a large radius of up to 50 kilo-meters around each of the respective large cities. Munich, Sylt and, for example, the Kreuth and Rottach-Egern communities in Bavaria can be considered extremely “hot.” Moreover, not only cities in the top 7, e. g. Hamburg, Frankfurt and Berlin, can now be described as “warm” real estate markets but also cities such as Rostock, Bremen, Hannover and Freiburg.

office ProPerty Market German office properties are marked by very different trends than in the housing market. Al-though population growth in certain lo-cations plays a role in demand for office space, factors here, such as development in the number of employed and especial-ly office workers, the structure of specific sectors in the location, the level of office space vacancy and the new construction pipeline as well as prevailing rents, are all having a far greater impact. In a recent study, Wüest & Partner Deutschland ex-amined the investment risks for office properties in 50 selected cities with more than 100,000 inhabitants as well as the top 7 locations Berlin, Düsseldorf, Frankfurt am Main, Hamburg, Cologne, Munich and Stuttgart.

It revealed that an above-average number of office locations with higher risks are located in eastern Germany, where an oversupply of office space still remained after the reunification eupho-

15Markets overheated?

interesting office real estate markets and the best among the top 7 B cities.

It can be noted that, especially in the top cities, offices are expensive and yields in many areas have already returned to pre-crisis levels. Apart from the usual of-fice risks (re-letting with the correspond-ing vacancy and incentives) and unlike in Switzerland, for example, where rents are falling and vacancy rates are rising even for very good properties, there are (still) no signs of overheating because peak yields are actually being achieved almost exclusively from core properties.

retail ProPerties While efficient utili-zation of available space is at the forefront of many German office property markets, German retailers appear to be in the mood to expand and want to extend their net-work of branches. However, even concepts from abroad, such as Primark, Maisons

du Monde and Uniqlo, are warming up to German metropolitan cities and are looking for suitable locations. A number of international brands want to establish themselves in German cities, whereby rents – at least in top locations – are in-creasingly decoupled from turnover.

Even when sales in stores are stagnating or even declining, rents for retail space in prime locations are rising. However, lease terms are getting shorter: While ten-year leases were the norm several years ago, to-day retailers are often only willing to com-mit to five years. Brands that previously sold their products only on the Internet are increasingly taking the opportunity to raise the level of awareness through pop-up stores. This shows that online retail is actually a two-way street and is opening up opportunities. The shopping center as a place to meet, to experience and to communicate on a personal level is greatly appreciated.

In addition to high street properties, shopping centers remain a very popular asset class – even for international inves-tors. Because of their location and the shopping experience, these properties are assumed to have a high level of stability despite increasing e-commerce. Hence, it is expected that quality properties and downtown commercial buildings will be coming on the market in 2015 as well – fuelled by the bank stress-test of the Eu-ropean Central Bank and monetary policy of the central bank. Properties – and espe-cially core properties – are nevertheless in very short supply.

Due to the lack of properties and the pressure on yields driven by strong de-mand, investors are increasingly turning their attention to other property types – especially specialty shopping centers. Specialty shopping centers are being sold even outside of the popular A and B cit-ies as long as the underlying data, such as purchase power, centrality of a location, as well as the remaining term of the leases and the mix of tenants, is good. Never-theless, significant yield pressure is already being observed here.

ria waned. Dresden, Potsdam and Leipzig only have a medium level of risk, while investing in Cottbus office properties is considered very risky given the high level of vacancy.

Overall, the top 7 cities as well as the seven largest office markets in B locations did extremely well with low to medium investment risk (between 1.5 and 2.7 on a scale of 1 = very low risk to 5 = very high risk). When investing in office properties in Hamburg, Berlin or Bonn, investors are likely to remain relatively calm since they have the best balance of risk and re-turn. Düsseldorf, Essen and Bremen have a risk-return ratio similar to Frankfurt am Main – but this stems from entirely different parameters: Investment risk is significantly higher in the B cities Essen and Bremen than it is in Frankfurt and Düsseldorf. When looking at the top 14 office markets, Dresden is one of the most

“Fever” map 2014

hotwarmmediumcoldvery cold

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Karsten Jungk, Managing Director of Wüest & Partner Deutschland and Sven Graven, Managing Director of Wüest & Partner Deutschland

16 germany issue i Office PrOPerties

ment in absolute terms. With a combined total of 12.66 bn € they stepped up their prior-year turnover by close to 24%. Well out in front was Frankfurt, with slightly more than 3.69 bn €; that was 44% up on the prior-year figure and fuelled by the sale of a whole series of large assets. In second place in the ranking came the prior-year leader, Munich, with close to 3 bn € and a modest year-on-year rise of 3%. The sharpest increases, though, were posted in Hamburg, +54% to just under 2.24 bn €, and Cologne, +59% to 720 m €. Somewhat more modest growth was noted in Berlin (+6%) and Düsseldorf (+5%), but both of these cities recorded substantial turnover figures, with 1.72 bn € and almost 1.3 bn € respectively.

In terms of relative growth, the oth-er locations in Germany actually per-formed even better. Taking only single deals into consideration, the cities out-side the Big Six together generated over 42% more than the year before, pro- ducing an aggregate volume of over 2.52 bn €. In percentage terms, it was in cities with between 100,000 and 250,000 inhabitants that turnover totals increased most significantly: these accounted for a combined investment volume of about 536 m € (+55%). In cities of over 250,000 (outside the Big Six), the aggregate transaction volume rose by over 39% to about 1.59 bn €. But even towns with populations below 100,000 contribut-ed almost 400 m € to the overall result, thus stepping up their volume by nearly 38%. This general upward trend is a clear indication that buyers are increasingly prepared to acquire assets outside the really top locations as well. One reason is the limited supply of appropriate prod-ucts in the metropolises, another is that prices there have climbed considerably, prompting many investors to opt for smaller places offering more favourable terms.

Investment in office properties in 2014 was exceptionally buoyant. It totalled 16.99 bn €, which not only exceeded

the already very good prior-year figure by more than a quarter but was also the third-best result ever registered. It bettered the ten-year average – which includes the boom years of 2006 and 2007 – by the handsome margin of 34.5%. This shows quite clearly that for domestic and foreign investors, office buildings continue to rep-resent one of the most favoured asset class-es. In fact, nationwide they headed the as-set-class ranking, accounting for 42% of all the capital deployed in commercial real estate. Among the key factors which have prompted the surge are the historically favourable interest rates, much-improved financing conditions and the generally sta-ble German economy. Single deals together generated about 13.24 bn €, equivalent to Ph

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78% of total investment, and thus stepped up their relative performance by 21% com-pared with the year before. Turnover was boosted especially by large-volume deals in the triple-digit million range, such as the sales of the Silberturm (Silver Tower) and the Winx in Frankfurt, the Theresie and the Allianz headquarters in Munich, the “Dancing Towers” in Hamburg and the Hackesches Quartier in Berlin.

Positive develoPment in all tyPes of cities It was not just the major metropolis-es which were in favour. The very dynamic development of office investment also led to considerably higher transaction vol-umes in many medium-sized and smaller municipalities. All the same, it was the Big Six locations – Berlin, Cologne, Düssel-dorf, Frankfurt, Hamburg and Munich – which attracted by far the most invest-

The sharp drop in euro ex-change makes investments in offices, particularly for foreign investors, continue to be very attractive.

»

Investment in Offices Continues to SurgeOffice properties in Germany continue to be a preferred asset class for investors and are 42% of total sales nationwide at the top of all types of use.

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18 germany issue i Office PrOPerties

excePtional exPansion of Portfolio transactions Portfolio business was particularly lively and it expanded con-siderably more strongly than single deals. It actually climbed year-on-year by a hand-some 44% to produce a transaction volume of just over 3.74 bn €; that was the best result of the past seven years. This upturn is due to the fact that many investors are now exhibiting greater risk-readiness and extending their activities outside the core segment. One result is that packages which no buyer would have touched just two or three years ago are now finding a mar-ket. Part of the background to this is the ready availability of cheap money, which has been encouraging an increasing num-ber of investors to be on the lookout for large-volume opportunities. Accordingly, some 93% of the aggregate turnover in this field comprised sales in the three-figure million euro range; one outstanding exam-ple was the sale of the so-called Leo I port-folio to Patrizia for about 1 bn €. Evidence that there is now a greater appetite for risk is provided by an evaluation of the individ-ual deals. This shows that about two-thirds of all investment was effected outside the

the financing environment is favourable, the outlook for overall economic growth is now brightening, and the labour market is maintaining its stability – and together these factors create an extremely attrac-tive framework for investing in real estate. Where investors from abroad are con-cerned, the marked rise in the dollar ex-change rate could well provide additional stimulus. Then there are two other factors which will have a positive impact. One is that several large deals in preparation in 2014 still have to be concluded, suggest-ing that the first quarter of 2015 may well generate a particularly good transaction volume. The other factor is the growing demand for portfolios; this could lead to the marketing of an increasing number of core-plus and value-add packages. Taking all these parameters into account, the to-tal invested in office assets in this coming year should be at least on a par with the figure posted in 2014, and there is a realistic chance that the transaction volume may go even higher. «

Wolfgang Schneider, Head of Research, BNP Paribas Real Estate

core segment and involved value-add or core-plus products.

further fall in yields The buoyant de-mand coupled with limited supply, espe-cially in the core segment, led to a further decline in office property yields in all the major locations, with a particularly dynam-ic development in Berlin. This phenomenon was boosted by the historically low level of interest rates and improved financing terms, with falling margins. Conditions of this kind enable investors to achieve great-er leverage effects, and this impacts posi-tively on the yields obtained for the equity capital they deploy. Among the Big Six, Munich remains the most expensive loca-tion, with a net initial yield of 4.25%. Then come Hamburg (4.40%), Berlin (4.45%) and Frankfurt (4.50%). As before, slightly more favourable prices are posted in Düsseldorf (4.70%) and Cologne (4.80%).

forecast: the strong demand is set to continue In 2015, the prospects for the of-fice investment markets remain very good. The ECB anticipates that interest rates will stay very low for some considerable time,

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mBerlin Düsseldorf Frankfurt Hamburg Cologne Munich

2005 5.35% 5.35% 5.05% 5.55% 5.65% 4.95%

2006 4.75% 5.05% 4.85% 5.15% 5.50% 4.75%

2007 4.55% 4.75% 4.55% 4.55% 5.05% 4.45%

2008 5.30% 5.30% 5.15% 5.10% 5.40% 5.00%

2009 5.40% 5.40% 5.20% 5.10% 5.50% 5.10%

2010 5.10% 5.20% 4.90% 4.85% 5.30% 4.85%

2011 4.95% 5.00% 4.90% 4.80% 5.30% 4.75%

2012 4.80% 4.90% 4.75% 4.70% 5.20% 4.60%

2013 4.70% 4.75% 4.65% 4.65% 4.85% 4.40%

2014 4.45% 4.70% 4.50% 4.40% 4.80% 4.25%

YielDs in THe Big six

Source: BNP Paribas Real Estate Holding GmbH

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centres come once again more intense-ly into the focus of investors. A capital contribution appears to be less risky here where supposed safe investments and high returns attract, than in German medium or small-sized cities.

The days of “wide before deep” are numbered - in terms of spatial expansion as well as basic conception. The future? Single label. The trend towards shopping centres seems finally to be a thing of the

The strengthened international compe-tition of recent years has led to a fight to displace on the German market

which is becoming ever more intensive – it is high time to take off the rose-tinted glasses and face the new reality.

While a large part of the classic retail industry is still wracking its brains over integrating new media and distribution channels into their master plan, new con-cepts are already being steadily carried into

... Nothing New in the West?Change in significance, strategies and challenges in the prime location. 2015 lies before us, but large numbers of investors and property owners still consider the pre-2009 market with nostalgic romanticism. The realities of business in 2015 are different.

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the German retail landscape. International chain stores such as Reserved and Forever 21 are opening flagship stores in select-ed city centres according to an ingenious growth plan. Of late, the well thought-out expansion, completed from large to small, that is from major to medium-sized city, appears to have put paid to the storm and stress period on the market. In times of perceived crises, cities of over one million inhabitants and (West German) regional

20 germany issue i RETail PRoPERTiEs

21Retail PRoPeRties

The fight for the prime assets of city cen-tres, or of prime locations in general, is hard. In addition to the finite supply, in-vestors are also often faced with clearly ex-cessive price expectations from the seller. Nevertheless, there is little willingness to lower one’s sights, especially where loca-tion is concerned: According to current surveys, nearly 53% of all investors are not prepared to operate in secondary locations; 33% will even categorically re-fuse a position outside the prime location, according to the LÜHRMANN Trendba-rometer Retail 2015

InexpensIve BuIldIng CapItal – expen-sIve Key Money Inevitably, with the deter-mination to show presence in the selected prime locations of German city centres comes an increased readiness to pay un-precedented levels of key money, thereby also increasing the financial expecta-

past; the days of the department store numbered. Only some fifty percent of all industry experts still see sustained po-tential here – exceptions seem to be just those shopping centres located in areas of national significance. For the time being, the future belongs to strong individual brand strategies – and consequently also city centre locations.

the prIMe loCatIon: endless expanses or sCarCe CoMModIty? The German city centre is, for the most part, the historical centre of economic and political develop-ment. In other words, the city centre lo-cation can still decide on the success and reputation of a trading company today as it did already centuries ago.

But while the small towns grew into large and major cities, tight limits had already been set for the growth of their centres early on.

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The P7 is one of the most popular shopping-centers – although in the German secondary city Mannheim

The multi-brand center MyZeil in Frankfurt opened in spring 2009 and was recognized for its unique architecture and urban design qualities »

22 germany issue i Retail PRoPeRties

tions of the property owner. To the secu-rity-orientated investor, an investment in real estate, especially retail real estate, as a sensible investment that promises a return appears to be something that other classic types of investment cannot compete with in terms of the medium to long term.

The European interest rate policy more specifically: The historically low in-terest rate allows the easy procurement of inexpensive building capital. The financ-ing of real estate and development projects has never been as cheap as it is today. Price magnitudes and expectations are growing in proportion to the availability of capital. Although not yet common practice by a long way, transactions of over twentyfold the yearly gross rent that were in the past thought of as inconceivably excessive and dismissible meanwhile only cause mild astonishment among experts.

At €52.7 billion, the transaction volume for 2014 was for the first time once again above the pre-crises level of €50 billion. According to the latest expert opinions, a pass of the €60 billion mark has not been ruled out for the current year. An end to the price development is therefore for the time being not in sight.

BasIC requIreMents: expertIse and CoMpetenCe A market that is being in-flated by such groundbreaking sums of investment capital while also at the same time experiencing growing external pres-sure is unforgiving. Insufficient knowledge of one’s own estate and its value and condi-tion from the position of appropriate pric-es and failed diversification of investments provides for disappointment or even a rude awakening.

The post-2009 newly orientated indus-try is more professionalised and has higher standards. It has grown through the crisis and has successfully risen to new strategic challenges. It has not simply been about the brokerage of potential locations for a long time, but rather the procurement of individual, tailor-made real estate con-cepts that must meet the growing demands of international brand strategies.

This snapshot of a changed market underlines the demands on the industry. Expert competence and instinctive under-standing are more in demand than ever before in order to ensure sustained success and prospects.

Retail real estate in prime locations continues to be of great significance. Its unparalleled attraction has even been strengthened further by the changing economic developments of the past 24 months. Despite the ever-shrinking re-turns from other classes of investment, retail real estate in prime locations ap-pears to be a “sure shot” investment to the well-funded investor due to its finite availability.

A fact which not only promises a fur-ther upward movement in rent and key money sums, but also leaves no space for entrepreneurial mediocrity. «

Achim Weitkamp, Managing Partner LÜHRMANN Deutschland Fo

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33%of all investors will even categor-ically refuse a position outside the prime location, nearly 53% of them are not prepared to operate in secondary locations, according to the LÜHRMANN Trendbarometer Retail 2015

“The prime location is unique and cannot be reprodu-ced. A strategic presence here will decide the course of further market expansion early on. That makes expert knowledge and competence more than ever before the basis for sustainable success on both sides.”achim Weitkamp, Managing Partner lÜHRMaNN Deutschland

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24 germany issue i Logistics ProPerties

› Cluster: Whereas until recently the lo-cation of a logistics property was para-mount when it came to what amounted to an oversimplification of its desirabili-ty – “within easy reach of the five major metropolitan regions = good, not within these areas = not a suitable investment” – investors are now becoming more dis-cerning and seeing the bigger picture. On the one hand they are now looking at lo-cations such as Leipzig that have become more attractive in recent years as new industries have settled in the region. On the other hand they are more prepared to listen to valid logistics arguments, e.g. in the case of the new deep water port JadeWeserPort Wilhelmshaven. Howev-er, the most important point appears to be the heightened awareness that outside the relatively narrow radius of the big

However, it should be noted that the data that is currently available on this market does not accurately dis-

tinguish between logistics real estate and other industrial and commercial real es-tate. Furthermore, within the logistics asset class it is still difficult to differenti-ate between the standard of quality of the properties.

It is particularly institutional investors who are focussing on this key sector with its turnover of €225 billion in Germany and a total turnover of €1,750 billion.

With a transaction volume of approx. €3 billion a new all-time high was reached in 2014. A special feature of the market was the comparatively large number of portfolio deals, which at 45% were nearly double the previous years’ figure. These transactions often involved portfolio pre-miums. This situation can be explained by the fact that, despite the large amounts of money that continue to flow into the Ger-man market, quality logistics real estate has become scarce although at the same time with a return on investment of 6-9 % it is still an extremely attractive investment as compared to other asset classes.

A limited number of new logistics properties have been developed by own-er-occupiers taking advantage of this window of opportunity. Overall there has been a reduction in the number of new developments, approx. 30% fewer than in 2013, falling to below 400,000 m².

This market situation is being driv-en by the continued strong demand for

The Logistics Real Estate Market in Germany2014 was a remarkably good year for the now well-established logistics real estate asset class in Germany. The outlook for 2015 also looks promising.

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modern rental logistics space. In certain regions, such as Munich, demand is up 30% higher than last year. However, in some areas of the country the fact that the authorities are hesitant to designate sites for the development of logistics real estate makes the situation less favourable – for instance in the Hamburg area approx. 10% fewer new tenancies were taken over due to the shortage of available logistics space.

What trends are likely to emerge in 2015? Now that investors have a broad-er understanding of the asset class it will be easier to develop and deliver attractive products.› Conversion: Due to the fact that not

enough land is being put up for devel-opment on greenfield sites, investors are now taking a closer look at the possibili-ty of converting brownfield sites - some-thing they had often rejected in the past. In Germany these brownfield sites were originally used by mining, steel, chem-ical and, in some places, automotive companies that have since fallen into a decline. The majority of these sites are in metropolitan regions and often contam-inated by hazardous waste or pollution. However, when politicians, the authori-ties and former users work together, they have the potential to be reused, provid-ing the new owners with a reasonable, low-risk solution. Where it is not pos-sible to totally remove hazardous waste, containment of these contaminants has become a popular remedial alternative.

25Logistics ProPerties

metropolitan regions where there is a shortage of land the power to dispose of a suitable site is more often than not the decisive factor in the competition sur-rounding new developments, 2013 and 2014 was already seeing large-scale land purchases in formerly B locations that are now becoming A locations due to a lack of alternatives.

The phenomenon of comparatively short lease agreements, sometimes of less than 5 years for new developments and less than 3 years for existing properties, which investors with little experience of the logistics asset class often find rather difficult, should continue to be unprob-lematic when buildings are configured in a logistically intelligent manner because they are unlikely to be vacant for long peri-ods of time, short tenancy agreements can be compensated for by higher rents and a change of tenant in a generic logistics property does not require any additional investments. Nevertheless, it must be said that the right property is more likely to be chosen if the purchase is made by someone who has a good knowledge of the logistics market – in exactly the same way as the process of buying a hotel is totally different to buying an apartment or house.

Overall – assuming that the global economy does not undergo any dramat-ic changes – we can expect to see posi-tive developments in the logistics asset class in Germany. The only real danger lies in the behaviour of a small number of purchasers who either deliberately or perhaps due to a lack of expertise in this particular field have started to revert to poor quality properties. When they start to feel disillusioned with these purchases in a few years, as will inevitably be the case, it would be a great shame if this were to tarnish the good image of the logistics real estate market.

five metropolitan areas there are clusters which offer attractive investment oppor-tunities in logistics real estate, both in terms of their access to major transport networks and the potential size of the rental market. A typical example of this is Salzgitter with its concentration of rail car and heavy lorry manufacturing including the associated 1st and 2nd tier suppliers.

› E-commerce: The two main types of logistics properties that support the businesses of online retailers are now be-ing viewed with less scepticism than was the case until recently. These properties often have a floor space of 100,000 m² or more and their layout is typically very different from conventional multifunc-tional logistics premises. This is where parcels are packed, returns are processed and parcel distribution facilities of differ-

ent sizes handle parcel delivery through appropriate networks . All in all, this is a positive development. Although it must be said that particularly in this segment any investment does require a knowl-edge of the logistics market because many of these first generation proper-ties, despite the fact that they have only recently been built, in terms of their lo-cation and design already no longer meet the standards of fast developing logistics concepts – at the same time they are not really suitable for any other purpose.

› Land banking: In a market environment that is characterised by a strong demand for modern logistics spaces and at the same time by the short time lines expect-ed by logistics companies and industry, the provision of attractive sites is increas-ingly worthwhile. Whereas in the major Fo

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Garbe Logistics has built a modern logistics center in the heart of the Ruhr area for Schenker in Dortmund

«Jan Dietrich Hempel, Member of the executive board Garbe Logistic AG

26 germany issue i Hotel ProPerties

From January until November 2014, there were approximately 398.2 mil-lion overnight stays (+ 3 percent). Es-

pecially the demand from other countries has still increased (+ 5.0 percent to 70.2 million), the domestic demand during the same period increased as well (+3.0 percent to 328 million). Berlin sticks out of the crowd with approx. 27 million overnight stays which keeps the German capital in the third place after London and Paris. The growth of the emerging market

Record Year on the German Hotel Investment MarketTourism: In 2014 the positive trend from the year 2013 continued in both sectors of demand – business and leisure travel. In October 2014 over 52.500 hotels with almost 3.4 million sleeping accommodations were opened. Average occupancy: 37.1 percent!

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Winners of the architect competition for the new Hampton by Hilton in Dresden are the KLM architects from Leipzig.

countries, especially of the BRIC states Brazil, Russian Federation, India and Chi-na, suggests an ongoing further increase in visits and requests for accommodation in the next years.

In the first half of 2014 the top German cities all increased their performance in the hotel market compared to the previous year, the towers of strength have been in-ternational events and trade fairs (Dussel-dorf) and the increase in leisure demand (Berlin). The temporary data for Munich

and Frankfurt shall not cause so much sor-rows: First the basic for compare was very high/ near record levels and secondly the incomplete information per now indicates a stable development of ARR for the whole year 2014.

Business tourism is still focused on cities and regions which combine large enterprises/ strong industrial sectors with easy access to international airports and/or interregional railway stations. As in the years before most German cities

27Hotel ProPerties

keep growing steadily. Metropolitan re-gions as Frankfurt/Rhein-Main, Rhein-Ruhr, Rhein-Neckar, Munich, Stuttgart, Hamburg, Nuremberg, Bremen-Olden-burg, Hannover-Braunschweig-Göttin-gen-Wolfsburg, Central Germany and Berlin-Brandenburg spread their busi-ness locations, knowhow and economic strength into the surrounding areas.

RecoRd yeaR on GeRman hotel invest-ment maRket The boom on the German hotel investment market continued in 2014, considerably exceeding the trans-action volume predicted at the end of Q3. The hotel investment market recorded a year-on-year increase of 82 percent at almost EUR 3.1 billion, an all-time high. Roughly EUR 2.9 billion was invested in hotels, generating sales revenue of more than EUR 5 million.

International buyers were again the most active investors on the German hotel market. Buyers located outside Germany generated 64 percent, or around EUR 2.0 billion, of total transaction volume. Seller activity painted a similar picture. Interna-tional sellers sold hotel property valued at slightly more than EUR 1.8 billion in » Transaction volume in hotel classification

The hotel investment market recorded a year-on-year increase of 82 percent at almost EUR 3.1 billion, an all-time high.

Transaction volume according to buyer sectorThe boom on the German hotel investment market continued in 2014. International buyers were again the most active investors.

Source Colliers

1

2

4

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3 to 4 star hotels 53%

5 star hotels 31%

1 to 2 star hotels 16%

Other hotels 1%

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Corporates/ Owner occupiers 27%Open-ended property funds/special funds 27%private investors/ family offices 24%asset/fund managers 9%REITs 4%opportunity funds/ private equity funds 2%other investors 6%

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28 germany issue I HOTel PrOPerTIeS

total, reflecting a market share of almost 59 percent.

3-4 star hotels were popular with in-vestors, despite registering a year-on-year drop of 17 percentage points. Investors poured slightly more than EUR 1.6 bil-lion (53 percent) into this segment. Budget hotels recorded an increase in transaction volume of 4 percentage points to 16 per-cent (EUR 483 million). Investor activity was particularly strong in the luxury seg-ment. Luxury hotels generated a transac-tion volume of EUR 965 million (31 per-cent), an increase in this segment’s share of total transaction volume by 13 percentage points year over year. Deals in this seg-

ond with EUR 830 million, or almost 27 percent of total transaction volume. Pri-vate investors and family offices followed in third, investing a total of EUR 730 mil-lion (24 percent).

Opportunity funds and private equi-ty funds comprised the most active seller group, selling 75 hotels for a total of EUR 790 million. Corporates and owner-occu-piers followed with a transaction volume of EUR 520 million and a market share of 17 percent. Asset managers and fund managers accounted for EUR 510 million, guaranteeing them a share of 16 percent.

outlook: anotheR RecoRd yeaR in siGht thanks to hiGh demand We expect these record results to be more than just a one-time occurrence thanks to ongoing low interest rates and high demand. In-ternational buyer interest remains strong, particularly in large-scale portfolio trans-actions, and we expect these investors to continue their lively investment activity on the German market. However, supply is currently scarce, especially large-scale portfolios, which will limit transaction volume and possibly affect prices as well. If sufficient real estate products do become available, however, we can expect a trans-action volume of more than EUR 3 billion in 2015. «

Andreas Erben, Managing Director Colliers International Hotel GmbH

In the first half of 2014 the top German cities in all increased their performance in the hotel market compared to the previ-ous year, the towers of strength have been international events and trade fairs (Dusseldorf) and the increase in leisure demand (Berlin).

OPeraTiOnaL Figures Q2 2014

Source: IHA Deutschland 2014 / STr Global

City OccupancyChange to

previous year arrChange to

previous year revParChange to

previous year

Berlin 70.2 % + 1.0 % 89.00 € + 0.6 % 62.00 € + 1.7 %

Dusseldorf 67.7 % + 7.0 % 118.00 € + 22.4 % 80.00 € + 30.9 %

Frankfurt a. m. 67.1 % - 0.2 % 124.00 € - 0.1 % 83.00 € - 0.3 %

Hamburg 75.9 % + 1.0 % 103.00 € + 1.5 % 78.00 € - 2.5 %

Cologne 67.3 % + 2.2 % 100.00 € - 2.8 % 67.00 € - 0.7 %

munich 73.3 % 0.0 % 114.00 € - 8.3 % 83.00 € - 8.3 %

stuttgart 67.5 % + 9.0 % 96.00 € + 1.8 % 65.00 € + 11.0 %

germany 65.3 % + 1.8 % 95.00 € + 0.4 % 62.00 € + 2.2 %

“We expect these record results to be more than just a one-time occur-rence thanks to ongoing low interest rates and high demand.”andreas erben, Managing Director Colliers International Hotel GmbH

ment included the Jumeirah Hotel, which was sold as part of the Palais Quartier in Frankfurt and the Taschenberg Palais in Dresden.

cleaR focus on top locations – B lo-cations Benefit fRom poRtfolios More than two-thirds of total transaction vol-ume was poured into Germany’s seven top hotel locations – Berlin, Düsseldorf, Frankfurt am Main, Hamburg, Cologne, Munich and Stuttgart. A total of EUR 2.2 billion, or a market share of 71 percent, was invested in these cities within the scope of single and portfolio transac-tions. B locations saw investment totaling EUR 900 million.

44 transactions with an average vol-ume of slightly more than EUR 9 million were finalized outside our top 7 locations, not including portfolio properties. In con-trast, our top locations registered EUR 35 million more in average transaction vol-ume. A total of 39 single deals put total volume at over EUR 1.3 billion.

thRee industRies dominate the maRket Corporates and owner-occupiers were the most active buyer group. This group purchased hotel properties for around EUR 840 million (27 percent), primarily within the scope of portfolio transactions. Open-ended real estate funds and special funds, which comprised the most active buyer group in 2013, came in a close sec-

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30 germany issue i Residential PRoPeRties

Housing Companies: For the Tenant’s Own Good?

Consolidation of housing companies: this is what is taking place in the field of mergers and acquisitions. deutsche

annington is set to become Germany’s largest landlord.

Wohnen. The companies Annington and Gagfah were created in a similar fashion at that time. Financial investors bought state-owned portfolios and company-owned apartments, financed with debt and then ultimately listed on the stock exchange.

This principle of mergers and acqui-sitions is simple: Deutsche Annington hopes for a high return on the German market, compared with other Europe-an countries properties in Germany are usually in a good state of repair, prices are relatively low and the proportion of home ownership in Germany is still quite small. The calculation with a low equity approach: Due to the so-called leverage effect, access to favorable outside capital and secure rental income enable refi-nancing of purchases and a high return on equity.

Germany’s housing markets are attrac-tive. Compared to other European countries, both apartments and offic-

es are affordable to rent as well as to buy. International investors like to invest their money in German “concrete gold.” This was the finding of a survey of investors active in the German real estate market by the auditors of Ernst & Young (“Trend-barometers Immobilien-Investmentmarkt 2015”). The most recent deal: Germany’s largest provider, Deutsche Annington (DAIG), is about to take over Gagfah. If the federal cartel office approves, which it is expected to do, this will result in a hous-ing company with 350,000 housing units, run by financial investors. And the wave of consolidations will continue.

“We want to bring together the best of both companies,” says Philip Schmitz-Wa- Ph

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ters, spokesman for Deutsche Annington. The acquisition of its rival from the Ruhr District, Gagfah, is valued at approxi-mately 3.9 billion euros. This would cre-ate a company with approximately 350,000 housing units worth roughly 21 billion euros. According to Schmitz-Waters, it is still “a small fry” since the takeover of the listed private equity group only amounts to roughly 1.5 percent of the total volume of housing in Germany.

Takeovers “Capital market rewards size,” says Ernst & Young (EY). The top residential deals in Germany in 2014 to-taled approximately 4.8 billion euros and amounted to a whopping 40 percent of the entire residential investment market (see table). Last year the listed company, GSW Immobilien, was taken over by Deutsche

Volksdorf: The Hamburg residential development provides many services for families.

31Residential PRoPeRties

and tenant-friendly services particularly in East Berlin. By June, 600 new units will be built, amongst others, in Alt-Hohen-schönhausen near Prenzlauer Berg am Markt, another 2,000 are also planned for the eastern part of the city.

The latest deal in the portfolio is the acquisition by Howoge of 2,600 housing units from TAG-Gruppe. “With this cur-rent purchase, we have been able to remu-nicipalize a substantial amount of housing stock and fulfill the requirements of our partner to secure additional affordable housing in Berlin,” says Stefanie Frensch. The former private apartments, on aver-age 65 square meters and below the Ber-lin rent price index, should be subject to the framework of the “Alliance for Social Housing Policy and Affordable Rents.” According to this, one in three new leases should go to prospective tenants with a certificate of eligibility for public housing.

Looking for rare opporTuniTies “The stock of industrially constructed build-ings from the 1980s is in good structural condition, the vacancy rate is low and the nearest Howoge customer service center is only 1.5 km away,” says Frensch, explain-ing other motives behind the purchase. Moreover, its declared goal is to expand its own portfolio by 2018 through additional purchases and new construction of 60,000 housing units. As with all other Howoge projects, the priority is to create affordable housing for all segments of the population.

A lot of capital is looking for rare suit-able buying opportunities, and preferably in Germany. Because even if tenants in cities, such as Hamburg, Frankfurt or Munich, don’t want to hear it, rent prices there can still be classified as low for Eu-ropean standards. Thus, good prospects for investors. According to EY forecasts, as in the previous year sales worth over 52 billion euros are expected for 2015. Alone in 2014, the share of residential real estate transactions came to approximately 12.8 billion euros. Companies are looking for large portfolios and frequently typ- ical housing developments from the 50s and 60s.

With the latest Gagfah deal, DAIG has made it into the league of Europe’s top 3. And the race to consolidate continues. An-nington CEO Rolf Buch is already looking at the next buying opportunities, even new areas of business are possible such as mo-bile phone contracts, ambulatory care, or “meals on wheels,” says the property ma-nager in “Manager Magazin.”

anningTon: a very big porTfoLio With approximately 350,000 housing units, ma-jor tenant Annington would still be rent-ing more apartments than churches and other non-profit organizations (parties, charities, trade unions, etc.) combined, according to the Deutscher Mieterbund (German Tenants’ Association). Its federal director Lukas Siebenkotten wants to take Buch at his word regarding announce-ments on “increases in value through tenant orientation,” affordable housing and sustainable energy investments. “This size also increases the level of responsibil-ity for one’s own property holdings and the housing market as a whole. We hope that Deutsche Annington will learn from its mistakes, invest more in the repair and maintenance of its apartments”, Sieben-kotten continues.

“In Germany with its low rate of own-ership, the average duration of a rental is roughly nine years, for DAIG it is approx-imately 15 years,” says Schmitz-Waters, pointing out the level of satisfaction of DAIG tenants (see interview). Ultimate-ly this company as well as other housing companies must be measured by their actions. The board’s promise: “We will continue to offer affordable homes for all people in Germany. We will continue to invest heavily in energy efficiency and ap-propriate housing for senior citizens” (see Platow-Immobilien-Award).

Desired yield increases for housing companies of this size are often only first possible with changes in residential proper-ty management, e.g. laying off staff, reduc-tions in vacancy rates, rent increases and by outsourcing services, through the sale of receivables, securitization, portfolio reallo-cations and privatization of apartments. As part of the purchase of portfolios belonging to Bremische, for example, 60 percent of

the previous personnel was not kept on, according to a former employee.

“The key question will be just how sustainably a return-focused private company wants to invest or, specifical-ly, how much of the return on rents will flow into buildings, maintenance, etc. and over what period of time,” according to Andre Zey, head of acquisitions at Bre-men’s housing association Gewoba. With approximately 42,000 housing units, it is the largest landlord in the state of Bremen and is buying residential portfolios with 10 units or more, but strategically there is no upper limit. According to Zey, the requirements include residential buildings up to four-storeys, preferably with balco-nies/loggias, and stable rental structures. On-site craftsmen as representatives of the contracting company provide for a relaxed relationship with the tenants. However, a relevant, regional supply is currently al-most no longer available.

With the current merger of Anning-ton/Gagfah, both companies are expecting advantages in scale as well as financing on the level of roughly 84 million euros with-in two years, Schmitz-Waters confirms. The interest on the multibillion-euro debt of the housing companies should drop sig-nificantly because the new company antic-ipates a better rating.

These numerous opportunistic pur-chases sometimes also lead to remu-nicipalization. According to its manag-ing director Stefanie Frensch, Howoge Wohnungsbaugesellschaft of Berlin has purchased roughly 6,000 housing units since 2012. Moreover, a portion of the cash flow went towards new programs

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Hans-Jörg Werth, ScheeßelPhot

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“The key question will be just how sustain-ably a return-focused private company wants to invest.”andré Zey, head of acquisitions at Bremen’s housing association Gewoba

32 germany issue i German real estate market: statements

Germany – Real Estate investors need to change their habitsResidencial, logistics and hotel properties remain booming asset classes. But due to the lack of avaliable buildings in the so-called BIG 7 even C-class-cities grow in importance.

Commercial real estate in Germany

The German market for commercial real estate remained in 2014 in the focus of investors. Transaction volume increased in the previous year by 30% to a level around € 40 billion. It is likely that Germany as an econo-my with a relative friendly outlook under the Eurozone countries and also due to its institutional and legal stability will keep its importance for investments in commercial real estate. The current low interest environment sets investors under pressure to find attractive investments and holds the demand for commercial real estate in Germany on a high level. As the supply for prime assets in the so-called BIG 7* is limited it is likely that investors will shift their interests a little bit more to assets outside the prime segment or to cities of the second row. However, the main focus will remain on the leading cities and properties with a good quality which have a stable cash-flow. A trend which could be observed in the course of the last years was an increasing share of investors coming from outside Germany. In the last year foreign investors had a share around 50% of the transaction volume of the German commercial real estate market. In particular, Asian in-vestors gain in importance. A high level of foreign investors can also be expected for this year. Looking at the property types the office markets, of course, are the largest followed by the market for retail properties. Many investors focus on these property types which puts pressure on the investment yields for office buildings and shopping centers. However, also on the market for logistic properties as well as for hotels a growing investor interest could be witnessed. These property types need more special expertise than office properties. In last year the demand for portfolios grew. The market share for portfolios went from around 25% in 2013 up to 30% in 2014. Investors hold rich liquidity which makes larger deals and port-folio investments between different regions and also cross-border more presumable. * Berlin, Cologne, Düsseldorf, Frankfurt, Hamburg, Munich and Stuttgart.

Christian sChmidManaging Director,

Aareal Bank AG

33German real estate market: statements

»

Repositioning necessary – and investment in C-class cities

Compared to Europe, German apartments are very reasonably priced, both to rent and to purchase. The situation is similar for offices and shops. That’s why there are

attractive investment opportunities in 2015 – especially for international investors.Prices will continue to rise. Why? Because there is still too much capital looking for

suitable investment opportunities, which are few and far between: Investors with first-class properties in their portfolios will not part with them – or only at very high

prices. But this lowers the return on investment. But there is still momentum in the market. In 2015, there is ROI potential particularly

in the conversion of vacant office space yielding low returns. Demand is especially high for housing and hotels in the central locations of A- and B-class cities. Many

investors have increased the yield from their property portfolios from 2 to 10 percent through the conversion of office space to residential and hotel space.

Not only in A- and B-class cities, but in many other places too, investors are forced to reposition aging office properties. They also have to invest in properties in C-class

cities. Current work processes and employee demands are very different to those of a few years ago. It will remain very difficult to achieve a good rental yield in A- and

B-class cities in the foreseeable future if no investments are made there.In the retail sector, too, investors are having to give their assets in B- and C-class cities a drastic makeover. If new structural and conceptual solutions are not sought there, it

will be difficult to retain current tenants or find new ones.Residential real estate is still amongst the absolute best-sellers. Nevertheless, we have observed a ‘wait-and-see’ attitude prevailing amongst some investors. One reason is

continued uncertainty about how the discussion about rent control will turn out. 2015 will see sustained confidence in the stability of the German property market.

How long Germany will remain one of the safe investment havens depends, however, on how the many geopolitical developments evolve.

Peter tzesChloCkChairman of the Drees & Sommer Executive Board

Remaining attractive for investors

„No news: The German Commercial Real Estate Market remains attractive for domestic and international investors in 2015. Demand will clearly exceed supply again due to unchanging favourable economic data, comparably stable return on

net cash flow, and low correlation with CRE markets in other countries. Finan-cing remains readily available. Lenders face fierce competition that will lead to

further pressure on pricing.“

dr. Jan Peter anneCkeHead of Real Estate Finance, Münchener Hypothekenbank eG

Investment Market - the party continues

“While the fundamental data for the German real estate market reveal a somewhat tentative upturn, the party on the investment market continues in 2015: without

doubt the market will again be flooded with capital, whereby the price levels will rise a little further. In this environment entering project developments, portfolio transac-tions and occasional hotel investments at an early stage can be interesting. The truly

interesting question, however, is whether all the party guests will remember that a high tide is always followed by a low tide at some point.”

axel drwenski Real Estate Markets-Researcher, Commerz Real AG

34 germany issue i German real estate market: statements

Year of large package-deals

2015 will be the year of large package-deals. We’ll see international investors making their comeback to the German market. Emerging players from Asia, but also from the U.S. and Canada, will hit Germany targeting large-sized investment volumes. To meet the demand, capital will flow increasingly into secondary cities. Compared with the invest-ment markets, Germany’s office-markets have further upside-potential. However, they will be on the rise in the second half of the year, adding more heat to the already tight investment markets. Asset managers, who are able to co-invest, will benefit from this dynamic market development above average.

roy BrümmerManaging Director, CORPUS SIREO Asset

Management Commercial

Growing interest in residential, hotels, logistics properties„The activities of foreign investors in the commercial real estate market in Germany are expected to rise further in 2015. Apart from positive economic conditions, non-European investors benefit from the current-ly favorable exchange rates. Moreover, real estate prices in the global cities such as New York or London have risen very sharply so that the top German property locations come into focus even more. Requested asset classes continue to be dominated by office properties. However, the interest in residential portfolios, hotels and logistics properties is also growing.”

andreas PohlCEO Deutsche Hypo

More investment demand in smaller citiesThanks to limited investment opportunities and the ECB’s policy aiming at low-cost (cheap rate) liquidity inflow, the stable German real estate market remains highly attractive. The shortage of supply, relating to the core-segment asset classes of retail trading (especially high-street locations and large, newer shopping centres in the conurbations) and offices, already observable in the past, is now leading major investment demand to concentrate on smaller and medium-sized cities. In addition, investments in logistics and properties run by (specialist) ope-rating companies will increase. We expect rental developments and property prices to further diverge. Against this backdrop, portfolio transactions should also be scrutinized very closely.In the framework of their investments, foreign capital investors would be well advised to purchase the required services only through “genuine real estate professionals” who have national and/or regional knowhow, or possibly, con-template from the outset a high degree of diversification through an indirect property investment. In the sector of large residential transactions, the market now seems to be carved up.

miChael BergerHead of Real Estate Finance,

Helaba

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36 germany issue i GettinG Around CAnnes

Flexibility is essential at a trade fair. The most important information on taxis, helicopters & Co.

Taxi

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avis Car Rental69 La Croisette Tel.: 0033-820-611635 1www.avis.com

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PCa Chauffeurs27 Bd. MonfleuryTel.: 0033-4-93991568www.canneslimo.com

Gm Limousines internationalTel.: 0033-4-93396020www.limousines-cannes.com

Royal Road LimousineMandelieu la Napoule1757 Avenue du Général GarbayTel.: 0033-683-306948www.royalroadlimousine.com

PLaTiNium Côte d‘azur27 BD Montfleury, Tel.: 0033-4-93991568www.platinium-ca.com

HELiCoPTER FLiGHTS To NiCE(duration: 7-10 minutes)

azur Hélicoptère (e.g.: Cannes - Nice from 135 Euro+Tax)Tel.: 0033-4-93904070www.azurhelico.com

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BuS To NiCE, aiRPoRT (duration: approx. 50 min.)

Express (Line 210)Price: one-way: 20 Euro, round trip: 30 Euro

Bus stops in Cannes: Place Vauban - Hôtel de Ville (bus station)

Departs from Cannes Hôtel de ville:daily every 30 minutes from 8:00 a.m. to 6:00 p.m., additionally at 7:00 a.m. and 7:00 p.m.

37GettinG Around CAnnes

38 germany issue i DiRECTORY OF EXHiBiTORS

MIPIM 2015The German CompaniesMore than 170 German exhibitors will be present in Cannes this year. Several of them will be appearing together in the German Pavilion, the joint exhibition area of German companies.*

Exhibitor / Company CityBooth number

Aachen 1a c/o Stadt Aachen Aaachen R8.D13

ABG Frankfurt Holding GmbH Frankfurt R7.G20

Accumulata Immobilien AG Muenchen R7.G16

Adlershof Projekt Gmbh Berlin P4.C10

Aengevelt Immobilien GmbH & Co. KG Duesseldorf R7.G12

Airportpark FMO GmbH Greven R8.D13

APCOA PARKING Holdings GmbH Stuttgart P-1.G66

ARGOS Projektmanagement GmbH Hamburg R8.B20

AS&P - Albert Speer & Partner GmbH - Architekten, Planer

Frankfurt R7.G20

Auer Weber Assoziierte GmbH Muenchen R7.G38

Baker & McKenzie Duesseldorf R7.F28

Bankhaus Ellwanger & Geiger KG Stuttgart P4.C20

BASF SE Ludwigshafen C21.B7

Bayern Projekt GmbH Muenchen R7.G16

BayernLB Muenchen R7.G16

Baywobau Baubetreuung GmbH Muenchen R7.G16

Baywobau Baubetreuung GmbH Berlin P4.C10

Becken Holding GmbH Hamburg R8.B20

Berlin Hyp AG Berlin P4.C10

Berlin Partner für Wirtschaft und Technologie GmbH

Berlin P4.C10

Berlin, City of Berlin c/o Berlin Senate for Urban Development

Berlin P4.C10

Berliner Sparkasse - Niederlassung der Landesbank Berlin AG

Berlin P4.C10

Exhibitor / Company CityBooth number

Berliner Volksbank Berlin P4.C10

Bilfinger Real Estate GmbH Frankfurt P7.G24

Bodensee Standort Marketing GmbH Konstanz P-1.C72

Bonnvisio Real Estate GmbH Bonn R8.D13

Bulwiengesa AG Berlin R7.G38

Bundesstadt Bonn Bonn R8.D13

Catella Real Estate AG Muenchen R7.D5

CBRE GmbH Berlin, Frankfurt, Hamburg, Muenchen, Duesseldorf

R31.13

Centrum Projektentwicklung GmbH Duesseldorf R7.G12

City of Cologne - Office of Economic Development

Koeln R8.D13

City of Nuremberg Office for Economic Development

Nuernberg P-1.D71

City of Stuttgart Stuttgart P4.C20

Colliers International Berlin, Duesseldorf

P-1.M51

Colliers International Muenchen R7.G16

Corpus Sireo Holding GmbH & Co. KG Koeln R7.G20

Degewo AG Berlin P4.C10

Deka Immobilien GmbH Frankfurt R7.G20

Dekabank Deutsche Girozentrale Frankfurt R7.G20

Deutsche Immobilien AG Hamburg R8.B20

deutsche pfandbriefbank ag Unterschleiss-heim

R7.G17

As of: February 2015. Source: www.mipim.com* Companies participating in the German Pavilion are highlighted in gray

39DIRECTORY OF EXHIBITORS

»

Exhibitor / Company CityBooth number

DG Hyp AG Hamburg P-1.H65

Dialer Architekten Muenchen R7.G38

DIC - Deutsche Immobilien Chancen AG & Co. KGaA

Frankfurt R7.G20

Die Developer Projektentwicklung GmbH

Duesseldorf R7.G12

Drees & Sommer GmbH Stuttgart P4.C20

Drees & Sommer GmbH Muenchen R7.G16

Drees & Sommer Projektmanagement und bautechnische Beratung GmbH

Frankfurt R7.G20

Drooms Frankfurt R7.G20

DTZ Zadelhoff Tie Leung GmbH Frankfurt R7.G33

Duesseldorf & Partner Duesseldorf R7.G12

ECE Projektmanagement GmbH & Co. KG Hamburg P-1.H51

Eike Becker Architekten Berlin R7.G38

Eller + Eller Architekten GmbH Duesseldorf R7.G38

ENA - European Network Architecture Baden-Baden R7.G38

Engel & Volkers Commercial GmbH Hamburg R7.G20

Epple Projekt GmbH Heidelberg P4.C20

Ernst & Young Real Estate GmbH Eschborn R7.D18

Europa-Center AG Hamburg R8.B20

Flughafen Duesseldorf Immobilien GmbH

Duesseldorf R7.G12

Frankfurt, City of c/o Wirtschafts- foerderung Frankfurt GmbH

Frankfurt R7.G20

Frankonia Eurobau AG Nettetal R7.G12

Fraport AG Frankfurt R7.G20

Free and Hanseatic City of Hamburg - State Agency for Real Property Assets and Real Estate Management

Hamburg R8.B20

FREO Financial & Real Estate Operations GmbH

Frankfurt R7.G20

Galeria Real Estate Gmbh & Co. KG Duesseldorf R8.D13

German Pavilion / Deutscher Pavillon R7.G38

Geze GmbH / ENA - European Network Architecture

Baden-Baden R7.G38

Gira Giersiepen GmbH & Co. KG / ENA - European Network Architecture

Baden-Baden R7.G38

Exhibitor / Company CityBooth number

Grand City Properties Berlin P4.C10

Greif & Contzen Immobilien GmbH Koeln R8.D13

Grossmann & Berger GmbH Hamburg R8.B20

GVA Arthur Rubinstein & Cie. Frankfurt R7.E60

Hackenberg & Co. GmbH Frankfurt R7.G20

Hamburg Business Development Corporation

Hamburg R8.B20

Hamburger Sparkasse AG - Bereich Immobilienkunden

Hamburg R8.B20

Hammer AG Muenchen R7.G16

Hannover Leasing GmbH & Co. KG Pullach R7.G16

Hansainvest Hamburg R8.B20

Harpen Immobilien GmbH Dortmund R8.D13

Heitman Duesseldorf C15

Helaba Landesbank Hessen-Thueringen Frankfurt R7.G20

Hogan Lovells International LLP Hamburg, Dues-seldorf, Frankfurt

P-1.H 1

IBA Hamburg GmbH Hamburg R8.B20

Immobilien Zeitung Verlagsges. mbH Wiesbaden P-1.C72

Industrieterrains Duesseldorf Reisholz AG Duesseldorf R7.G12

Intecplan GmbH Duesseldorf R7.G12

Interboden Innovative Lebenswelten GmbH & Co. KG

Duesseldorf R7.G12

Invesco Real Estate Muenchen R7.E54

Investa Projektentwicklungs- und Verwaltungs GmbH

Muenchen R7.G16

Investitionsbank Berlin Berlin P4.C10

IPH Retail Property/ BBE Retail Consulting

Muenchen R7.G38

Iproconsult GmbH Dresden R7.G38

IVG Institutional Funds GmbH Frankfurt R7.G20

J. Mayer H. und Partner Architekten Berlin R7.G38

Jost Hurler Beteiligungs- und Verwaltungsgesellschaft

Muenchen R7.G16

K+P International Architects and Urban Planners GmbH

Muenchen R7.G38

KGAL GmbH & Co. KG Gruenwald R7.G16

As of: February 2015. Source: www.mipim.com* Companies participating in the German Pavilion are highlighted in gray

40 germany issue i DiRECTORY OF EXHiBiTORS

Exhibitor / Company CityBooth number

Kleihues + Kleihues Gesellschaft von Architekten mbh

Berlin R7.G38

LBBW Landesbank Baden-Wuerttemberg Stuttgart P4.C20

LHI Leasing GmbH Muenchen R7.G16

Liegenschaftsfonds Berlin GmbH & Co. KG Berlin P4.C10

Lorenz Immobilienberatung / ENA - European Network Architecture

Baden-Baden R7.G38

MCO GmbH Duesseldorf R7.G38

MEAG Muenchen R7.G16

Meininger Hotels Berlin P-1.C40

Metro Properties Holding GmbH Duesseldorf R7.G12

Michael Schick Immobilien Berlin P4.C 3

Muenchen, City of Munich Muenchen R7.G16

Munich Airport International - Flughafen Muenchen GmbH

Muenchen R7.G16

NAI Apollo Real Estate GmbH & Co. KG Frankfurt R7.F13

Neuform - Tuerenwerk Hans Glock GmbH & Co. KG / ENA - European Network Architecture

Baden-Baden R7.G38

NRW.Invest GmbH Duesseldorf R8.D13

Obermeyer Planen + Beraten GmbH Muenchen R7.G38

Object Carpet GmbH / ENA - European Network Architecture

Baden-Baden R7.G38

OFB Projektentwicklung GmbH Frankfurt R7.G20

Optima-Aegidius-Firmengruppe Nymphenburger Beteiligungs AG

Muenchen R7.G16

Pandion Real Estate GmbH Muenchen R7.G16

Phase Eins Project Consultants + Design Competition Org.

Berlin R7.G38

Priedemann Fassadenberatung GmbH Frankfurt R7.G38

Proprojekt Planungsmanagement & Projektberatung GmbH

Frankfurt R7.G20

PwC Berlin R7.D30

Quantum Immobilien AG Hamburg R8.B20

Rainer Schmidt Landscape Architects + Urban Planners GmbH

Muenchen R7.G38

Exhibitor / Company CityBooth number

REAG Real Estate Advisory Group Frankfurt P-1.G65

Real Estate Stuttgart Chartered Surveyors GmbH

Stuttgart P4.C 3

Realogis Real Estate GmbH Muenchen R7.G16

Rheinmetall Immobilien Gmbh Duesseldorf R7.G12

Rock Capital GmbH Gruenwald R7.G16

Runze & Casper Werbeagentur GmbH Berlin P4.C10

Sauerbruch Hutton Berlin R7.G38

Savills Immobilien Beratungs-GmbH Frankfurt R7.E74

Sax Concept GmbH Tuebingen P4.C 3

Schneider + Schumacher Staedte- bauprojekte GmbH & Co. KG

Frankfurt R7.G38

Schuessler - Plan Ingenieurgesellschaft mbh

Duesseldorf R7.G12

Seb Asset Management AG Frankfurt P-1.K 1

Siemens AG - Siemens Real Estate Muenchen R7.G16

Sparkasse Nuernberg Nuernberg P-1.D71

Stadtsparkasse Duesseldorf Duesseldorf R7.G12

Stadtsparkasse Muenchen Muenchen R7.G16

Strabag Real Estate GmbH Koeln P4.C20

Sueddeutsche Zeitung GmbH Muenchen R7.G16

Thomas Daily GmbH / Cityworld GmbH Freiburg R7.G38

TUEV Sued Muenchen R7.G16

Unicredit Bank AG Muenchen R7.G16

Unternehmensgruppe Nassauische Heimstaette / Wohnstadt

Frankfurt R7.G20

Vertigo Systems GmbH Koeln R7.G38

VR Wert Gesellschaft fuer Immobilienbewertung

Hamburg P-1.H65

Vuframe - Hands on the Future Regensburg FEHLT

Warburg-Henderson Kapitalanlage-gesellschaft fuer Immobilien mbh

Hamburg R8.B20

Wirtschaftsförderung Bochum GmbH Bochum R8.D13

Wohr + Bauer GmbH Muenchen R7.G16

As of: February 2015. Source: www.mipim.com* Companies participating in the German Pavilion are highlighted in gray

Status February 2015. This advertisement includes nonbinding information only, and is not meant to represent the performance of any particular investment. Any decision to acquire an investment asset should be based exclusively on a published sales prospectus. Such a prospectus will include detailed information on the economic, fi scal and legal parameters underlying a given investment, and specifi cally on its risks.

Contact:

Laurent Rucker, International Real Estate

Norbert Fath, German Real Estate

Martin Eilbacher, Public Infrastructure

T +49 (0)89 211 04-156 • www.hannover-leasing.de

Hannover Leasing – Real Estate Investments in Germany, Western Europe and the US

Join us at MIPIM / Munich booth Riviera 7 R7.G16

Covent Garden, Brussels

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42 germany issue i Puzzle

Germany and Abroad

Editor/Publishing House Haufe-Lexware GmbH & Co. KG A subsidiary of Haufe Group Munzinger Strasse 9 D-79111 Freiburg Board of Directors: Isabel Blank, Markus Dränert, Jörg Frey, Birte Hackenjos, Randolf Jessl, Jens Köhler, Markus Reithwiesner, Joachim Rotzinger, Dr. Carsten Thies

Editorial Staff Dirk Labusch (responsible Chief Editor) dirk.labusch@immobilienwirtschaft.de Laura Henkel laura.henkel@immobilienwirtschaft.de Jörg Seifert joerg.seifert@immobilienwirtschaft.de

Editorial Assistant Michaela Burgdorf

Advertising Germany: Haufe-Lexware GmbH & Co. KG, Corporate Division Media Sales, Im Kreuz 9, D-97076 Würzburg

Oliver Cekys Senior Key Account Manager Tel. +49(0)931 2791-731 oliver.cekys@haufe-lexware.com

Advertising Sales Department Monika Thüncher, Tel. +49(0)931 2791-464 anzeigen@immobilienwirtschaft.de

Graphic Design/Layout Hanjo Tews

Translation Agency (pages 3-5, 10-11, 14-15, 30-31, 42): global syntax Language Management Services, www.global-syntax.com

Cover Allianz DE

Copyright and Publishing Rights The magazine as well as each of the contributions and illustrations contained therein are protected by copyright. All rights reserved. No part of this magazine may be reproduced or distributed without the written consent

of the publisher.This prohibition applies particularly to the commercial reproduction through copying, the inclusion in electronic databases and the reproduction on CD-ROM.

Place of jurisdiction is Freiburg, GermanyISSN 1614-1164

Distributed circulation 4,000 copies

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Please send your answer with “Contest” in the subject line to redaktion@immobilienwirtschaft.de. The deadline for entries is 10 April 2015. The winner will receive a case of German “Tannenzäpfle” beer. Decisions are final.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

1. First name of a singer. His last name is “Croce”

2. Name of a US state

3. Name of a space shuttle

4. African state

5. British cult band

6. Landmark of Berlin

7. Who scored the winning goal for Germany at the soccer World-Cup in 2014? First name is Mario

8. European capital

9. Swiss mountains

10. Former German capital

11. Known American sociologist, first name: Jeremy

12. English soccer star, first name: Wayne

13. Name of a new Spanish party

14. German magazine

15. Name of the German finance minister

The solution is the difficult German word for “rent control”

FRANKFURT RHEINMAIN IN CANNES MIPIM, MARCH 10–13, 2015 Visit Frankfurt RheinMain at the MIPIM and inform yourself about current topicsand developments of the regional real estate market. Contact our numerous partner companies and see yourself the potential Frankfurt RheinMain has to offer!

VISIT US RIVIERA 7, R7.G20 (former R33.07)www.frankfurtatmipim.com

Organizers Premium-Plus-Partner

Stand-Partner

Media-Partner

Premium-Partner

FrankfurtRheinMain GmbHInternational Marketing of the Region

AS&P - Albert Speer & Partner GmbHArchitects, Planners

We have an extensive shopping list for 2015! Our wish list includes o� ce-, retail-, healthcare- and residential-properties. Whether existing or new, core+, value-add, prime, secondary or tertiary cities: We are targeting any single property or port-folios worth more than €5 m. For national and international customers, our acquisitions team selects, structures and acqui-res individual properties and also portfolios across all types of use throughout Germany. We support the entire purchasing

process - from sourcing properties, due diligence, purchase negotiations, right through to handling the after-acquisition tasks. Are you able to o� er us a suitable property? Please contact us at ankauf.commercial@corpussireo.com or tel. +49 6104 664-461.

ACQUISITION ISOUR MISSION

MEET US!10-13 MARCH 2015 | Stand R 33.07