6 minute read
GERMANY IN THE SPOTLIGHT
Good in parts
Germany’s safe-haven status has been challenged by COVID-19, with transaction volumes down year on year. But Europe’s largest market is still well placed to deal with the economic and structural correction ahead, writes Graham Parker
THE GERMAN real estate sector has been a byword for stability, attracting long-term investors with steady if unexciting growth. But the pandemic has shaken some of the assumptions that underpinned the market and investor confidence will take time to recover. The authoritative pbbIX index from specialist property lender Deutsche Pfandbriefbank tracks the performance of Germany’s Big Seven office markets and it shows that the sudden downturn in the second quarter of 2020 has continued well into 2021. According to the bank, office market activity is now back at levels seen after the dot. com bubble burst in the early 2000s. It was only weaker during the global financial crisis (GFC). According to Real Capital Analytics, the inflow of funds into office properties fell from €7.3bn in the Q4 2020 to €2.1bn in Q1 2021. Deutsche Pfandbriefbank says investors have been cautious in the light of a pandemic-driven decline in macro-economic activity. But it also points to data from the occupational markets, which implies such caution may be misplaced: letting activity has shown relatively little change through the pandemic, although office vacancies have edged up slightly to average 4% across the Big Seven. The bank also highlights some regional disparities: Ber-
Beuth University plans to place students into the former Tegel airport terminal building in Berlin as part of the Berlin TXL campus
lin continues to be comparatively stable, while all other sub-markets are deeper in crisis. Deutsche Pfandbriefbank’s analysis concludes: “If the pandemic can be overcome in the next few months, there could be an upswing in the economy over the course of the year, stimulating the office market. On the other hand, there are structural changes in the world of work, which are depressing the demand for space.” But this uncertainty is not deterring all investors. For example, Commerz Real’s hausInvest open-ended real estate fund has sold Highlight Towers in Munich to a joint venture between the family-owned companies Imfarr Beteiligungs and SN Beteiligungs. Located at the intersection of Munich’s ring road and the A9 highway in Park City Schwabing, the twin towers of 126 metres and 113 metres provide 85,800 sq m of office space. This is let
Hansainvest Real Assets’ Lumen Munich scheme, on the edge of the city centre
The 11,000 sq m New Work Campus, near Science City Bahrenfeld in Hamburg, is due for completion in 2025
to 27 tenants, including Fujitsu, IBM, Amazon, Sol Melia and Design Offices. In addition, the complex incorporates a five-storey mall and a seven-storey hotel with 160 rooms, as well as a three-storey underground car park with 756 parking spaces. “We have utilised the ongoing high level of demand for premium properties to attain a result attractive for our investors,” says Maja Procz, global head of transactions at Commerz Real. “At the same time, we are gaining leeway for investments in other properties in Munich — for example, in subsidised residential real estate.” Commerz Real was advised by BNP Paribas Real Estate and CBRE.
Elsewhere in Munich, Hansainvest Real Assets is pushing ahead with the development of a 13,000 sq m office scheme at Sonnenstrasse 23 on the very edge of the city’s historic city centre. Lumen Munich, designed by Allmann Sattler Wappner Architekten, is targeting DGNB platinum certification. “Both the architecture as well as the location are extremely appealing,” says Nicholas Brinckmann, chair of the management board of Hansainvest Real Assets. “Thanks to its greened, generously proportioned inner courtyard, Lumen Munich will offer unique quality in terms of light and space throughout the entire building complex. As dictated by the needs of the modern working world, our tenants can expect to find flexible floor layouts tailored to meet their individual requirements and which will suit both classical and innovative office concepts.”
Nicholas Brinckmann: “As dictated by the needs of the modern working world, our tenants can expect to find flexible floor layouts to suit both classical and innovative office concepts”
Development activity is continuing in other Big Seven cities, especially in Hamburg, where the Hamburg Economic Development Corporation is celebrating two pre-lettings at its 11,000 sq m New Work Campus on Gasstrasse near Science City Bahrenfeld. Fischer-Appelt Group and Weinmann Emergency have signed for the innovative office complex, designed by Carsten Roth Architekten and developed by Hamburg Team and Harmonia Immobilien. The project, which is due for completion in 2025, “is an important building block towards developing Bahrenfeld into a science city”, says Dr Rolf Strittmatter, managing director of Hamburg Invest. And the northern port city has another reason celebrate with the decision by Stuttgart-based fashion and lifestyle retailer Breuninger to take a 14,000 sq m store, which will anchor the €1bn Westfield Hamburg-Uberseequartier project, developed by Unibail-Rodamco-Westfield. “With its flagship store specifically developed for the location, the quarter is gaining an attractive centrepiece and increasing its national and international prominence,” says Andreas Hohlmann, managing director for Austria and Germany at Unibail-Rodamco-Westfield. “We look forward to the partnership and the grand opening in autumn 2023.” A total of 14 buildings are under construction at the Uberseequartier, accounting for a combined floorspace of 419,000 sq m. The project promises retail, entertainment concepts and more than 40 dining units in a mixed-use neighbourhood incorporating offices offering around 4,000 workplaces, three hotels, a cruise-ship terminal and a total of 650 residential units. The quarter is integrated into the local infrastructure with its own metro station, bus lines and a range of mobility services.
Elsewhere, the opening of the new Berlin Brandenburg Willy Brandt Airport in Schonefeld, just south of the German capital, has finally cleared the way for a massive new development on the 500 ha site of the former Berlin-Tegel Airport. The State of Berlin has commissioned Tegel Projekt to handle the development and management of the site, the masterplan of which envisages a broad mix of uses. A research and industrial park for urban technologies called the Urban Tech Republic will provide space for as many as 1,000 large and small businesses and around 20,000 employees. And a new residential district called the Schumacher Quartier will deliver 5,000 homes amid a 200 ha landscaped zone, fully served by day-care centres, schools and shopping facilities. At the same time Beuth University will move more than 2,500 students into the former terminal building as part of the wider Berlin TXL campus. n
GEO FOCUS
CONFERENCES & EVENTS AT MIPIM
10.00 > 10.45 | Workshop Room - Palais 3
GERMANY: BACK TO BUSINESS
WEDNESDAY 8 SEPTEMBER
Debate what cities and regions are experiencing the biggest growth, the latest tech innovation and the impact of Covid-19 behavioural change on different asset classes. A new fresh approach to our geo focus sessions this year. There will be a special emphasis on networking face-to-face Prof. Dr. Thomas BEYERLE after such a long break from us being able to do so. Managing Director, Head of Group Research This session will be a mix of opening keynotes followed by Catella roundtable discussions to encourage much more networking inspired by content of most interest to you. Participants will be entering the room and choosing a table topic of their choice.
Larissa LAPSCHIES
Managing Director Immobilienjunioren GmbH
