A new study just released shows how investors have been widening their search beyond the traditional A-locations for German commercial property, and increasingly looking at so-called B, C and even D-locations as high prices and lack of supply squeeze investors out of the traditionally most popular locations.
Online buyer-seller matching platform Asset Profiler and property research company BulwienGesa concluded in their study that investment volume into Germany’s B-locations jumped 66% to a total of €4.13bn in 2011, markets which experienced investors could be said to be familiar with. This represents a rise to an 18% share of the market, up from its previous 13%. In C-locations, the market share figure rose from 6.6% to 7.2%, with investors zoning in particularly on retail assets. At the level of the D-locations, the corresponding figure was a rise from 7.5% to 10.8% of the market, representing investment volume of €2.47bn.
According to Asset Profiler’s CEO Norman Meyer, private investors are making up a larger share of the overall market, indicating a greater degree of comfort and familiarity with less popular investment destinations. This group, often consisting of family offices, smaller pension funds and foundations, invested about €1.7bn in commercial property last year, a rise of 36% on the previous year’s €1.2bn, although still a small minority in the sector’s overall transaction volume of €23bn. However, they represent a growing force in the segment for deals priced between €5m and €15m, which would frequently be typical of deal sizes in the smaller C- and D-locations.
Asset Profiler provides a secure match-making service via a closed, web-based platform for potential buyers and sellers to approach each other under conditions of anonymity, until mutual bona fides and levels of genuine interest have been established. Along with competitors such as ImmobilienScout24’s Commercial Network, Asset Profiler has been steadily building up a database of German and – increasingly – international clients interested in buying German property assets from €1m upwards.