Real estate: developments in the real estate business
Increased volatility on capital markets helped commercial real estate gain appeal as an asset class worldwide. As a result, global transaction volume picked up during the first nine months of 2013. Nearly all major markets could periodically record significant gains compared with the previous year’s period. Although core properties remained a focal point, investors’ risk appetite is growing, and they are increasingly setting their sights on secondary market segments. As a result, demand is becoming more varied. METRO PROPERTIES was able to take advantage of the favourable environment and successfully sell real estate in both saturated and emerging markets. Aside from the portfolio transaction with the sale of the second tranche of OPCI in France, individual properties such as the Ümraniye shopping centre in Istanbul could be divested.
European real estate markets generally developed positively from January to September and improved quarter by quarter. Investors continued to view established and saturated markets such as Germany, France or Great Britain as safe havens. In addition, the particularly crisis-battered Southern European markets largely recovered. As of September 2013, commercial real estate transactions across Europe totalled about €95 billion. Yields for commercial properties remained mostly stable or posted slight declines in individual markets over the course of the year.
Thanks to the high degree of stability in terms of property values and economic climate, investors’ confidence in the German investment market for commercial properties remained high. This was reflected in an approximately 30 per cent increase in transaction volume during the first three quarters of 2013 compared with the same period of the previous year. Real estate investors continued to apply a risk-averse investment strategy. As a result, prime yields – given the high demand for core products – remained stable at a low level or declined slightly in all asset classes. The excess demand has resulted in an increasingly growing risk appetite. METRO PROPERTIES was able to profit from this positive environment with, amongst others, the successful sale of two revitalised speciality store centres in Dortmund and Mannheim and the Adler headquarters in Haibach.
Real estate markets in Asia and the Pacific region really picked up during the first nine months of 2013, with transaction volume for commercial properties surging almost 55 per cent over the previous period’s level. At a total of about €111 billion, transaction volume was the highest ever recorded for the first three quarters of a year and reached the investment volume recorded for the entire year of 2012. Growth was primarily driven by the major investment markets like Japan and China. Yields in the premium segment for commercial properties in the region remained mostly stable.