Germany’s residential market remains buoyant, despite deals taking longer to go through due to an operational slowdown in the wake of the COVID-19 pandemic.
‘The market hasn’t stopped yet but deals are getting slower because of the operational problems – not all of the banks have the infrastructure for people to work from home,’ Dr. Konstantin Kortmann, head of residential investment at JLL in Germany, told REFIRE. ‘The demand side for residential is still strong, it’s still much sought-after. However, we’re just at the first level of the coronavirus. If it gets to the stage where we can’t cope with it, that will have a knock-on effect on the whole economy and could then include both the healthcare and the residential market,’ he added.
Yet in a sign that the market is taking a ‘business as usual’ approach there are some sizeable portfolios being traded. JLL is understood to be selling ‘Portfolio Acht’ in Berlin on behalf of an unnamed Family Office for an undisclosed sum. As the name suggests, the portfolio comprises eight properties across 140,000 sqm, or 2,000 units, all in Berlin. The base rental income is believed to be around €13m per year. It’s likely to be signed in the third quarter, according to market sources and Deutsche Wohnen is believed to be among the bidders. JLL and Deutsche Wohnen both declined to comment.
Earlier this month, residential investor Deutsche Asset One acquired around 715 residential and commercial units in Munich worth in excess of €300m from MEAG. The properties will be held in various Union Investment institutional open-ended real estate funds that are aimed exclusively at cooperative securities account investors (Depot A). Deutsche Asset One intends to invest around €500m in German residential assets this year.
‘We are pursuing a long-term and sustainable strategy with all our properties,’ said Thilo von Stechow, managing partner at Deutsche Asset One. ‘The careful and cautious treatment of tenants and property maintenance for a quality of life throughout the city are becoming increasingly important in transactions in the residential sector.’
The seller was advised by BNP Paribas Real Estate GmbH; Deutsche Asset One was advised by Noerr LLP and Drees & Sommer.