Stuttgart – As part of its third annual survey of real estate transactions in Germany, CMS Hasche Sigle has evaluated a total of 282 transactions from 2007 to 2012 and established that the German property market continued to make progress last year.
“There is still a great deal of interest from national and international investors in German real estate. Our analysis shows that sellers were again in a strong bargaining position in 2011/2012. We noted a high proportion of seller-friendly provisions in the transactions we evaluated, such as de minimis and basket clauses or liability caps,” said Dr. Volker Zerr, real estate expert and the initiator of the study.
“The debt-funded element of the purchase price has dropped over the past year, though. This can be chiefly attributed to the current high level of interest from equity-rich investors such as institutional investors and closed-end funds. At the same time, the decrease is also an indication of difficult financing conditions. Whether or not the property and finance market remains stable will in all likelihood depend on how the sovereign debt crisis in the Eurozone unfolds,” Dr. Zerr added.
Other findings of the study include:
- Since 2010, the proportion of portfolio transactions has dropped from over 40% to 30%, while in previous years it had risen steadily (from 13% in 2008 to 46% in 2010). One reason for this decline is demand for core properties, which has been growing since 2010. These are frequently sold individually – even when they form part of a property portfolio.
- Over the last year, demand for office buildings increased. In the first half of 2012, the proportion of office building transactions was 45%, while at the start of 2009 the equivalent figure was just 30%. By contrast, a decline in retail transactions is currently apparent. After the rise in 2010 and 2011 (from 24% to 37% in 2010 and 38% in 2011), the proportion of transactions in the retail sector fell again in the first half of 2012 to 26%, approaching its 2009 value.
- In 2011/2012, buyer-friendly trends began to emerge in what was essentially a seller-friendly market, specifically with regard to contractual limitation periods for warranty claims. The trend here was towards longer limitation periods. The proportion of transactions with a contractual limitation period of more than 18 months rose from 42% in mid-2011 to 76% in the first half of 2012. In the same period, the share of transactions with limitation periods of 12 to 18 months fell from 20% to 8%. Of late, the proportion of transactions with short limitation periods of less than 12 months has also remained at a comparatively low level (12%).
Contact at CMS Hasche Sigle
Dr Volker Zerr
T +49 711 9764 563
E volker.zerr@cms-hs.com
Press Contact
presse@cms-hs.com
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