Real Estate

Ger­many’s new traffic-light co­ali­tion is tak­ing shape. How will it af­fect the real es­tate in­dustry?

The “traffic-light” co­ali­tion com­pris­ing the SPD, the Greens and the FDP has now presen­ted its co­ali­tion agree­ment for the peri­od 2021 to 2025 in Ber­lin. The tri­part­ite al­li­ance is aim­ing to trans­form the so­cial mar­ket eco­nomy in­to a so­cial-eco­lo­gic­al mar­ket eco­nomy by fo­cus­ing on cli­mate and di­git­al­isa­tion is­sues. At the press con­fer­ence, the in­com­ing gov­ern­ment de­scribed it as the most ex­tens­ive mod­ern­isa­tion of the eco­nomy for more than a hun­dred years. We set out be­low how this is to be achieved, the op­por­tun­it­ies arising for your com­pany and the top­ics you need to be par­tic­u­larly aware of.

Stut­tgart – Swiss Life As­set Man­agers and Beos AG, a sub­si­di­ary of Swiss Life As­set Man­agers that spe­cial­ises in cor­por­ate real es­tate, have ac­quired a com­mer­cial prop­erty in Korntal-Münchin­gen, an...

1. Gen­er­al over­view Wheth­er ten­ants are en­titled to claims against their land­lord in the event of pan­dem­ic-in­duced losses al­ways de­pends on the in­di­vidu­al case, also un­der Ger­man law. In par­tic­u­lar...

Stut­tgart – Private equity firm capiton has ac­quired a stake in Braun­sch­weig-based Solvis, a de­veloper and man­u­fac­turer of re­source-sav­ing and en­ergy-ef­fi­cient hy­brid heat­ing sys­tems. To­geth­er, capiton...

Düs­sel­dorf – Hy­dro Alu­mini­um Deutsch­land GmbH has sold its site in Bonn to de­veloper Cube Real Es­tate. The site cov­ers an area of around 40,000 square metres and is used by Hy­dro Alu­mini­um Deutsch­land...

The COV­ID-19 pan­dem­ic has left its mark on the European in­vest­ment mar­ket. In­vest­ment volumes were around 23% lower than in the pre­vi­ous year, 2019, with its re­cord per­form­ance. Buy­ers fo­cused primar­ily on prop­er­ties with stable in­come and those only min­im­ally af­fected by the pan­dem­ic. The num­ber of trans­ac­tions in which steps were taken to en­sure the buy­er met its fin­an­cial ob­lig­a­tions was at a re­cord high. The trend to­wards more buy­er-friendly ar­range­ments con­tin­ued. Those are the key find­ings of the CMS European Real Es­tate Deal Point Study 2021.For the latest edi­tion of this sur­vey of the European real es­tate trans­ac­tion mar­ket, in­ter­na­tion­al com­mer­cial law firm CMS sys­tem­at­ic­ally as­sessed and eval­u­ated more than 1,900 real es­tate agree­ments on which it ad­vised in coun­tries across Europe from the be­gin­ning of 2010 to the end of 2020.The key find­ings:In­vestors fo­cus on stable in­comeThe COV­ID-19 pan­dem­ic led to a change in in­vestor in­terest in the in­di­vidu­al as­set classes. Buy­ers fo­cused primar­ily on prop­er­ties with stable in­come and those that were only min­im­ally af­fected by the pan­dem­ic. Lo­gist­ics and res­id­en­tial prop­er­ties were es­pe­cially pop­u­lar.Of­fice real es­tate re­mained the strongest as­set class in Europe, but its share of the mar­ket fell to a re­cord low of 30%. De­mand for re­tail prop­er­ties re­mained at a con­sist­ently low level (15%). Lo­gist­ics real es­tate per­formed par­tic­u­larly well, post­ing a rise to 19% , a new re­cord. The pro­por­tion of in­vest­ment go­ing in­to spe­cial­ist prop­er­ties such as ho­tels fell sig­ni­fic­antly (14%). Res­id­en­tial real es­tate proved pop­u­lar with in­vestors, with its share rising to 22%.Sellers tak­ing steps to en­sure that buy­ers meet their fin­an­cial ob­lig­a­tionsDur­ing the pan­dem­ic, an in­creased need for se­cur­ity on the part of sellers was ap­par­ent. The pro­por­tion of trans­ac­tions in which steps were taken to en­sure the buy­er met its fin­an­cial ob­lig­a­tions rose to a re­cord high of 64%. In pre­vi­ous years, se­cur­ity was agreed in less than 50% of all trans­ac­tions.This high level is due to the in­creased de­sire for se­cur­ity on the part of sellers as a res­ult of the pan­dem­ic; they were of­ten un­cer­tain about the buy­er’s solvency go­ing for­ward. As a means of provid­ing se­cur­ity, both bank guar­an­tees (17%) and a not­ary’s es­crow ac­count (10%) be­came less pop­u­lar. In many cases, in con­trast, the buy­er made an ad­vance pay­ment (29%). In 9% of trans­ac­tions, use was made of sub­mis­sion to im­me­di­ate en­force­ment.Risk al­loc­a­tion in con­tracts: buy­ers catch­ing up in a seller-friendly mar­ket­Buy­ers were able to strengthen their po­s­i­tion fur­ther in 2020 with re­gard to risk al­loc­a­tion in con­tracts. In a mar­ket en­vir­on­ment that re­mained very seller-friendly, they suc­ceeded in ob­tain­ing fa­vour­able con­tract terms more of­ten than in pre­vi­ous years.As part of the war­ranty, guar­an­tees were again agreed more of­ten in fa­vour of buy­ers. The per­cent­age of agree­ments with in­di­vidu­al li­ab­il­ity pro­vi­sions in­creased to 75%. It was com­mon prac­tice to provide for both sub­ject­ive and ob­ject­ive guar­an­tees.The pro­por­tion of deals with seller-friendly lim­its on li­ab­il­ity, such as de min­imis and bas­ket clauses and caps, dropped slightly be­low the pri­or-year level in 2020. The up­ward trend seen over many years in agree­ments aimed at lim­it­ing li­ab­il­ity has thus been curbed some­what, while buy­ers were able to ne­go­ti­ate more fa­vour­able con­tract terms more of­ten than be­fore.Buy­ers also pre­pared ground with re­gard to the con­trac­tu­al pro­vi­sions on lim­it­a­tion peri­ods. An in­creas­ing num­ber of lim­it­a­tion peri­ods from 18 to 24 months were agreed in 2020, while there was a slight fall in the pro­por­tion of short lim­it­a­tion peri­ods of up to 18 months.Na­tion­al in­vestors more prom­in­entIn­t­er­na­tion­al in­vestors had a tough time in 2020. While in­ter­na­tion­al sellers have been re­spons­ible for the ma­jor­ity of deals since 2017, their per­cent­age dropped back down to 43% in 2020, with na­tion­al in­vestors be­com­ing more act­ive. Na­tion­al in­vestors ac­coun­ted for 48% of deals in 2018, while in 2020, 57% of real es­tate in­vest­ments were made by na­tion­al in­vestors.

Stut­tgart – EnBW En­er­gie Baden-Württem­berg AG has sold 49.9% of the shares in a port­fo­lio com­pris­ing 14 on­shore wind farms with 47 wind tur­bines and total out­put of 133 MW to Com­merz Real’s Klimavest...

From pan­dem­ic to pur­pose  As we wel­comed in a new year, the de­fin­ing is­sue of the next dec­ade looked set to be sus­tain­ab­il­ity. The rise of ESG – En­vir­on­ment, So­cial, Gov­ernance – was no flash in the pan; it was now a guid­ing prin­ciple for glob­al in­vestors and in­sti­tu­tions. Re­spond­ing to the cli­mate crisis was a pri­or­ity. And then COV­ID-19 changed everything.   Few would have pre­dicted quite how quickly the world would be turned up­side down by a glob­al pan­dem­ic, the like of which has not been seen for a cen­tury or more. The hu­man cost and in­di­vidu­al tra­gedies have been in­des­crib­able. The eco­nom­ic and so­cial im­pact un­pre­ced­en­ted. Cit­ies have be­come ghost towns. Mil­lions are work­ing from home, not of­fices. Re­tail, leis­ure and travel sec­tors have been par­tic­u­larly hard hit. And yet, in some ways, the events of 2020 have ac­cel­er­ated changes that were already gath­er­ing mo­mentum. For the real es­tate sec­tor there is now an op­por­tun­ity to re­set. For the first time, our re­search this year polls not only over 240 lead­ers across the real es­tate sec­tor, but over 1,500 seni­or of­fice oc­cu­pi­ers with de­cision mak­ing re­spons­ib­il­ity for prop­erty is­sues, and over 500 glob­al in­sti­tu­tion­al in­vestors. It takes a de­tailed look at mar­ket re­ac­tion to the pan­dem­ic and the last­ing im­pact it could have on the of­fice as­set class and the way in which we will ad­apt to our new work­ing en­vir­on­ment. We will also ex­plore real es­tate’s jour­ney from pan­dem­ic to pur­pose, as sus­tain­ab­il­ity and so­cial im­pact set the agenda for the sec­tor. This is our eighth an­nu­al re­port where we look to the fu­ture, ad­dress key is­sues fa­cing the real es­tate sec­tor and ex­plore mar­ket trends. We hope you en­joy read­ing it.

A first glance sug­gests there were no ma­jor changes in the European in­vest­ment mar­ket in 2018, with the in­vest­ment volume be­ing roughly the same as in the pre­vi­ous year at around EUR 264bn. However...

Real es­tate in­vest­ment mar­ket flat­lining at a high level Total in­vest­ment re­mains at pre­vi­ous year’s level.In­vestors forced to re­vise their in­vest­ment pref­er­ences: of­fice real es­tate still ahead, but...

Frank­furt/Main – Com­merz Real AG has ac­quired the Mil­len­ni­um port­fo­lio from Gen­er­ali Lebens­ver­sicher­ung AG for its open-ended real es­tate fund Haus­in­vest. The port­fo­lio com­prises 49 of­fice, res­id­en­tial...