Investment market

Logistics replaces the office segment as the most sought-after asset class for the time being

982 Mio. €

Turnover 1/2021

1 Mrd. €

Foreign capital

198 Mio. €

Special fund

Commercial transaction volume by segment

After the commercial investment market in the Metropole Ruhr achieved a solid result last year with a transaction volume of €2.2bn, investors have so far been somewhat reticent, which is certainly also attributable to the hard lockdown in the first six months of the year. The transaction volume with commercial property in the first half of the year was around €982m. Office properties have so far only been able to contribute EUR 300 million or around 30 % to the result and have been replaced by the logistics segment as the most sought-after asset class for the time being. In the first half of the year, the only winner of the Corona pandemic accounted for approx. 338 million euros or around 34 %. This means that the logistics segment already accounted for around three quarters of annual turnover in 2020 in the first 6 months.

The high volume of the Other Assets category, which includes hotel, leisure and senior citizens' properties as well as land sales, is striking. In the first half of the year, an all-time high of just under EUR 260 million in sales was already recorded.

Retail properties got off to a weak start in 2021 with a transaction volume of EUR 84 million, which was to be expected given the ongoing scepticism among investors regarding the future of department stores and shopping centres. Currently, the investor focus in the retail segment is on supermarkets, discounters and food-anchored retail parks. The Metropole Ruhr is no exception.

The largest office investments in the first half of the year included the purchase of the approx. 25,000 m² BP headquarters in Bochum by Union Investment for 85 million euros, the sale of the former Vonovia headquarters in Bochum with approx. 19.19,000 m² of rental space and the Duisburg Kontorhaus with 11,000 m² of rental space to DEVK as well as the sale of the Essen office building Rüttenscheider Tor to Catella Real Estate AG, which acquired the property for the newly launched special fund AVW European Real Estate Fund.

In the logistics and production real estate segment, the sales of the Schenker logistics centre with approx. 40,000 m² of lettable space in Bergkamen and of a property used by Havi Global Logistics in Rheinberg with approx. 13,000 m² of lettable space to Warburg HIH as well as the purchase of a business park used by ThyssenKrupp with approx. 14,700 m² in the southwest of Essen to Sirius Real Estate made a contribution.

Among the other asset classes, the forward deal of the Nido senior citizens' residential complex with 109 assisted living units to Hamburg Team should be mentioned. The German commercial real estate market remained highly popular with international investors in the first Corona year, as evidenced by the evaluation of the investment volume by buyer group last year. Foreign capital accounted for just under €1bn or approx. 46%. In the first half of 2021, international investors contributed only €105m or 11% of the volume, which can partly be attributed to the measures taken to stem the third wave of corona. Special funds have been the most active so far, accounting for approx. 198 million euros or around 20 % of the volume.

Other investors contributed just under 59 % or EUR 577 million to the sales result. Among them, project developers with €197m and asset and fund managers with €135m were the most active.


"Special funds and project developers most active"


bulwiengesa AG

Development of net initial yields

The constant yield compression that had characterised the investment market in the Metropole Ruhr in almost all asset classes since around 2014 was slowed by the pandemic. The highest prices continue to be achieved for commercial properties in prime locations in Dortmund. The net initial yield stabilised at 3.8% by the end of the first half of the year in the challenging market environment. In the other submarkets of the Metropole Ruhr, the net initial yields for commercial properties ranged from 4.7 % (Essen) to 6.7 % in Oberhausen, reflecting the higher risk for this asset class.

The net initial yield for office properties fell slightly by 10 basis points to 4.1% in 2020 and could fall again by 5 basis points by the end of the first half of 2021. At present, the focus is particularly on properties with a secure risk profile. Value adjustments are realistic in some cases for properties with location and amenity deficits.

After the net initial yield for logistics properties fell by just under 50 basis points to 4.5 % in the course of 2019, the trend turned into a sideways movement by the end of the first half of the year. This is not due to a lack of investor interest, but rather to the fact that transactions in the absolute top segment have been lacking since then due to the shortage of product. The logistics property market in the Ruhr metropolitan area has already demonstrated its attractiveness with an impressive transaction volume in the first half of the year. With well-known groups and a broad base of small and medium-sized companies, logistics properties in the Ruhr region will continue to enjoy great popularity with investors, so that rising prices can also be expected in the short term.

There are currently no signs of an end to the low interest rate policy in sight in the near future, as otherwise the aid packages worth billions would fizzle out and a rapid recovery of the global economy to pre-crisis levels would be delayed. Interest rates on supposedly low-risk bonds continue to be negligible to negative. It can therefore be assumed that institutional investors will continue to invest more heavily in real estate in the medium term. The general conditions on the capital markets have thus hardly changed as a result of the pandemic, but they are encountering a marked change in the assessment of the risks of the individual real estate segments.

The core segment has lost breadth in all asset classes and will continue to encounter high investment pressure from institutional investors. As a result, prices for absolute core properties are likely to rise further. Against this backdrop, office properties with long-term leases (ideally with public sector tenants), modern logistics properties with high third-party usability and retail properties with a focus on local supply are seen as winners.