Boston, MA -- (SBWIRE) -- 04/10/2014 -- Germany's commercial real estate sector remains in a strong position in Q2 2014 as the industry continues to benefit from its status as a safe haven amid the uncertainty surrounding the rest of the eurozone. We expect some upward movement in rental rates over the year, though growth will be more noticeable in some sub-sectors and cities than others.

The Germany Q2 2014 Real Estate Report examines the commercial office, retail, industrial and construction segments throughout the country, in the context of Germany's central role in managing the ongoing eurozone debt crisis.

Commercial real estate growth is very much dependent on a healthy macroeconomic environment. The situation in Germany remains broadly robust, thanks in part to its status as a safe haven market and its comparative regional strength, factors which resulted in a significant uptick in direct in investment during H213. We expect the sector to continue to outperform many of its regional rivals over the course of 2014, as economic growth starts to speed up across the country. However, we caution that many of the headwinds facing the sector in 2013 remain in place, most notably a slowing export sector due to weak demand from China and the eurozone, as well as ongoing concerns surrounding the health of the consumer sector.

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Nevertheless, we expect 2014 to prove a positive year for the real estate market which will reinforce its status as the strongest commercial property sector in the eurozone.

Recent Developments

- Patrizia Immobilien has purchased an office property portfolio in Hesse from a division of local property firm Commerz Real AG. The portfolio, known as Leo I, consists of 18 buildings that have a market value of about EUR1bn (US$1.36bn). The transaction, which is being made by Patrizia on behalf of its newly formed real estate special fund, is expected to have been completed in Q114.
- French fund manager Paref Gestion and Europe-based Internos Global Investors has formed a joint venture (JV) to launch a EUR100mn (US$134.98mn) equity retail park fund in Germany. The first SCPI fund, known as Novapierre Allemagne, will exclusively invest in German retail park assets and have an initial target gross asset value of EUR160mn (US$215.97mn). The fund aims to generate annual distributions of 6%.
- Aurelis Real Estate has acquired a former Hewlett Packard site in Boblingen, Germany. The site includes buildings for commercial/industrial use and offices with an aggregate floor space of around 52,000m2, of which 90% is leased. The property is located about 20km southwest of Stuttgart in the state of Baden-Wurttemberg. German lender Pbb Deutsche Pfandbriefbank funded the acquisition with a EUR20mn (US$27.51mn) loan.

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