High yields and moderate prices – Bremen is attractive for investorsInvesting in Bremen
Bremen's real estate market continues its record-breaking run
In this part of our series on the 2017 real estate report, we take a look at the investment sector and ask the following questions: What types of real estate are investors looking for? Do they prefer small or large properties? What is the overall volume of transactions? It's important to remember that demand is not just high in the housing market. Considerable sums are also being invested in commercial property.
Every year, Bremeninvest works with leading analysts to conduct a review into the real estate market in Bremen. They scrutinise individual parts of the market, including the market for office space and logistics premises as well as for retail, residential and investment. Andreas Heyer, CEO of Bremeninvest, is delighted with this year's investment figures: "It looks likely that for the third year in a row we will have achieved a record volume of transactions of more than €400 million."
High volume of investment in the first half of the year
Heyer has good reason to be optimistic in his forecast. In the first half of 2017, investments totalling over €250 million were registered in the Bremen market. That is more than double the amount recorded in the equivalent period of 2016. However, it should be noted that in the second six months of 2016, the volume of investment came to a not inconsiderable €315 million. This strong performance in the second half of the year gave Bremen the boost it needed to break through the €400 million mark for the second year in succession.
We can expect at least the same again in 2017 thanks to the market's positive performance in the first half of the year. In the sectoral breakdown, Bremen is benefiting from record levels of investment in German logistics real estate. It is forecast that this segment will make up one third of all property transactions. Only the office segment, at 42 per cent, accounts for a greater proportion of the total investment volume.
Big-ticket transactions less dominant in 2016
In 2016, office real estate accounted for the biggest proportion of the overall market. This was primarily because of two major investments – the sale of part of the Europa-Center office complex at Bremen Airport-City and the sale of the Speicher 1 building in Überseestadt.
High net initial yields underline Bremen's appeal
For the real estate industry, net initial yield is a key barometer for the attractiveness of a location. Investors use it to compare the performance of their portfolios. Net initial yield, which is expressed as a percentage, is the ratio of net rental income to gross purchase price. The higher the yield, the better. Bremen's net initial yield of 5.2 per cent for centrally located office buildings underlines its appeal to investors. By comparison, Leipzig's net initial yield is 4.8 per cent, Hannover's is 4.5 per cent and Stuttgart's is 3.7 per cent.
If you have any questions about Bremen’s real estate market or the real estate report, contact Thorsten Tendahl, team leader of Bremen’s business support and relocations service, tel: +49(0)421 960 0121, firstname.lastname@example.org.
To order a printed version of the 2017 Bremen real estate report, call +49 (0)421 960 0121 or email email@example.com.
A year ago, ENGINIUS began producing the first hydrogen truck with EU type approval in Bremen. Today, 100 employees already work at the plant. The plans are still set for growth, thanks to tailwind from Bremen and strong demand from around the world.Learn more
The greenest major city in Germany is Bremen - with an average of 60 square metres of sports, leisure and recreation space per person. Parks, sports facilities, but also water areas invite you to relax from the hustle and bustle of the city every day.Learn more
Hydrogen Technology Expo Europe is the largest trade fair for suppliers of hydrogen technologies. It takes place in the Hanseatic city of Bremen every September. The big names in this sector will meet up there, once again, on September 27th and 28th 2023.visit bremen-innovativ