Germany Sector Outlook
- The corona pandemic hit the German economy hard, especially in the first half of the year. According to current figures from the Federal Statistical Office, gross domestic product (GDP) for Q1 2020 fell by 2.0% compared with the previous quarter - adjusted for price, seasonal and calendar effects. This was the strongest decline since the global financial and economic crisis in 2008/2009 and the second strongest decline since German unification. Only in Q1 2009 the decline was stronger with -4.7% compared to the previous quarter. Consumer spending by private households fell sharply in the first quarter of 2020. Investments in equipment also declined significantly. By contrast, government consumption spending and construction investments had a stabilizing effect and prevented an even sharper decline in GDP.
- After GDP fell dramatically in the second quarter of 2020 by 10.1%, we expect a strong upturn from Q3 onwards, with growth of 4.8%. Although the real economy is expected to contract by 6.3% in 2020, we expect to see growth of 5.8% in 2021 and 3.4% in 2022.
- Currently, the construction industry is showing a high dynamic. As a result of several major orders, real (price-adjusted) incoming orders in June 2020 was 12.4% higher in seasonally and calendar-adjusted terms than in May 2020, equivalent to year-on-year growth of 1.2%. Incoming orders in June 2020 reached a nominal value of around € 8.3 billion, the highest ever measured value of orders in a June in Germany.
Influence of the corona virus on the German economy
Real GDP for Germany (% change compared to previous year)
Source: Destatis, CBRE House View, September 2020.
- In particular, the financial aid totaled €1.1tn. (or 30% of GDP) initiated by the Federal Government and the short-time working allowance, which has already proved very effective in the global financial crisis, should take effect in the coming weeks and months and cushion the negative effects of the corona crisis on the economy.
- The economic stimulus and crisis management package of up to €130bn. initiated by the Federal Government at the beginning of June, consisting of 57 individual measures, is to ensure that Germany will emerge from this crisis much more quickly and will also provide significant impetus for a pan-European recovery. In particular, the temporary reduction of the VAT rate (financing requirement: €20 bn.) from 19% to 16% and from 7% to 5% from 1 July 2020 to 31 December 2020 will strengthen domestic demand in Germany and thus benefit the sectors most affected by the corona crisis, especially the retail and hotel sectors.
- In addition, the assistance programme (financing requirements: up to €25bn.) should secure the future of small and medium-sized enterprises, especially in the hotel and catering sector.
- Furthermore, the €50bn. provided under the future package (“Zukunftspaket”) should set the course for the overdue revolution in energy, digitisation and mobility.
- In the first half of 2020, €41.8bn was invested in the German real estate investment market (+34% y-o-y), which is mainly due to the strong first quarter. Compared to the first quarter, the transaction volume in the second quarter fell by 52% to €13.6bn. However, in view of the dramatic social and economic upheavals and the limited room for maneuver of market players as a result of COVID-19, this is still a good result, which underscores the great confidence investors have in the German real estate market. By comparison, the total transaction volume in 2009 was just under €10.5bn.
Real estate Investment Volume Germany total
Source: CBRE Research, July 2020; *Investments in residential properties and platform transactions (from 50 units)
- Due to corona, the review and decision-making processes currently take longer. Investors were more cautious and some asset classes, such as hotels, were hit harder but there was no slump. This was evident not only in the investment volume but also in the price development. A corona-related discount as feared or expected by some market players did not occur, and the current economic developments and the continued very good investment sentiment do not indicate such a discount. It should be emphasized that investment activity continued to be dynamic in the second quarter, particularly in the case of large-volume deals, despite the corona-related lockdown and the travel restrictions that were only lifted in mid-June which also made it more difficult to carry out transactions and on-site inspections. As a result, negotiations are continuing as planned without delays and transactions, including large-scale ones, are taking place in all asset classes although some products are temporarily not being brought to market due to increased uncertainty. This is likely to change in the second half of the year, especially as demand remains strong.
- There is currently an increased demand for assets that offer a sustainable long-income strategy, a trend that will continue in the second half of the year especially as investors are increasingly investing in core and core, plus products again due to the increased uncertainty. However, there is still a significant product shortage in the core segment in particular. For this reason, we currently do not expect prime yields to rise in the office segment, among others, but rather assume a sideways movement for the rest of the year. Yields have also stabilized in the logistics sector as well as for food-anchored retail properties and retail warehouses or retail parks. Their high systemic relevance and the resulting further increase in investor demand could ensure that yields here will tend to fall further as the year progresses. Yields in the hotel segment (+0.25%-points compared to the previous quarter) and in the rest of the retail sector have been weaker recently. Due to structural and cyclical changes in the second quarter, yields rose by 0.1%-points compared to the previous period for high street properties and by 0.25%-points for shopping centers.
A question of asset class
- However, the question of how critical the development on the real estate transaction markets has actually been only depends on the period under consideration or the points of comparison. The individual asset classes developed very differently in the first half of the year, especially in the second quarter. Due to the COVID-19 crisis, defensive asset classes that are independent of the economy, such as residential, also healthcare real estate and data centers, continue to be in high demand. At €12.8bn in the first half of the year, office real estate nevertheless remained the most heavily traded asset class - just ahead of residential real estate at €12.5bn. The declines from the first to the second quarter of 2020 cannot therefore hide the long-term trend: The residential real estate segment is consolidating its position as the number two in terms of transaction volume, overtaking the "classic" retail and hotel segments in institutional business.
Real estate transaction volume in Germany: more investments in all asset classes in H1 2020 except for hotels
Source: CBRE Research, July 2020.
- The mix of residential and commercial properties is also becoming increasingly relevant: With a significant increase of 85% to €3.3bn, land transactions also underline the potential for future mixed-use district developments, inner-city living and commercial settlements.
- Logistics properties in particular are emerging as winners of the current developments. The reasons for this are an expected even stronger reorientation of global supply chains, local stockpiling of goods and a further growth in online trade. The €3.8bn allocated to this asset class in the first half of the year represents an increase of 43% over the previous year. The letting and investment market for logistics properties is still being driven by continuing shortage of products, partly due to the lack of strategically located properties and building land in inner-city locations, which are increasingly in demand on the outskirts of the growing cities.
Growth in the retail segment as well
- Although the retail properties that were more severely affected by the lockdown were able to record a 38% increase in transaction volume in the first half of the year to €6.9bn, €4.6bn of this was attributable to the first quarter. In particular, demand for retail properties with tenants from the food trade and specialist retail centers is currently even stronger.
- Hotel properties were the only asset class to record a decline in transaction volume in the first half of the year by 27% year-on-year reaching to €1.2bn. The reluctance of many investors to invest in hotel properties in the second quarter is hardly surprising given the major impact of the pandemic on the hotel business. Most traditional institutional investors are currently finding it difficult to convince their boards to buy hotels. The exceptions are hotels in the core segment, which continue to be traded at high prices due to their resistance to the crisis. In the first two quarters of 2020, 89% of investments were in core or core-plus properties. Compared to the same period of the previous year, this represents an increase of 13%-points.
- The concerted actions of the Federal Government and the ECB should ensure that investor confidence in the German investment market, which continues to be considered one of the most stable and secure investment ports worldwide, continues to strengthen and that the interest rate environment for real estate investments remains favorable. Accordingly, investment momentum should continue to increase in the second half of the year in view of the ample liquidity available in the market.
- By the end of the year, we expect a total of over €50bn in commercial real estate and a good €20bn in the residential segment - at least without a second wave of the pandemic. This result would be around 10% lower than the 2019 results, but still well above the ten-year average. In principle, such a result would speak for the resilience of most types of real estate compared to other tangible and liquid assets.
- In the first half of 2020, 1.03m sq m was newly let or let to owner-occupiers in the five most important office markets in Germany. Compared to the first half of 2019, this is a decline of almost 37%. In addition to these new leases, around 110,000 sq m of lease extensions were registered. Although these are not included in traditional office space take-up, they are becoming increasingly important in the top office letting markets.
- One of the main reasons for the decline in office space take-up is the challenges caused by the corona pandemic, the effects of which are hitting the German economy hard. While the large rental inquiries in the top 5 office markets continue to be handled professionally, various smaller deals have been postponed, primarily due to lockdown-related uncertainties and more cumbersome and delayed processes. No cancellations worth mentioning were recorded. At the same time, the continuing shortage of high-quality office space is leading to the current low take-up.
- Compared to the first half of 2019, the average vacancy rate in the top 5 markets fell slightly by 0.1%-points to 3.6%. Compared to the beginning of the year, slightly higher vacancy rates were recorded, which is primarily due to the vacancy of older space.
- Due to the ongoing excess demand, high-quality office space in sought-after locations remains in short supply despite a well-filled development pipeline.
Vacancy rate mostly below its natural rate- especially in CBD locations
- At around 296,000 sq m in the first two quarters of 2020, the cumulative completion volume continued to decline year-on-year with a reduction of 12.2%. Around 4.7m sq m of new space is planned in the top 5 office markets by 2022. According to current information, nearly half of this new office space, or office space that is planned for core renovation, has already been let or reserved for own use. From the space to be completed by the end of 2020, 76% has been already pre-let.
Source: CBRE Research, July 2020.
- In the meantime, the economic shock has been overcome, partly thanks to the financial aid provided by the German government, and there are signs of a recovery after the massive slump in the first half of the year. With the slow return to normality and the return to the office, professional reopening and reoccupy workplace strategies are becoming increasingly important. In the long term, the 100 percent home office that some companies have had to introduce in recent months will not be the solution, instead we expect a more differentiated and flexible workplace environment. The trend towards an agile and fluid way of working began a decade ago and is now accelerating in the COVID-19 era. Accordingly, the topic of the home office is being discussed intensively and controversially.
Source: CBRE Workplace Consulting, 2020.
- The main issue is to adjust the (office) working world to the new needs and requirements, whereby a “one fits all” will certainly not work and each company must decide individually with and for the employees who, when and why will work in the office in the future. This also means, however, that in the future we will need different spaces than those currently used as existing properties. Similarly, there is no such thing as "either office only or home office only". The progressive agreement to work at different locations will give rise to new office concepts that combine, for example, team-oriented work in an office with concentrated work from a coworking space. Although the latter have recently slowed their expansion, partly because of COVID-19, they could be an important addition in the future.
- Against this backdrop, we do not expect any dramatic distortions in the letting markets, but we do expect more concessions on the owners’ side in terms of awarding incentive packages. In addition, there are signs of a trend towards longer lease terms in order to secure cash flow accordingly on the landlord side. Furthermore, landlords are likely to focus even more strongly on the creditworthiness of tenants in the future in order to better assess the risk of a possible loss of rent.
- The shortage of space and the focus on high-quality office space has recently led to further increases in top and average rents on all top 5 markets. By international comparison, however, the local real estate markets remain relatively favorable. Discussions with owners and potential tenants do not currently indicate that corona-related reductions in contractual rents can be achieved for high-quality office space. We therefore expect the current top rents to stabilize over the course of the year. Companies are still prepared to pay appropriate prices for high-quality office space. Significant increases in average rents were recorded in the top markets. The weighted average rent increased by a double-digit percentage year-on-year in four of the five office centers. In the medium term, we expect rents to rise again, although their growth momentum will be more moderate in the future compared to the pre-pandemic.
- Since 11 May, retail shops have been open again nationwide under the obligatory compliance with hygiene regulations and since 25 May, catering indoors and outdoors has been permitted again nationwide under compliance with country-specific requirements.
- According to the Federal Statistical Office, these easing measures enabled the retail trade to achieve one of the strongest sales increases in May compared to the previous month of 13.4% (price-adjusted +13.9%), the largest sales increase since the start of data collection (1994). Although retail sales in July were down 0.9 % on the previous month on a calendar and seasonally adjusted basis, the key figure rose year-on-year by 4.2 % in real terms. This figure amounted to 5.9 % in June.
Retail sales at constant prices
Source: Destatis, CBRE Research, August 2020.
- Sales in food stores in particular, but also in supermarkets, hypermarkets and hypermarkets, grew by 4.2 % and 4.6 % respectively in real terms year-on-year. By contrast, sales in textiles, clothing, shoes, and leather goods, as well as retail sales of various types of goods (mainly in department stores), fell short of the previous year's figures in real terms by -8.0 % and -14.5 %, respectively. The largest year-on-year sales growth of 15.6 % in real terms was reported by online trading. The pressure on over-the-counter retail thus remains high, forcing retailers here to invest more heavily in innovative, technology-supported concepts in view of an omni-channel strategy.
- The temporary reduction in value-added tax until the end of 2020 contained in the economic stimulus package is largely passed on directly to customers by the retailers, thus providing further purchasing impulses that should further support the retail trade. Accordingly, a V-shaped development is emerging for the consumer climate. According to GfK, a value of -0.3 points was forecast for August, a good nine points more than in the previous month.
- However, retailers are increasingly turning to landlords with requests for deferral of rent payments, rent reductions and temporary contract adjustments or for a shift to turnover-based rent instead of basic rent.
- An increased risk of insolvency (especially of small and medium-sized retailers without a functioning online channel as well as catering businesses) can be assumed; the examples known so far show that companies that were already in economic difficulties before the pandemic are particularly affected.
- At present, lease contract extensions or new leases are only found for absolute top properties or for certain sectors that benefit from the current situation (such as telecommunications).
- New leases especially in small and medium-sized towns and in secondary locations in large cities are likely to be concluded at a significantly lower rent level in the future than before the crisis; the position of retailers in these areas is correspondingly strong when it comes to lease extensions and renegotiations.
- Accordingly, hardly any contracts are being concluded at present, as tenants and landlords have different expectations and must first come together again at a level acceptable to both sides.
- But there are exceptions:
- the luxury locations, which present themselves as crisis-resistant and show a development that is decoupled from the development of the consumer locations
- supermarkets, hypermarkets and specialist retail centres, which have proven to be systemically relevant and are not affected by the crisis at all
- In Germany's top cities in particular, tenant defaults and vacancies will only be noticeable for a short time and will be quickly absorbed by the market, especially as foreign concepts in particular are still looking to tap into the German market with its huge purchasing power potential.
- Logistics is considered one of the best asset classes to weather the current storm, especially as the structural changes in the retail sector and the growing importance of online trading are strengthening the logistics sector for the long term.
- In fact, the corona pandemic has had only a very weak impact on the market. There was neither massive demand for space nor did the crisis lead to a collapse in demand. This means that the current situation differs significantly from that of the last crisis in 2008 and 2009, when demand dropped noticeably. Compared with the first half of 2019, take-up in the first half of 2020 fell by 10.7% to 2.95m sq m, but this is largely due to the weak first quarter. It is not surprising that the second quarter shows a more dynamic market development. This is because after the end of winter, many new construction projects are usually started by owner-occupiers in the second quarter - the point at which new construction projects are then recorded in the statistics.
- While take-up of space was lowest in the retail sector at 6%, it fell by 12% for logistics service providers and by 19% for production companies. Logistics service providers with retail customers have generally come through the crisis well so far but those who work for industry and especially the automotive sector are generally having a harder time at the moment.
- A clear trend towards rental agreements with short terms was not confirmed in the second quarter. Although there have been a few isolated leases of this kind, they have not had any impact on the market. In view of the question marks over economic development, many landlords are tending to focus more on long-term contracts again.
- The rent level is stable because demand has not collapsed, there are no large vacancies and the shortage of space remains acute. There is still a shortage of high-quality, modern logistics space, which is reflected among other things in the low vacancy rates of between 2% and 4% depending on the market. The volume of new construction is also limited as there is a lack of available land and construction industry capacities are also fully utilised or building permits have not yet been issued.
The industrial and logistics market defies the crisis on both the investment and the user side
Source: CBRE Research, July 2020.
- The result is that the vast majority of existing logistics real estate investors continue to be extremely interested in this asset class and that new investors, who were previously focused on other segments, are now also showing strong interest in logistics real estate. For example, there have been hardly any rent losses in this asset class in recent months compared with other real estate asset classes.
- The biggest challenge for the logistics investment market in recent weeks has been financing, as banks have demanded in some cases significantly higher interest rates or risk premiums for debt capital, but the financing environment appears to be improving.
- The trend towards large individual transactions has continued in the first half of the year, from 54% in the first half of 2019 to now 62%. However, this is also due to the fact that hardly any portfolios are currently being offered. However, there are signs that more portfolios could come onto the market again towards the end of the year, which in turn will attract foreign investors.
- Many companies are currently experiencing the disadvantages of just-in-time logistics and sensitive global supply chains that are trimmed for absolute cost efficiency. Should companies in the future diversify their supply chains more, rely on more local suppliers and larger domestic inventories and possibly also decide to increase production in Germany, the demand for logistics and production space in Germany is likely to continue to increase after the current crisis.
- As a result of the corona crisis, almost every company will have to readjust its logistics-related processes in order to better secure the much-cited supply chains. It has just become clear how systemically relevant logistics is for our society and our economy. In this context, logistics management and thus the requirements for logistics properties are becoming more strongly perceived by the general public. However, the increasing degree of complexity here requires an even more detailed, data-based market and property analysis for sustainable location decisions.
In the medium term, we expect demand for storage space to rise. This development will be driven by the even stronger reorientation of global supply chains, various re/nearshoring strategies, the introduction of buffer warehouses and the continued growth in online trading. These trends will manifest themselves with different intensity and at different times in the various sectors in Germany.
- Recent figures from STR show that the hotel sector is slowly recovering from the lockdown-related distortions which, as expected, have hit the industry hard. For example, turnover in June 2020 across Germany were 74% lower than in the same month of the previous year. In May, a reduction of 88% was recorded. In particular, the occupancy rate continues to rise after the easing of the situation for the hotel industry and was almost 24% in June, twice as high as in the previous month. By way of comparison, the occupancy rate in June 2019 was 76%. A remarkable increase in occupancy rates and thus rising revenues were recorded in June compared to the previous month by Rostock, Hamburg and Dresden, among others - an indication that domestic and city tourism is slowly returning to normal.
- The easing measures introduced are slowly leading to a certain revival in the hotel industry, although the sector is facing a wave of insolvencies due to the loss of sales and weak liquidity - especially among smaller hotel operators. Larger hotel chains have also approached the owners to seek solutions together with investors. Many hoteliers wish to share the operating risk with the investor during the crisis.
- Hoteliers argue that they cannot bear the operating risk alone if operations are severely restricted. Thus, the issue of operating risk, liquidity and creditworthiness of the operator is moving into the focus of investors and will certainly have a major impact on the future contract design and thus the hotel investment market, future players and returns. Thus, operators will aim to share future pandemics risks and comparable risks with investors by contract from the outset.
- Except for a few individual transactions, the hotel investment market has almost come to a standstill recently. At present, it is difficult for most traditional institutional investors to give positive feedback on hotel purchases in their boards. The exceptions are hotels and projects in the core segment, which continue to be traded at high prices due to their resistance to the crisis. In the other segments, uncertainty is great, and many are in wait-and-see mode. With the improving situation in the German hotel business, events in the hotel investment market should also pick up again in the further course of the year. Our discussions on the market also show that most players are convinced of the medium- to long-term attractiveness of the hotel real estate asset class. However, the fairly large project pipeline could become a challenge for the market, as most new properties are likely to be completed before the market fully recovers.
- In the short term, the hotel investment market will therefore take a breather, partly due to the current reluctance of banks to lend.
- On the banking side, the financing of hotel properties has become more restrictive, which is reflected in higher margins and lower loan-to-value ratios. For the time being, banks will probably concentrate on providing their existing top covenant customers with financing for hotels in good locations.
- Since mid-June, the restrictions on hotel and holiday operations in the individual federal states have been relaxed. In general, we expect a gradual recovery in demand in the most important major travel segments, although the extent of this will vary:
- Domestic/city travel will be the fastest to benefit from the further easing (lifting of some travel restrictions). By international comparison, tourism in Germany is very strongly influenced by domestic tourism and could grow further due to corona-related factors.
- The recovery of demand in international travel will take longer, with short-haul traffic recovering before long-haul traffic. This also to a large extent depends on the opening of the respective borders and the pandemic course of the countries of origin. With the end of the travel warning since 15 June for most EU and Schengen countries, Germany's borders are also open again.
- Leisure travel is likely to experience an immediate surge in demand, although surveys show that one in three Germans does not want to travel under the corona rules. In addition, many employees are on short-time work and are worried about their professional future, so that some of them will forego expensive holiday trips.
- As general economic activity picks up, business travel will also increase again. However, we expect booking figures to remain below the previous year's level in the short to medium term due to the recession.
- We expect events to only recover in the medium term. This is because of on the one hand cost-cutting programs of the companies and on the other the intensive use of digital media, which has made virtual meetings the norm in recent months.
- The residential asset class can already be described as a winner of the crisis, as housing is considered one of the most important basic needs. Due to the atomized tenant structure and high granularity of rental payments, the residential segment is a very defensive and stable asset class with a low risk of rent default, especially as government support systems have helped to secure and stabilize rental payments. Current studies confirm this statement. Actual rent losses and rent deferral requests are at a very low level for the major housing corporations. Depending on the portfolio, the proportion of rent deferral applications was approximately 0.3% to 1.0%, with only a fraction of these being actualized.
- The multifamily market has long been characterized by extremely low vacancy rates. In recent months, the already low fluctuation rate in Germany's major cities has also fallen once again. This can be seen from the sharp drop in the supply of new apartments. This is 10% to 20% below the previous year's level in some cases. In Berlin, the effect of the rent cap that came into force at the beginning of the year is an additional factor. Here, the supply of existing apartments has fallen by almost 40%. It can be assumed that vacancy rates in the major cities will tend to fall further rather than rise in the foreseeable future.
- In view of the continuing low level of new construction activity and the absence of speculative developments, the sustained high level of demand in the influx regions will ensure a high degree of rent stability in the short and medium term; in the long term, the trend towards rising rents could continue. A special situation exists in Berlin, where the aforementioned rent cap on existing apartments has led to stagnation of rents in the first half of 2020. At present, lawsuits are being prepared before the Federal Supreme Court to determine the extent to which the federal states have the right to set the cap on residential rents independently or whether this is the sole responsibility of the federal government. The outcome of this decision will also have long-term consequences for the capping of rents in the other major cities. In Munich, for example, there is a strong lobby for rent caps. In a first decision, the Constitutional Court in Bavaria has already rejected a petition for a referendum with reference to the responsibility of the federal government.
- It remains to be seen whether potential immigration from (economically weakened) countries on the European periphery will further boost long-term demand for housing in Germany's major cities.
- The transaction market for apartment buildings remains unaffected by the current situation. In the first half of the year, multifamily houses and portfolios (50 residential units and more) were traded for approximately €12.5bn. Most of this was attributable to the merger between the residential real estate groups Ado Properties and Adler Real Estate, with a value of approximately €6bn. But even without this major transaction, it can be seen that the transaction market is well on the way to reaching €20bn by the end of the year, the second highest figure since 2015.
Residential property transactions in Germany (from 50 residential units)
Source: CBRE Research, July 2020.
- In the first half of the year, 16 transactions worth more than €100m were traded, totaling nearly €9.2bn, compared with 15 transactions in the same period of the previous year, totaling approximately €4.9bn. At least half a dozen residential portfolios with an investment volume of €1bn each are currently being marketed. The participants are not only equity-strong investors from the insurance and pension fund sectors, but also investors who want to diversify and stabilize their mainly commercial real estate portfolios. The market is thus characterized by solid dynamics with a lot of new business. In addition to the acquisition of existing portfolios, buyers continue to focus on project developments. In addition to forward deals, numerous land banking activities in all project statuses were also observed in the last half year. In addition, the acquisition of project development platforms is increasingly becoming a focus of attention for residential property groups in order to achieve further strategic growth.
- The increased demand from opportunistic investors, who are hoping for corona-related price reductions or even a drop in prices, has not yet been satisfied.
- The healthcare sector is also currently the focus of attention for real estate investors.
- In the first half of 2020, almost €888m were invested in the German investment market for healthcare properties. This is an increase of 6% compared to the same period last year. Already in the first half of the year, more than 70% of the ten-year average transaction volume for a full year of €1.24bn was achieved.
Healthcare properties continue to be popular as a defensive investment
Source: CBRE Research, July 2020.
- Not least, the current recessive market phase as a result of the corona pandemic is increasing demand for defensive and non-cyclical real estate investments. Institutional investors particularly value healthcare and social properties that can ensure their sustainable cash flow. The continuing ageing of society will also lead to a further increase in demand for nursing care or assisted living facilities, both in new buildings and in refurbishment of existing properties, irrespective of the current economic situation.
- In the second quarter, German investors in particular were involved in market activity and accounted for 76% of the investment volume. This was primarily due to restrictions on international travel, which made it difficult for foreign investors to carry out transactions in Germany that had previously been planned in the second quarter. Accordingly, German investors were able to more than double their share compared with the three previous quarters, with the ratio averaging 30%. For the first half of 2020 as a whole, this means a share of 54% for domestic investors (+16% year-on-year). Investors from the Benelux countries were also particularly strongly represented in this half of the year with 36%. Portfolio deals accounted for 56% (+29%-points) of the transaction volume in the first half of 2020, which corresponds to an increase of 121% in terms of the invested volume compared with the same period of the previous year.
- With a share of 62% (+82% to €553m), nursing homes were by far the most important type of use, followed by assisted living with 26% (€228m). The share of the types of use clinics (€47m) and medical centers (€44m) with 5% in each case decreased substantially, although the transaction volume in these segments is generally comparatively low and therefore very volatile.
- In the second half of the year, the investment dynamics should continue to increase in view of the ample liquidity available on the market. Given the product pipeline, we expect an investment volume of at least €1.5bn by the end of the year. Higher investment turnover will only be limited by the continued limited product availability, as demand remains high. Accordingly, the top yield for nursing care properties, which is currently seen at 4.25%, should continue to stabilize.