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The peak phase of Cologne’s commercial real estate investment market continues

The peak phase of Cologne’s commercial real estate investment market continues. On the occasion of Expo Real, we have summarised the most important facts of the first three quarters of 2018 for you.

Commercially used properties with a total value of around 1.5 billion euros had been sold by the end of September. This corresponds exactly with the figures for the first three quarters of 2017, in which the current investment record of EUR 2.3 billion euros was set.

Demand for hotels and logistics properties is particularly dynamic also in Cologne, thanks to their comparably still higher level of profitability. The biggest transactions of the year so far include the sale of the Maritim hotel to a fund by Art-Invest for an estimated 120 million euros.
The hotel project “Urban Loft” in direct vicinity of the central train station was sold to Patrizia, before construction was even taken up. Forward deals are now often concluded early on for development sites as well as for construction and revitalisation projects.

There is strong demand for properties with appreciation potential. One example of this is the acquisition of the former Sal. Oppenheim premises in the banking quarter by MOMENI Group and HanseMerkur Grundvermögen. The resale of the Kaufhof building after just over three years appears to be based not primarily on a real estate investment strategy on the part of the seller. The buyer Signa Prime Selection AG on the other hand, certainly has the property’s optimisation potential in mind. The building is situated in an absolute prime location and it features around 69,000 square metres of rental space.

Despite the fact that purchasing prices were already at a high level at the start of the year, there has been a slight further decrease of prime yields for office and retail buildings, as well as logistics properties by 0.3 percent each. Real estate in Cologne will continue to be a sought-after asset class in which high sales prices can be realised, as long as critical factors such as an increase of interest rate levels in the eurozone and an end of the economic boom are no more than possible future scenarios.