The loans policies of the classical financiers in Germany have never been as restrictive as they are at present. Among other things this can be seen in the latest BF.Quartalsbarometer from Bulwiengesa: the mood of the banks is even more negative than it was at the height of the coronavirus pandemic.
he high-equity actors on the professional real estate transaction market can currently be divided into two camps: one that remains on the sidelines and is not participating in any shape or form in the various transaction activities – out of fear of buying too early.
John Amram, founder and CEO HPBA Off Market Solutions, reckons now could be a ‘ripe time’ for wealthy family offices to invest in real estate given their high affinity for direct ownership.
International investors, for whom German real estate had become too expensive in the boom years, are now setting store by rising returns.
The situation on the German real estate investment markets is more complicated than ever before.
Analysis of off-market transactions: more flexible and quicker than bidding processes
John Amram, founder of the brokerage company HPBA, knows that a lack of chemistry between the buyer and the seller can be a deal breaker. Digitalisation will not change this.
The rise of distress in Europe’s biggest market is expected to bring with it a larger proportion of off-market deals as investors turn to discreet fire sales.
The greater deal security makes off-market deals more interesting for investors in the current economic crisis. In particular they are likely to be utilised in the case of distress sales, which will increase according to real estate experts.
It is a common phenomenon: a seller with an exorbitant asking price and a compliant broker who pledges to attain even the most unrealistic of sales objectives, says broker and HPBA founder John Amram.
Countless market reports and specialist articles begin with sweeping statements such as: “Rarely has excess demand on the German real estate investment market been greater, something which currently favours sales to a strong degree.” This statement is – purely in terms of numbers – correct to a large extent.
The interest of investors in purchases outside of large structured bidding processes has further increased in the past year. This has been discovered by bulwiengesa and the investment broker HPBA. Accordingly, 71% of the respondents participated in bidding processes, 98% stated that they had at least in part been involved in off-market transactions.
A large number of properties are traded without being recorded in the statistics. Bulwiengesa is endeavouring to shed some light on this – without reaching any clear conclusions. The analytical company Bulwiengesa has made a second attempt after a year to quantify so-called off-market transactions on the real estate market. According to a study drawn up together with the real estate company HPBA the volume of this unofficial market for 2018 amounts to approx. 40 to 70 billion euros.
Actors on the real estate market appreciate trading out of the public eye. Off-market real estate transactions, not a part of standardised bidding processes therefore, are very popular in Germany with both sets of market players and generally lead to a successful conclusion even if they come at the cost of a price mark-up. A study puts the off-market volume for 2018 at 40 to 70 billion euros.
Rarely have so many properties been traded on the professional German real estate markets as during last year. This is also indicated by reports from the major real estate service providers, according to which 2018 was poised to achieve the highest transaction volume since records began. In many locations buyers are still paying record prices. Numerous German family offices are taking advantage of these high price levels to streamline their real estate portfolios – frequently after having held the properties for years and even decades.
No investor likes bidding procedures. They are expensive and frustrating. Nevertheless, more and more properties are being sold in this manner. Even those which are later described as an off-market deal. A number of “exclusive” negotiations are actually not at all exclusive.
Nowadays, more and more professional transactions are taking place in the form of off-market deals. According to a recent study both buyers and sellers are turning their backs on bidding procedures and addressing large swathes of the market because such procedures take up too much time – and far too often fall through.
In the transaction figures published by brokers, many sales outside the sphere of bidding procedures are not included.
Estimated volume of 40 to 50 billion euros in Germany – Nearly all market players interested
Many commercial properties change hands unnoticed. The size of this market is hidden from the general public. A study intends to lift the veil on this. But there are doubts.
… and why they could fall again. John Amram on the reasons for rising prices for apartments in Berlin and why the explanation ‘high demand, low level of supply’ is inadequate.
Those considering an exit should take advantage of the good market conditions – with some deliberation.
Those considering an exit should take advantage of the good market conditions – with some deliberation.
Berlin off-market investment group HPBA has managed €800m of deals in the first half of 2017, setting a new record for the firm, its founder and CEO John Amram told REFIRE this month.
For a long time Berlin was known as a city abundant with free spaces. This changed with Berlin’s economic upturn. Offices are almost full and industrial areas are scarce.
Many investors are asking themselves the question whether they should still invest in real estate or not. Up to what price factor would an investment be worthwhile? At what point is it best to buy?
The flexibility and exclusivity of off-market deals is becoming increasingly more popular for sellers as it offers clear advantages compared to structured bidding processes, says John Amram, founder of Berlin-based investment services boutique HPBA.
When, if not now is the right time for exiting the residential real estate market? Asks John Amram, Director of HPBA.
HPBA oversaw the sale of a property portfolio, encompassing an interesting mix of around 1,200 residential and retail units and worth almost 135 million euros.
In a difficult market climate the targeted buying and selling of properties is becoming increasingly important, and off-market deals are now openly talked about.
It may seem that currently no one wants to sell, but is this true? John Amram believes there’s always a reason to sell.
On the current, difficult residential real estate market, investors are becoming increasingly bold. Several investors discuss their strategies.
HPBA, a transaction advisor centred in Berlin, has already overseen deals with a total volume of around 1 billion euros this year.
Communication with his clients and contacts constitutes the core of his business. Nonetheless, John Amram, Director of HPBA Real Estate Solutions, is staying away from Expo Real.
The transaction-adviser HPBA is set to grow even though its director stays away from public bidding processes.
