German Residential Deals to Wane on Thin Supply, Jones Lang Says
Private-equity firms, pension funds, residential landlords and other large investors bought the most German homes since 2007 this year and purchases will decline in the next 12 months as less property comes up for sale, according to a forecast by Jones Lang LaSalle Inc.
Large investors will probably buy 8 billion euros ($10.5 billion) of German homes in 2013, compared with 10.8 billion euros in 2012, the Chicago-based broker said today.
“This year was characterized by a few large deals that made up almost 5 billion euros of the total,” Helge Scheunemann, Jones Lang’s head of German research, said at a press conference in Berlin today. “We’re a bit more cautious on our outlook for next year.”
Investment funds are buying groups of German homes because they are looking for a safe investment as interest rates hover near record lows amid Europe’s sovereign-debt crisis. Deals were fueled by the sale of almost 100,000 apartments by companies that needed to pay debts from last decade’s buyout boom.
Large deals this year include the auction of 21,000 apartments by Landesbank Baden-Wuerttemberg in April and a Barclays Plc unit’s sale of 23,500 apartments in July.
Sales next year will include Bayerische Landesbank 32,000 apartments held by its GBW unit, and 38,000 belonging to Gagfah SA (GFJ), Scheunemann said.
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