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Investors pay Premium for Residential Portfolios

  • Analysis of 600 transactions with a volume of 2.2 billioneuros
  • Average premium of 1.6 times net cold rent
  • Supply shortage of residential portfolios in the transaction market

Frankfurt, 21st November 2017 – An analysis of the first three quarters 2017 by Engel & Völkers Investment Consulting and Engel & Völkers Commercial shows that investors currently pay a premium of on average 1.6 times net cold rent when acquiring a residential portfolio, compared to single asset deals. Overall, more than 600 transactions (single and portfolio deals) within Germany have been advised and analysed, which sum up to a total of 1.16 m square metres and about 2.2 billion euros.

“The residential real estate market today is a clear sellers’ market and residential portfolios are in shortage. As the pressure to invest is enormous, institutional investors are willing to pay premium for high investment volumes. This wasn’t the case two or three years ago”, commented Kai Wolfram, Managing Partner of Engel & Völkers Investment Consulting GmbH.

Before every portfolio transaction, each property is evaluated separately by regional specialists of the E&V network. During the evaluation process, current prices in the micro locations are considered. The thus established values combined have been compared to the overall portfolio deal value.

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