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Investment transactions in Hamburg increased by one third year-on-year in the first quarter of 2015, according to research by Grossmann & Berger.

A total of €750 mln of property changed hands in the German city in the first three months of the year, indicating that the revival seen in 2014 is set to continue.

Despite the sharp upward trend in values, the number of transactions barely changed, while the predicted influx of capital from Asia has so far failed to materialise, said managing director Axel Steinbrinker.

He said: ‘The pronounced upwards trend observed in 2014 proved its durability in the first quarter of 2015.’

Activity in Q1 was concentrated in the central submarkets City and HafenCity, where 11 properties valued at €480 mln changed hands, accounting for 64% of the total volume.

The second-biggest submarket was Wandsbek, where 11% of the total volume of transactions took place, primarily through the sale of the W1 shopping centre to a specialist fund managed by the KGAL-Gruppe.

Offices accounted for 60% of all activity, with the standout sale the portfolio of three buildings acquired by US investor Pembroke Real Estate from Norrporten. Retail sales totalled €145 mln, a market share of 19%, while hotels moved up into third place with 15%.

High demand for German property kept premium returns for offices low at around 4.5%, while returns for retail fell from 4.7% to 4.5% and for industrial properties from 7.2% to 6.75%.

Despite the predictions of Asian capital moving into Europe, the proportion of cross-border investors declined from 36% to 32%, while the share of foreign vendors went up from 19% to 42%. Market players from Sweden, the UK and Luxembourg were among the biggest sellers.

Steinbrinker said the outlook for 2015 was one of continued high demand and declining premium returns, though a shortage of top-class real estate will make it hard to sustain current investment levels.

‘At the same time, low interest rates, the location’s considerable economic strength and the general need to find investment opportunities will act in favour of transactions on the Hamburg market,’ said Steinbrinker. ‘Increasingly, we are observing a trend towards portfolio selling.’