30
GERMANY
ISSUE
I
RETAIL PROPERTIES
Munich or Hamburg. Purchasing power in
Berlin is generally considered to be lower
than, for example, in Munich or in Ham-
burg. Berlin’s advantages, however, include
a very positive and above average demo-
graphic development and the by far highest
tourism appeal. Those trends are bound to
lead to a general tendency towards higher
purchasing power in the future.
RETURNS REMAIN BETWEEN THREE AND
FOUR PERCENT
Nevertheless, investments
in cities such asMunich, Hamburg, Frank-
furt, Düsseldorf, Cologne or Stuttgart
continue to be in great demand - when
they are available. Initial returns for prime
R
ail property investments in German
prime city centre locations have expe-
rienced more than just a renaissance
during the past three to five years. This
asset class had already been very popular
with many national and international in-
vestors for more than a decade, however,
in the past 36 months in particular, de-
mand has been growing at an unusually
fast rate. In addition to domestic institu-
tional and private or family office inves-
tors, a growing number of investors from
abroad have also discovered - or rediscov-
ered - the asset class.
Up until about three to five years ago,
non-European capital was invested either
in the United Kingdom or in France, al-
most exclusively as a means of entering
“the old world”. There, the available and
respectively traded real estate is primarily
concentrated in the capital cities London
and Paris. Germany, however, with its
polycentric structure, has evolved into a
viable alternative in the meantime. The
positive development has been encour-
aged significantly by the fact that until a
few years ago, returns were unusually high
with relatively low risks. Germany’s top 5
to 7 cities are now considered to be less
volatile than many other major European
cities. Germany is the biggest and most
stable EU state and the country’s funda-
mental analysis data points and progno-
ses indicate long-term stability. The high
gross domestic product and low unem-
ployment rate are just two of various note-
worthy aspects.
German High Street Retail Investments
Are in Greater Demand Than Ever Before
Positive trend continues: over the past few years, Germany has become an independent
investment location in its own right. There are excellent conditions for retail investments
in prime locations. One important aspect of this is the decentralised structure of many
important market areas, first and foremost in the national capital Berlin.
BERLIN ATTRACTS INVESTORS
Berlin in
particular has evolved into a top European
and International player in the area of retail
property investments.This is also reflected
in the transaction volume. On one hand,
this is due to the city’s sheer polycentric
size and its large number of good and
prime retail locations.This development is
also due, however, to the capital city factor:
many retailers and investors have begun
to think of Berlin as an attractive gateway
to continental Europe. Another factor for
the location’s rapidly growing appeal is
the high degree of liquidity in Berlin’s re-
tail property market. Suitable investments
are traded less frequently in cities such as
Berlin in particular has evolved
into a top International player
in the area of retail property
investments
