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FT : July 20th 2008 : Europeans optimistic on property prices German house prices have remained flat or fallen over the past 15 years or so. Unsurprisingly, almost half of German owners expected the price of their house to remain unchanged over the next five years. Nevertheless, 40 per cent of Germans surveyed expected an increase over the same period. In the other large countries covered by the poll, 64 per cent of Italians, 57 per cent of Spaniards and 56 per cent of Britons expected prices to have increased by 2013.
The results of the survey suggest that a majority of Europeans expect prices to remain flat over the next 12 months. Still, in France, Italy, Spain and Germany the proportions expecting an increase in prices were larger than the shares expecting decreases. HAVE A LOOK AT REAL PRICE I.E. ADJUSTED BY INFLATION IN GERMANY OVER THE LAST 30 YEARS AT http://media.ft.com/cms/770d9924-53f4-11dd-aa78-000077b07658.pdf . THIS SHOWS THAT GERMAN PROPERTY IS VERY STABLE VS INFLATION AND CURRENTLY ON THE CHEAP SIDE. AS PURCHASES ARE SELF-FINANCING, WE WOULD CONSIDER THIS A VERY ATTRACTIVE PENSION INVESTMENT. Reuters : March 20th 2008 : Perella ready European Property Fund Leon Bressler, who oversaw Unibail's rise as one of Europe's biggest property firms, is poised to make his long-awaited market comeback, armed with more than 1 billion euros ($1.56 billion) in fund money. Despite that and the fact commercial property prices had fallen more -- much more -- than elsewhere in Europe, the UK was likely to remain out of bounds for the fund in 2008. "There are more promising markets than the UK, like Germany where the office market is very sound and more broadly based," he said. Also unlike the UK, Germany had not seen a property bubble for 15 years. Its households were less indebted and its economy was based on manufacturing exports not services. WSJ : January 26th 2008 : Eurozone Growth May Rest with Germany As confidence frays in the euro zone, the German economy right now is proving the best hope for sustained growth in the region. A spate of economic data released Friday underscored what some economists believe will be a regional rebalancing, with workers and consumers in the euro-zone's largest economy earning and spending more as their southern neighbors retrench. FT Fund Management: Oct 29th 2007 : German Property Recovery Out of Kilter with Europe
Iain Keys, manager of London & Capital's German real estate fund, claims the German property market is unusual enough to warrant a fund of its own. In particular, he believes the German economy is set to outperform its neighbours, so benefiting its property market. "We feel that Germany is out of kilter with the rest of Europe. It's so attractive because its long-term prospects are much stronger than in other countries," Mr Keys says. "All the fundamentals are sound and there is fantastic growth potential, greater than in other countries. "As the economy recovers and there is more disposable income and more consumer spending, the value of the property and retail market will likely rise and improve returns." Furthermore, the Hartz IV labour market reforms introduced a few years ago are seen as having helped boost employment, further bolstering property prices. The market is quite diverse from one city to another and agents tend to be specialists only in their particular region. Hamburg, for example, is a hub for advertising and media, while Frankfurt is a centre for financial services and the ebb and flow of these two cities' commercial real estate markets depends on these industries. The current credit squeeze has had more of an impact on Germany's office market than its retail market, according to Mr Keys, a bottom-up property picker. "We don't tend to look at an area and say that's a must-buy area," he says. "We're looking for the availability of stock and assessing each property as it becomes available to us." An overwhelming challenge is that it takes more time to buy property than it does in markets such as the UK, with four to five months the usual waiting time to sign a deal. "It's a much slower system than we are used to, a much more protracted experience," he says. London & Capital employs two German nationals who are property experts to help Mr Keys overcome language and cultural barriers. "It's made a big difference," he says.
WSJ : March 21st 2007 : UK Property Loses Its Shine One investor homing in on Germany is Morgan Stanley. "Germany is one of our most important markets in Europe," says James Lapushner, an executive director at Morgan Stanley in Frankfurt with responsibility for acquisitions for the bank's real-estate funds in Germany. "We still think there is good value to be found here, compared to more-expensive markets like the U.K." Morgan Stanley invested €4 billion in German real estate last year, mainly in offices in cities such as Stuttgart, Munich and Frankfurt. This year, the bank would like to invest even more, Mr. Lapushner says. The company's strategy in Germany is to buy assets in good locations and add value to them, which includes refurbishing them. The bank is also interested in acquiring retail and logistics properties in Germany. Confidence in Germany's real-estate sector is growing such that even domestic investors are coming back into the fray, says Martin Brühl, a managing partner at real-estate advisory firm Cushman & Wakefield Inc. in Frankfurt. Following the temporary closure of some of Germany's open-ended funds in December 2005, sparked by massive withdrawals for fear the funds were overvalued, some open-ended funds decided to broaden their exposure outside their home market. It is easy to see Germany's appeal: Prime city-center-office yields are about 5% in Munich and 5.25% in Frankfurt, compared with 3.5% in London and 3.75% in Madrid, according to Cushman & Wakefield. Prime shopping-center yields in Munich are around 5.25%, compared with 4.5% in London, according to Cushman & Wakefield. Assets worth targeting include modern offices in good locations in Munich and Hamburg, where the markets are performing well and rental growth is expected this year, Mr. Brühl says. High street-retail properties in major cities such as Frankfurt and Stuttgart and second-tier cities such as Karlsruhe also are expected to benefit from rental growth this year, he adds.
FT : Jan 2nd 2007: Investors Bet on German Property Boom Investment in German commercial property is at a record high, boosted by the flood of foreign investors who are betting that the recovery in Europe's largest economy will at last trigger rising demand for offices and shops. The volume of German commercial property transactions more than doubled to € 47,45bn ($59.8bn) last year from 2005, according to figures by Jones Lang Lasalle, the property consultant and investor. Activity is at an all-time high and foreign investors account for 79 per cent of the deal volume. "We have seen extreme inflows of money in the German property market, mostly from the US," said Wolfhard Leichnitz, chief executive of IVG Immobilien. "The big question now is when we will see fundamentals catching up with expectations," said Christian Ulbrich, managing director at Jones Lang LaSalle in Frankfurt. Mr Ulbrich expects the combination of economic growth and lower supply of offices to drive rents up. JLL forecasts average rent in the big five cities to rise between 1.8 and 4.6 per cent a year until 2009. The introduction of real estate investment trusts in Germany this year is expected to boost investor interest in property assets further. Mr Leichnitz said IVG was considering whether to turn the company into a Reit.
WSJ : Feb 15th 2006: Europe's Largest Economy Attracts International Bargain Hunters Hoping to Buy at Bottom of Cycle |
