Germany Commercial Property is where you should be targeting your investment.
Since 2000, the German economy has grown at its fastest rates ever. The German government is predicting a growth rate of 1.7% during 2007, following a growth rate of 2.5% in 2006.
The economy is benefiting from healthy corporate investment. Companies have begun building up their staffing levels and the government predicts that the annual average rate of unemployment will fall to 9.6% in 2007, from 10.8% in 2006.
In 2006, there was approximately €48 billion of investment in the Germany commercial property market, which was more than twice the figure for 2005. This demonstrates that Germany has the most dynamic market in Europe.
Confidence within the business community is at a 15-year high, which creates demand for business space. This increase in demand pushes up commercial rents, which results in higher capital values for the property owners.
The average yields for Germany commercial property are reported now at approximately 5%. Yields for retail property within the inner city areas of the western parts of Germany stand at an average of approximately 7%. In the eastern part of Germany, they are at an average of 8%. However, prime property in major cities, such as Munich and Berlin, command yields of around 4-6%.
Yields for office and industrial property stand at approximately 4-8%, depending upon the building’s quality. If you don't have access to the huge capital sums needed to invest in commercial property, the best way to play a part in this sector is through property syndicates.
Finally, let me leave you with some pictures of my trip to Germany.
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