British investors look to German property

It could be the increased confidence Britons have in new real estate ventures as the financial crisis recedes, or it may be the levelling off or, in some cases, complete collapse of property values in markets closer to home. Whatever the reason, British investors seem to be flocking back to Germany in large numbers, with more now interested in purchasing a property there than at the height of the European real estate boom in 2008. 

According to a recent study conducted by German real estate consultancy Realogis, 30% of British buyers are interested in purchasing property in Germany, compared to 14% in France and 25% in their home country. The data was collected from around 100 investors across the private, fund-based and institutional sectors, a huge 74% of which think the German market is going to take off over the next three years.

In the wake of many popular European investment markets 'overheating' during the financial crisis, Germany presents a comparatively steady investment opportunity. A controlled supply of homes and a lack of speculative investors in the domestic markets has lead to property values holding steady throughout the last decade. Whilst boom markets such as Britain and Spain experienced extreme value surges of around 90% between 2000-7 before the recession, property prices in Germany actually fell 18% in this period, indicating the market is still ripe for growth. 

The many opportunities to be had in Germany's retail and industrial property sectors are also a big drawcard to British investors. 26% of those who planned to invest in Germany were looking at retail premises, while 23% were interested in the logistics sector.

"In contrast to German investors, the residential property asset class plays a minor role for British investors", said Umut Ertan, Managing Director at Realogis. "Instead, alongside the traditional office and retail focuses, it is mostly logistics and light industrials that investors have on their shopping lists for Germany."