International property investors are providing a welcome boost to the German real-estate market, which they see as an attractive alternative to popular destinations like Paris and London, reported Bloomberg.
While Paris and London property markets recovered faster from the recession and saw the greatest increases in capital values, those rates of growth have slowed. Higher prices amid increased competition in those cities have sent investors to Germany's five main markets--Frankfurt, Munich, Berlin, Hamburg and Duesseldorf. Property consultancy Savills PLC (SVS.LN) anticipates that interest will continue into 2011.
"Investors have been cautious to date and in the main focused on London and Paris but as the economy recovers, the top five cities in Germany are becoming a prime target alongside these locations," said Giles Wilcox, head of European cross-border investment at Savills.
International investors accounted for 40% of total transactions in Germany in the first half of the year, compared with only 15% in the same period last year.
They have boosted property transactions in Germany by 148% in the first half, which should result in total commercial real-estate investment there for the year of EUR16 billion compared with EUR11.2 billion in 2009.
Buyers from the U.K., the Netherlands and France, in particular, are targeting Germany alongside domestic investors, including open-ended funds, closed-ended funds, listed property companies and private-equity investors, which have re-entered the market.
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