Six German Retail Properties - the Louis Group International ...

the german property market
Activity in the German commercial property market has
recently been dominated by foreign investors. The basis
for this foreign investment has been the low cost of
finance, the relatively attractive yields compared with
other European property markets and the improved macroeconomic
conditions in Germany.
In 2005, some € 20.55 billion was invested in German
commercial property. The bulk of investment was seen
outside the traditional property centres and came in the
form of individual transactions and larger nationwide
portfolios.
In the light of signs which suggest that lettings markets
are recovering, the transaction volume in the major office
centres of Berlin, Dusseldorf, Frankfurt, Hamburg and
Munich have enjoyed a positive trend throughout. The
investment volume of € 20.55 billion represented a 33%
advance on the previous year's result.
Demand for commercial property is likely to remain high
throughout 2007. Demand from foreign investors will
properties germany
continue to be strong for as long as the interest-rate
differential provides scope for arbitrage deals.
Financing is initiated to a growing extent by foreign
institutions which have come to look at the German market
as being more lucrative. In this context the value of
property will depend to a much larger extent on the cash
flow and the underlying financial engineering. In future,
the location of a property will no longer be the sole
deciding factor for an investment.
While residential property prices in much of Europe have
surged in recent years, the German residential market
has been relatively unaffected. Office rentals in Germany
have also lagged and the retail market is comparatively
under-supplied in terms of space.
The comparatively sluggish performance of recent years,
coupled with the very attractive financing opportunities
would suggest that significant capital uplift is imminent.
Private Placement Memorandum Six German Retail Properties
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