Not only Germany’s metropolises, but also German B locations are very popular with foreign investors.
Germany beats France and Great Britain as locations
Union Investment’s most recent study on the European Investment Climate Index surveyed around 150 German, French and British real estate investors regarding their location preferences. As a result, both top German cities and B cities attract foreign investors’ interest. Accordingly, 80 percent of the German investors surveyed would buy real estate in the B cities of the Federal Republic, as would 56 percent of French and 52 percent of British investors. The real estate consultancy “JLL” also assumes that German future cities and medium-sized cities will become the focus of investors, particularly in the commercial real estate segment. Helge Scheunemann, Head of Research at JLL Germany, added in a press release: “Because on the one hand the product shortage in the established real estate strongholds will not decrease significantly in the next few years and on the other hand the purchase prices have already reached levels that some investors have made an investment in will make the Big 7 impossible, there will be a moderate increase in investment volume in B cities in the future. “
B cities are becoming more and more attractive
In general, it turns out that foreign investors are generally more willing to invest in foreign B cities than Germans. Because while the Germans like to invest in secondary locations in their own country, they are reluctant to have foreign B locations; a maximum of ten percent buy real estate in secondary cities in other European countries.
The situation is different for British and French investors who also like to invest in medium-sized and smaller cities abroad. As a result, 44 percent of the British invest in Spanish B cities, 40 percent of French investors in Dutch B locations. B cities in France, Great Britain, Belgium, Sweden and Poland are also proving to be investment magnets.
However, the survey also shows that Eastern European cities can attract fewer investors in both primary and secondary locations. Only Warsaw and Prague can score, all other Eastern European cities such as Riga and Bratislava receive, according to the study by Union Investment, relatively few foreign real estate investments.
The investment climate index – transaction volume will increase
Union Investment’s investment climate index shows that the British real estate market grew by 5.5 points in the second half of 2019 due to increasing political stability, which means the UK is overtaking Germany. Over two thirds of the respondents also assume that the total European transaction volume for 2020 will reach or even exceed the 2019 level. Over half of the positive forecasts are for the residential property market, which is therefore the most likely to break the transaction volume of the previous year.
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JLL also anticipates a positive year for the German real estate market in 2020: “Due to its federal structure and the still existing economic and political stability, Germany is well placed to be high on the shopping list of international and local investors this year as well ”Explains JLL Germany CEO Timo Tschammler in a press release from January.
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