Brexit is just the ‘cream on top’ as there are other drivers behind Germany’s rising appeal in investors’ eyes, experts agreed at Real Asset Media’s Germany Investment briefing, which was held at the International Investors’ Lounge at EXPO REAL last week.
‘Brexit has been an advantage for Germany and has led directly to an increase in demand and in prices, but it is just the cream on top,’ said Rainer Schorr, Founder & Owner, PRS Family Trust. ‘There are other factors at play, notably low interest rates and the safety issue. For pension funds and family offices all over the world Germany is a safe haven, not just in Europe but on earth. Their number one objective is capital preservation’.
Even now that the economy is slowing down, investors do not doubt its resilience or stability.
‘Stability used to be boring but at a time of insecurity it becomes an important asset,’ said Sven Henkes, CEO, ZIEGERT Bank und Immobilienconsulting. ‘Add to that a transparent market, great liquidity, clear regulations so that investors know exactly what they can and they cannot do, and you get the current situation where supply cannot keep up with demand and prices keep rising.
The residential sector is a safe haven within the safe haven, he said, because of the supply/demand gap, particularly in Germany’s main cities.
‘We see a very positive future for the residential sector in Germany,’ said Henkes. ‘Our new report focuses on Germany’s top 8 cities and it shows they are all developing strongly and growing faster than the rest of the country’.
International investors’ interest is such that sometimes domestic capital chooses to take a step back. ‘In Germany often local investors will not compete with foreign investors,’ said Tobias Schulteiß, Managing Partner, Blackbird Real Estate. ‘The locals know the issues and the problems and they don’t want to pay too high a price, but foreign investors want to be in Germany at all costs and they are prepared to pay’.
They tend to stick to the main cities they know, but ‘in Germany there are many regional cities they have never heard of that actually deliver better returns,’ he said.