Germany will retain and even strengthen its position as Europe’s safe haven, experts agreed at Real Asset Media’s Germany Investment Briefing, which was held online yesterday with a record number of delegates from 25 countries.
‘There are three reasons why Germany will retain its safe haven status,’ said Marcus Lemli, Chief Executive Officer of Savills Germany and Head of Investment Europe, Savills. ‘First, the solid healthcare system, good capacity and strong response to the epidemic; second, unemployment will be lower than in other European countries and third, it is a country with significant fiscal firepower and capital will be put to work wisely to keep the economy going’.
This confidence in Germany’s prospects is echoed by a flash poll conducted by Real Asset Media among delegates: 53% of respondents believe the country will retain its status as safe haven during and after the current crisis, while 37% think it will become even more of a refuge for capital. Only 10% see it losing its appeal.
‘Germany is export-oriented and therefore dependent on other countries, but the measures taken by the Government are stabilizing and strengthening the economy,’ said Matti Schenk, Associate Research, Savills Germany. ‘I don’t think the positive picture for Germany will change. There will be a rebound’.
In the short-term the German economy and the property market will be hit by the consequences of the COVID-19 epidemic, but strong fundamentals and good governance will pave the way to a rapid recovery.
‘There will be a dip during the lockdown, but as soon as the recovery comes we expect a return to normality because there is a lot of liquidity in the market,’ said Rainer Nonnengässer, CEO, International Campus.
‘Many investors have their pockets full of money and they want to buy, which is why I don’t see prices changing for high-quality assets,’ said Tobias Schultheiß, Managing Partner, Blackbird Real Estate.
The polycentric nature of the German market will also help, because investors have a wide choice between the top cities and smaller towns.
‘The smaller cities are the backbone of the economy, with a strong market and stable tenants,’ he said. ‘We have not had a single request for a discount or a rent holiday from the tenants in our portfolio’.