Germany Property Investment News

Schroders ploughs millions into German properties

Schroders German Residential Property Fund has purchased 987 apartments in the country’s largest Federal State (in population and economic output) of North Rhine-Westphalia. This investment is focused on the cities of Bielefel, Dortmund, Essen and Munich, and totals €73 million. The Property Fund already owns around 550 units in Munich alone.

There will be further investment in German property before the end of 2007, with €150 million going into real estate in the North Rhine-Westphalia, Munich, Hamburg and the Frankfurt Rhine-Main areas. Over half of the fund’s total volume of €700 million has already been invested in over 3,500 properties in Germany, both residential and commercial.

Charles Pridgeon, Head of Continental European Property Business for Schroders, said of the most recent investment: “The locations have been chosen for their growth opportunities, which will improve property yields and support solid growth of the fund going forward.”

This most recent investment into German property comes as Dr. Rainer Zitelmann, the German historian, journalist and management consultant who now focuses his attention on real estate issues, predicts a property price increase in the country. In Dr. Zitelmann’s latest German Real Estate Bulletin, he forecasts that the low rates of construction in the country will lead to soaring costs of rental and property purchases. Although this may prompt increased property construction in some areas, demand will continue to outweigh supply for some time, so benefiting those currently investing in German property.

The relative short supply of new property means that the market in Germany is predominately made up of existing properties. As a result, the more popular areas of the country among investors, such as Berlin, are finding new life breathed into existing districts, as buildings once considered run-down are now thought of as fashionable and sought-after.