GERMANY – Nordrheinische Ärzteversorgung (NAEV) continues to fund speculative developments as its home city of Düsseldorf bucks national property financing trends.

NAEV, the pension fund for doctors in the North Rhine region, has started construction on a new 3,000sqm speculative office development in Düsseldorf and is close to completing another 11,000sqm development in the city, pre-let to KPMG.

Hermann Aukamp, CIO and director of real estate investments, told IP Real Estate the latest project was attracting "early demand" from prospective tenants.

Düsseldorf stands out from other major cities in Germany for having "noticeable speculative development", according to a report by Savills.

All other cities covered by the research – Berlin, Frankfurt, Cologne, Munich and Hamburg – were experiencing "challenging" financing conditions due to "lenders requiring high levels of pre-lets and equity".

Düsseldorf, on the other hand, was benefiting from "local investors and private equity buyers" providing equity or mezzanine capital.

Marcus Mornhart, managing director and head of office agency at Savills Germany, said: "The message from Düsseldorf to the other markets is that occupiers are appreciating speculative developments."

Mornhart cited Kö-Bogen, another speculative office development in the city "almost entirely let prior to completion".

The project was acquired by Art-Invest Real Estate Funds from Die-Developer earlier in the year on behalf of two local pension funds.

"These schemes demonstrate that high-quality space in good locations can enjoy lively demand and occupiers are prepared to pay the underlying rents," he said.

"Developers can also find similar, favourable opportunities for speculative development in other cities."

Aukamp said NAEV was also continuing to fund residential developments in Düsseldorf and other cities, including Hamburg, Cologne, Munich and Berlin.

The pension fund is also seeking to acquire "big box" retail centres, but Aukamp said prime high-street retail assets were "far too expensive these days".

Outside Germany, NAEV has been seeking to acquire prime retail assets in Prague, and is still targeting investments in London and Paris.

Spain – "especially Madrid and Barcelona" – is also now on the pension fund's "watch list", Aukamp said.

Outside Europe, NAEV continue to invest in Asia, the US, Canada and Asia.

For the former, the focus is on offices in San Francisco, Boston, New York and Washington DC.

Aukamp said the pension fund was now also looking "for smaller markets like San Diego", as well do multi-family developments.

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