The demand for German real estate is driving foreign investors to 'B cities' and university towns, PropertyEU's latest investment briefing on Germany has heard.
The demand for German real estate is driving foreign investors to 'B cities' and university towns, PropertyEU's latest investment briefing on Germany has heard.
'German investors are mainly interested in core, or core-plus,' said Jan Linsin, head of research at CBRE Germany, 'but if you know the market, you can go to knowledge centres or university centres. But you have to understand the fundamentals there.'
Marcus Cieleback, head of research at Patrizia Germany, agreed. 'Even in secondary cities such as knowledge cities based around a university, there’s a real diversity and a lot of opportunity but you have to be aware of where you’re investing and know the market.'
Part of the appeal of these towns is the consistency of demand for student accommodation, according to Thomas Landschreiber, COO of Switzerland’s Corestate Capital, which has student residential investments in Germany.
'Occupancy is at 99.5%, rental loss is below 1% because you have the guarantee of the parents. There is very nice cash flow, very nice rent per square metre because they care about the absolute amount they can afford: say €500 for a 20 m2 apartment, which is €20 per square metre and very high rent if you compare that to the German resi market. It’s a very interesting niche,' he said.