#EXPOREAL Foreign investors in Germany broaden their horizons

A growing number of foreign investors in Germany are looking at second-tier and even third-tier cities to buy real estate assets, according to Peter Schreppel, CEO of CBRE Germany.

‘There’s so much money chasing property in Germany, investors have to diversify their profile. Otherwise they will find themselves waiting in the queue, he said during an interview at EXPO REAL.

While the big five in Germany - Frankfurt, Berlin, Munich, Düsseldorf and Hamburg - remain the top investment locations, international investors are looking beyond these cities, Schreppel said. There are about a dozen or so cities that could be on their list, including places like Karlsruhe and Freiburg.’

Foreign investors are not just broadening their horizon in terms of cities, they are also going up the risk curve, Schreppel added. ‘Lending is gradually becoming more competitive - but I would like to stress the word gradually - and the equity proportion of investments remains larger than it was during the boom years.’

Schreppel conceded that there were many new kids on the block, particularly from the US, but added that they are operating at all levels of the risk curve. While opportunistic investors have headed the charge, a number like Blackstone and Kennedy Wilson are here to stay, he maintained. 'Blackstone has returned in a different shape and has reshaped its investment criteria. It is building teams on the ground and is not pursuing a speedboat in-and-out strategy anymore.'