The office market, along with a solid economy and low interest rates, are driving the German property boom, according to a new report from Savills released at EXPO REAL.
The office market, along with a solid economy and low interest rates, are driving the German property boom, according to a new report from Savills released at EXPO REAL.
Marcus Lemli, CEO of Savills Germany, noted that, ‘The German investment market has recently enjoyed a remarkable upturn, particularly in the office sector, where Q3 14 investment volumes increased 31% year on year. This compares to 2008/09 when the German economy was suffering from the consequences of the financial downturn and approximately just 15% of capital invested in European real estate found its way into Germany. Today, German bricks and mortar account for approximately one in four Euros invested in Europe.’
Savills notes that German office vacancy rates are at a ten-year low of 7.7%, while prime rents have reached a ten-year high at €27.70 per m2.
But this is driven by very low growth in supply, the firm says, rather than a surge in demand.