German deal volumes seen hitting EUR 20-25b in 2012

Germany is forecast to see robust real estate investment in 2012 thanks to its perception as a safe haven amid the eurozone sovereign debt crisis.

Property advisers have predicted a full-year volume for Germany of more than EUR 20 bn this year, with DTZ publishing a range up to EUR 25 bn. The higher end of the range would be an increase of roughly 8.6% on the EUR 23 bn-plus recorded in 2011.

Jones Lang LaSalle recorded a total volume of EUR 23.5 bn for 2011, which the broker said was 22% higher than the 2010 figure.

'This transaction volume could also be maintained in 2012. At present, we are in no way expecting an investment "ice age",' said Helge Scheunemann, head of research at JLL Germany.

International investors, keen on the safe haven provided by the buoyant German economy, accounted for a third of the market

The German economy, JLL noted, appeared increasingly immune from the 'hysteria' surrounding the euro and sovereign debt crisis. Companies, surveyed for the leading Ifo-index remain confident and German consumers have not stopped spending.

Both domestic and international real estate investors focused heavily on core assets in order to minimise their risks. DTZ said this will remain the case in 2012, though supply and demand will drift further apart. Despite several open-ended fund groups liquidating funds, the supply of core assets will be limited.

On the other hand the supply of core-plus, value-add and opportunity products will increase, DTZ said. Banks will increasingly offload assets with financing difficulties, contributing to an increase in supply of different quality assets.

PropertyEU's first investment briefing event examines whether Germany is really a safe haven for real estate investors or a new bubble in the making. The free event takes place in Amsterdam on 23 February. Click on the link below for more information.