Sentiment in Germany's real estate industry is surging in the wake of upbeat data on the national economy, property advisor King Sturge has reported.

Sentiment in Germany's real estate industry is surging in the wake of upbeat data on the national economy, property advisor King Sturge has reported.

The monthly King Sturge Real Estate Economy Index booked another increase for the poll-based Real Estate Climate survey in July, up 6.4% to an absolute score of 110.7 index points (up from 104.0 last month). This outcome matches almost exactly the figures that the Real Estate Climate reported at the very start of the survey in January 2008.

King Sturge said that positive sector ratings were driven mainly by the Investment Climate, which at 121.6 points reached its highest level in the history of the index (up from 117.0 the previous month). This indicator for acquisition and investment decisions returned its fifth positive rating in as many months. For the first time since mid-2008, the 1,000-odd market players are optimistic about the market prospects for floor space demand and rent rate development. The Rental Income rose from 91.6 to 100.1 points, with the 100-point threshold representing a majority of positive votes.

Aside from the sentiment indicators, July also saw the Real Estate Economic Situation - an index based on the statistical analyses of DAX, Dimax, ifo Business Climate, and interest rates - regain the level of January 2008. Having softened slightly for two months, it showed a 8.6% growth in July by scoring 193.3 index points (compared to 178 the month before).

'Quite evidently, market players are very optimistic again,' said Sascha Hettrich, managing partners of King Sturge Deutschland. 'They are convinced by now that the crisis is not just overcome, but that the real estate economy will emerge from it reinvigorated. There is almost no other way to explain the just about euphoric sentiment.'