Investors advised to explore secondary locations in Germany

Secondary locations and alternative assets in Germany are showing strong potential for growth and returns for investors, a panel of experts has said.

An audience of real estate professionals gathered in London were told that there are now up to 15 cities outside of the ‘big six’ of Munich, Hamburg, Berlin, Dusseldorf, Stuttgart and Frankfurt where investors should look for opportunities to place their money.

The comments were made during the PropertyEU German Investment Briefing, held at the central London offices of Colliers International recently.

In the office sector SEB Investment head of real estate investment Nils Hubener said that investors would be unwise to only look at the top six German cities for investment opportunities in the current climate. He said: ‘It’s really important in Germany not only to look at the top six. Half of investment happens in the big six, but that means that half of it happens outside and that’s quite a lot.

‘If you go over and above those markets you have another 10-15 markets that we think are very interesting that could also be very interesting to international investors. They are core markets in themselves, they’re often very defined locations and they come from a very low rental level’.

Spreading investment around the rich German market, the audience was told, was a way to ensure a mixed performance of returns on the short and long term, and take advantage of Germany’s ‘polycentric’ structure.

Colliers International head of investment Germany Ignaz Trombello said: ‘It’s the mix in a portfolio which gives you security, long-term vision and a good return. I would not only invest in the prime cities. If you want to have higher returns you also need to look into cities like Essen, Dortmund, Manheim, Nuremberg, and also some cities in the ‘New Country’ in the Eastern parts like Dresden and Leipzig’.