Japanese seen entering German market next

MUNICH - The Japanese will soon enter the German property market in the wake of the current wave of American and British investors, according to Robert Aisner, president and chief operating officer of Texas-based Behringer Harvard Real Estate Investments. 'I believe the next wave coming in to Germany will be the Japanese,' said Aisner speaking at a session on international investors at the Expo Real trade fair in Munich this week. 'They tend to follow, we’ve seen that in the US.'

Robbin Herring, director of Citigroup Property Investors, feels that 'pretty much all investors are already in the German market'. 'What we will certainly see, though, is more German investors coming into the market again,' he said.

Asked which areas of Germany Behringer Harvard Real Estate Investments is interested in, Aisner said: 'Geographically we go where our partners have expertise. In general I would say there is a movement to start looking at the former eastern parts of Germany and further east. There’s going to be a lot of interest there in the belief that, over time, value can be created as those economies start to come back and perform well.'

Citigroups Property Investors is not convinced, however. 'We're still very careful about eastern Germany,' Herring said. He also urged for greater caution to be exercised during the growing number of property auctions currently taking place in Germany, adding that the quality of preparations varies 'hugely'. 'We've never seen before what is happening now in Germany,' he said. 'Some 30 to 40 portfolios and deals are being worked on at the moment. Four years ago, you could count them on one hand.'

Citigroup has become 'very careful' about entering auctions, he said: 'It' s very difficult to assess the probability of winning even if you pay good prices. That' s why we very much like to do one-to-one deals, or enter into situations where after a short while we have reached agreement on what the deal should be, and then we’re given four weeks to close the deal.'

Aisner emphasised the importance of working with local partners. 'We would not do anything without a local partner,' he commented. 'I always get nervous when someone says to me there’s a fabulous deal in Munich and they’re looking for somebody. I wonder why they're coming to Dallas, Texas and they can’t find anybody who wants to do the deal in Munich. With local partners who are putting equity in as we are, I don't have that worry.'