'Munich is hot, Berlin has yet to boil'

MUNICH - Hamburg and Munich are the two favourite German cities in the eyes of property investors at the moment, while Berlin and Frankfurt are seen as more challenging markets, according to Richard M. Rosan, president of the Urban Land Institute (ULI).

International property investors are more enthusiastic about the German market than they have been for years. In contrast, German investors are more pessimistic than their international colleagues, fearing that the current upturn in the country's property market may prove short-lived. 'Foreign investors have blind faith. They are willing to invest and wait it out like they did in Japan,' Rosan told a press conference at the Expo Real commercial property trade fair. He was presenting a brief sketch of some of the findings of the German Capital Markets Forum.

The forum, held at Expo Real on 23 October, brought together senior executives from Germany and international investors to examine the major issues facing the real estate sector in Germany in 2007. The attendees discussed a range of topics. These included the impending introduction of German REITs and their potential impact on existing open-ended property funds, the international appetite for German property portfolios and the influence of the German capital market on the international stage. The full findings of the forum will be published by ULI at a meeting in Paris next February.

ULI was founded in the US in 1936 to provide 'responsible leadership in the use of land to enhance the total environment.' It has head offices in Washington and London and over 28,000 members, of whom at least 20% work in government, academia, or public-private partnerships. Most of the rest are involved in the real estate and urban development industries.