UK and US most active foreign investors in Germany

MUNICH - The British and Americans are the largest foreign investors in the German property market, but their investment is declining relative to domestic players, according to a research report by DEGI. The majority of property investors in Germany are still, unsurprisingly, German, making up 37% of a total of EUR 41.2 bn property investment in Germany last year. The British were not far behind, however, being responsible for 29.7% (EUR 12.3 bn) of all property investments in 2005, followed by the US with 20.5% (EUR 8.5 bn).

So far in 2006, the Germans have been gaining ground on the other countries. In the first half of 2006, German investors were responsible for 44.8% of a total of EUR 21.34 bn property investment in Germany. The British share had dropped to 12.3%, representing EUR 2.62 bn and the US share was down to 7.1% (EUR 1.5 bn).

Meanwhile, German investors are putting their own money abroad, investing around EUR 11 bn in foreign property in the first half of 2006. This reflects a massive increase over 2005, when German property investment abroad totalled EUR 7.5 bn. Britain is the most popular country for German property investment abroad, attracting 32.5% of the total property investment in the first half of 2006. France was the next most popular destination with 22%, followed by Spain (6.4%) and the Netherlands (6.1%). Germany's eastern neighbour Poland came in fifth place with 5.5% of the total, followed by the US with 5.3%.

DEGI is the real estate investment arm of German insurer Allianz.

German investors prefer to put their money in European property. In 2005, 69.2% of German investment in property abroad (EUR 5.2 bn) went to other European countries, compared to 26.9% to North and Central America. A mere 5.9% went to Asia and Australasia.