GERMANY - The German residential sector is showing significant strength with a spate of new construction activity happening across the board thanks to the improved economy and lower unemployment rate, according to BulwiendaGesa and WGF.
In the residential segment, the highest rent increases for 2010 occurred in Berlin (6%), followed by Hamburg and Munich (5%) and Düsseldorf (3%).

The investment volume of residential portfolio sales increased from €3.3bn in 2009 to €3.8bn in 2010.
The survey noted that hotel real estate in Germany was performing better than other European cities due to growing tourism and a gradual pick-up in business travelers, which has contributed to higher occupancy rates.
In 2010, the transaction volume in the hotel industry nearly doubled from the previous year to reach €800m.

Foreign investors in German hotel investment market accounted for 63%, up from 21% the year previous.
In Frankfurt, revenue per available room increased by 20% year-on-year in 2010.

The study showed that the economy and mid-range hotels, which have better price-to-performance ratios, are benefiting in particular from the increase in occupancy rates.

In addition to A cities, a similar resilience is noted in B and C cities.
Meanwhile, the trend in office and retail markets remained stable. In the last quarter of 2010, turnover increased by 9% compared with the previous quarter. Among the cities, Berlin offered the largest amount of office space at 18.4m square meters.
In the retail market, rents remained largely unchanged from the previous quarter.

The highest prime rents were in Munich (€285), Frankfurt (€245) and Hamburg (€225). Düsseldorf and Hamburg registered slight increases in rent. 

BulwiendaGesa and WGF said retail real estate gross turnover was expected to reach about €407bn for the whole of 2010.