Thursday, 26 January 2012

German Consumer Climate Index up in January 2012

At the beginning of 2012 optimisme has returned to the German Consumer. Both the outlook on economic development and the wish to spend have increased significantly while income expectancy remains stable on a high level.

These are the main results of the lates monthly GfK (Gesellschaft für Konsumforschung) study for January 2012. While the January index value is at 5.7 it is expected to go up to 5.9 for February 2012.

This develoment supports the recent development in the rental market for Residential Property where rents have gone up significantly in 2011, especially in Berlin.


Wednesday, 25 January 2012

Ifo - German Business Climate Index January 2012 shows third rise in a row

Every month the responses of over 7000 businesses to the Ifo Business Survey, the confidence indicator frequently referred to as the Ifo Index is published. The January 2012 results show the 3rd rise in a row.

Ifo Business Climate Continues to Rise
Results of the January 2012 Ifo Business Survey

The Ifo Business Climate for trade and industry in Germany improved for the third time in succession in January. Although companies assess the current business situation as less favourable than in December, their business expectations have brightened considerably. The German economy has started the year positively.

The business climate improved in manufacturing. Manufacturers see their current business situation as slightly improved and their business outlook as clearly more favourable than in the previous month. Export expectations and personnel planning are also somewhat more positive once again. Capacity utilization in manufacturing is currently slightly lower than in autumn 2011. However, use of equipment and machinery remains above average.

In retailing the business climate index fell. The business situation here is no longer as favourable as it was in December. Moreover, retailers are more sceptical about their short-term business outlook. In wholesaling the business climate deteriorated slightly. The wholesalers surveyed continue to assess their current business situation as very positive, but less favourable than last month. Their business expectations are once again slightly more confident.

The business climate in construction improved for the third month in succession. The current business situation, however, is no longer as favourable as in the previous month. The constructors surveyed are nevertheless significantly more confident about their six-month business outlook.

Hans-Werner Sinn
President of the Ifo Institute

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Friday, 20 January 2012

Blow for Property Owners in Germany - Schlecker Insolvent

Germany's biggest drugstore / chemist chain "Schlecker" has filed insolvency.

"Schlecker" is operating many small chemist's shops in neighbourhoods rather that the big high street flag ships. They have larger shops in shopping centres as well but these usually have better coping mechanisms for replacing tenants.

For many property investors this insolvency will pose a problem as many of these shops are the only or one of few commercial units in predominantly residential apartment buildings. As there are not many other  potential tenants with a similar concept we expect pressure on the profitability of the properties hit by this event.

If you own a property with Schlecker as a tenant or are not sure, you should get in contact with your property management right now. If you are not happy with their performance in dealing with the issue we provide a performance improvement service to help you find an appropriate business partner with a good solid contract.