Jena (Thuringia, Germany)
Fully let new (2000) warden assisted Retirement Home with 65 apartments, 7 tenant related commercial units (physio therapy etc.) and 8 underground parking spaces. Actual net rent 228,000 € p.a.. Price 3,575,000 € factor 15.67, net yield 6.38%.
Get details on www.Properties-in-Germany.de
Zwickau (southwest Saxony), Fully let and renovated 1900 Apartment Building with 7 apartments, 1 commercial unit (medical practice) and 10 parking spaces, 3 in a garage. Actual net rent 39,464 € p.a.. Price 365,000 € factor 9.25, net yield 10.81%
Get full information on www.Properties-in-Germany.de
Kesselsdorf, a Dresden Suburb 16 km away from the central train station (16 min. via motor way). Fully let 1996 Apartment Building with 13 apartments, 16 parking spaces. Net rent 62,695 € p.a.. Price 819,000 € factor 13.0, net yield 7.65% (plus commission)
Property Details on www.Properties-in-Germany.de
Leipzig Plagwitz, Fully let Apartment building with 13 apartments 1 commercial unit and 6 parking spaces. Actual net rent 52.264 € p.a., price 670,000 € factor 12.8, net yield 7.8%(plus commission).
More information on www.properties-in-germany.de
The Ifo Business Climate Index for industry and trade in Germany has risen slightly in February. The companies have assessed their current situation even more positively than in January. The outlook for the coming six months has worsened somewhat, however. On the whole, the economic situation of German industry and trade is robust, but the expectations continue to point to a cyclical weakening.
In manufacturing the business climate indicator has fallen marginally. The firms have assessed their current situation somewhat more favourably than in January. With regard to the six-month outlook, however, they are less confident. Also their optimism regarding exports has weakened. But their hiring plans point to a further increase in staff levels in the coming months.
In the construction industry the business climate has clearly worsened. The firms have assessed their current business situation more unfavourably than in January and are also less confident regarding the six-month business outlook. In wholesaling the climate indicator rose slightly. Current business has again been assessed somewhat more positively, but the surveyed firms are less confident regarding future business. In retailing the index has risen clearly, however, with firms assessing their current situation considerably more favourably than in January. The six-month outlook has also improved.
Leipzig has been the target of many international property investors over the last 24 months. Here are some of the hard facts why Leipzig has attracted over 1.6 billion Euros in investment capital during 2006 alone.
The economic situation in Germany and especially in Leipzig is positive with the prospect of at least mid-term prosperity. The property market has three main drivers for income improvement:
1. Positive population development accompanied by new jobs.
2. Reduction of vacant apartments by demolishing ca. 20,000 "outdated" apartments by 2010.
3. Active owners interested and acting on improvement of their rental income situation.
But as you know just being in the right region or city does not guarantee that the property offered is actually in a good location. This article will show the current rent structure in Leipzig and some of the sought after locations and which ones are on the rise. For background information on the economic development of the region and the current situation please refer to the details at the end of this article*).
The Leipzig Residential Property Market
The City of Leipzig has an official rent table which is dated 2005. A new one is being established in 2008. The current rent levels are from market research carried out by HVB and Eurohypo, two leading German property finance banks.
The rent level for renovated, medium standard and medium size apartments (70 sqm) is on average at 3.85 Euro per sqm in pre fabricated blocks and 4.40 -- 4.70 Euro per sqm in blocks built before 1945. For inner city prime locations the rent per sqm for the same standard and size is at 6 -- 7.50 Euro per sqm. Small apartments up to 45 sqm generate the highest rent in all categories and are on average at 5 Euro per sqm.
The rent table distinguishes locations between "Very Good", "Good", "Medium" and "Basic". The spread in the rent level for new rentals in these categories are:
Very Good: 6 -- 7.50 Euro per sqmLocations being categorized as "very good" can be found in City South, Gohlis, Schleussig, Leutzsch to name a few. Rents in good standard modernized period buildings are rising. Especially in preferred areas like Waldstrassenviertel, Musikerviertel, Bachviertel, Schleußig and Gohlis-Süd an increase in rent of 10 to 15% over the next 2 years is expected.Good: 5 -- 7.50 Euro per sqm
Medium: 4 -- 5 Euro per sqm
Basic: 3 -- 4 Euro per sqm
The good and very good locations mentioned above are only specific regions within the districts named and they can be right next to an area that is considered basic. So it is very important to have reliable information about the actual micro location of a property. I have yet to see an agent's exposé declaring the location of his offer as being basic. There are maps and street registers available that are based on statistics developed for the official rent table (Mietspiegel). This rent table plays an important role in German residential rent legislation. It is the main legal basis for raising the rent in existing contracts.
Next to the factor location there is a growing trend towards smaller apartments for single occupancy, especially near the university and other teaching institutions. Even though they achieve the highest rent an investor has to keep in mind that from experience these smaller apartments have a higher turnover with the risk of temporary vacancy and renovation cost.
*) What makes the Leipzig Residential Property Market so interesting? By Uwe Falkenberg
The author is a Berliner and active in the German property market for more than 25 years. Experienced as project manager, developer and head of the German Business for a UK based property consultancy he now owns and operates Berlin Portfolio Ltd His international background and local expertise is an ideal combination for an international investor. For Property Search we recommend Properties in Germany
The economic environment
The outlook for the German economy is positive and the economic upturn is continuing. 2008 will see a change from purely export driven growth to more growth support through domestic demand. For the first time in years significant raises in salaries are currently negotiated and the consumer climate can be seen as friendly. This will be associated with further reduction in unemployment, as companies are prepared to take on staff. Growth in the economy can be expected to stimulate the German property market.
The Local Aspect
Many of the major investments went into the federal state of Saxony with the main focus points in the state capital of Dresden and the traditional economic center of Leipzig. With regard to the economic growth Saxony has pushed Bavaria off the first rank amongst the German states.
BMW has opened a new production plant near Leipzig, Porsche is extending their capacities to produce a 4-door-sedan and DHL the logistics subsidiary of the German Post has decided to develop their new logistics turntable in Leipzig at the Halle-Leipzig-Airport which will be operational in 2008. Here investments will be 300 Million and will directly create 3,500 jobs with another 7,000 indirectly related jobs and another 10,000 in the car sector.
The German Property Market
Germany has seen a major influx of international capital to its property market over the last 2-3 years with record year 2006 which was considered a record year still being outranked by 2007. The year 2008 is seen by most market players as a year of consolidation. Increasing numbers of institutional investors will become sellers which should offer interesting opportunities for smaller and private investors as it is unlikely that all sales will be in large packages.
Leipzig is one of the few places in former East Germany with a positive population development which is expected to keep going at least until 2012. At the same time the city runs a program to demolish old unsuitable pre-fabricated housing blocks and thus take pressure from the residential market. It started out with 1,000 apartments in 2006 and will be continued until 2010 with a goal to reduce by 20,000 apartments. The statistical vacancy rate in 2005 was at ca 16% but half of these were not accepted by the rental market and did not constitute a competition for prospect tenants reducing the market active vacancy rate at its highest in 2005 to 8% (EUROHYPO).
In 2006 over 1.6 billion in property value were traded in Leipzig out of which 26% were apartment blocks. The figures for 2007 will be slightly higher with approximately the same share of residential buildings. The vast majority of these apartment blocks were bought by foreign investors with an investment perspective of 5 to 10 years. The objective is to improve the rent and drive yield and value. This will push for an increase in rents.
Conclusions
The economic situation in Germany and especially in Leipzig is positive with the prospect of at longer lasting prosperity. The property market has three main drivers for income improvement:
1. Positive population development accompanied by new jobs.
2. Reduction of vacant apartments by demolishing ca. 20,000 "outdated" apartments by 2010.
3. Active owners interested and acting on improvement of their rental income situation.
This looks all very positive but there are still many investments on offer you should stay away from. With a follow-up article I will provide information about the rent in different parts of Leipzig and vicinity. You will find this article on the Property Investment in Germany blog.
The author is a Berliner and active in the German property market for more than 25 years. Experienced as project manager, developer and head of the German Business for a UK based property consultancy he now owns and operates Berlin Portfolio Ltd His international background and local expertise is an ideal combination for an international investor. For Property Search we recommend Properties in Berlin
Why Leipzig? Leipzig is next to Dresden the main economic hub in the state of Saxony. Saxony has seen the strongest economic growth in all of Germany, West Germany and ex East Germany combined.The property is located in a sought area of the Center South within walking distance of the city center. Public transport, shops, schools etc..
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Call Center Science 2008: Germany Europe’s Largest Contact Center Market
21.01.2008
Leipzig – The German-speaking market consists of an estimated 100 million consumers and is Europe’s largest. Germany offers the most advantages to companies seeking to best serve their German-speaking clients. Investors, executives and journalists can find more information about Germany’s contact center industry at Call Center Science 2008 in Leipzig, Germany from January 22-23, 2008.
Leading companies, such as Transcom, Telekom Italia, and ebay know the importance of effective consumer communication. Their investments in Germany’s contact center industry are examples of this industry’s significant growth in recent years - ten percent annually over the last ten years. Invest in Germany, the inward investment promotion agency of the Federal Republic of Germany, has supported many international companies, such as Dell, Transcom, and SNT establish branch offices in Germany.
Having a strong staff is essential in the contact center business. Germany’s workforce is productive, customer-oriented, and willing to learn new skills. The recent establishment of a practical and theoretical training program in “Dialogue Marketing and Sales” is raising the industry’s profile and ensuring the availability of top personnel.
Affordable real estate, in both urban and rural locations, and qualified employees are not Germany’s only benefits. There are also financial incentives available in certain parts of the country, mostly eastern Germany, that sometimes encompass 50% of investment costs—making investment conditions in Germany even more favorable.
Contact centers now contribute over 450,000 jobs to the German economy, and this number is expected to more than double in the coming years, as more international companies see Germany’s investment potential.
Invest in Germany is the inward investment promotion agency of the Federal Republic of Germany. It provides investors with comprehensive support from site selection to the implementation of investment decisions.
Media Contact:
Eva Henkel
Invest in Germany
Phone: +49-30-200099-173
Fax: +49-30-200099-111
Email: henkel@invest-in-germany.com
www.invest-in-germany.com
Created:4 February 2008,
Written by: Claer Barrett
Grainger , the regulated residential landlord, has increased its exposure to the German rental market by acquiring a controlling stake in FranconoRheinMain AG, emphasising that property professionals still see value in some European markets. ...more on Investors Cronicle
BERLIN (AFP) — Some of the cheapest housing of any major European city is attracting a wave of foreign buyers to the German capital, promising a new property boom after a false start after the fall of the Berlin Wall nearly 20 years ago.
Buyers from Britain, Scandinavia, Ireland and the United States are leading the rush to snap up flats in the once-divided city, making the 12 months up to November last year the busiest on the property market since World War II, estate agents say.
Foreigners were responsible for 70 percent of the transactions, the German federation of estate agents said, with Danes spearheading the march. The interest is so high that Danish estate agents have opened offices here.
One Danish agent, Esben Tjalvi, said Danes found the prices too good to resist.
"At 1,500 to 2,000 euros (2,200 dollars to 2,950 dollars) per square metre, it's up to four times cheaper than in Copenhagen and Stockholm," Tjalvi said.
"People are buying what they can't afford at home."
But private buyers alone do not account for the eye-popping 28-percent rise in turnover in the first half of 2007 -- that is thanks to the muscular presence of investment funds, once a rare feature in the Berlin property market, that are snapping up dozens of apartment blocks.
Cerberus Capital Management and Goldman Sachs' Whitehall fund have invested 2.1 billion euros since 2004.
"In Berlin, the price per square metre is one of the cheapest of any major city in Europe, including those in eastern Europe," said Andrea Magnoni, the Italian co-founder of the Valore fund.
"The return [yield] for investors is higher than anywhere else at between seven and eight percent compared to 3.5 percent in Milan because even if the rents are moderate the purchase prices are always low enough to guarantee a good rate."
Investors are speculating on rents rising.
"In the rest of Europe, 50 to 60 percent of people's salaries goes towards rent. In Germany, it is about 20 percent," Magnoni said.
The influx of investors to Berlin is having a marked effect on the landscape of the city.
Whole streets are being renovated without the city authorities having to dig into their already massively stretched finances. The decrepit flats with coal-fired heating and toilets on the landing are disappearing and new shops are opening where they were once rare.
This in turn is creating jobs, not only in the property sector but also in the building trade.
But Berliners fear that the property boom is threatening to change the character of a city that has always had a more alternative feel than its German, and many of its European, counterparts.
The once rare occurrence of tenants forced to leave so that the owner can raise rents is now becoming more common, some say.
And new luxury blocks of flats are mushrooming on the choicest roads, with prices well beyond the reach of most residents in a city where 11 percent of the population is unemployed and thousands of students and hard-up artists make their home.
Investors would also do well to remember that many people lost heavily after betting on sharp price rises after the Berlin Wall came down and communist rule disintegrated in 1989. In fact, prices fell.
Andrea Magnoni says investors back then were motivated by the promise of big tax breaks instead of solid economic reasons.
"But today the market is underpinned by genuine economic growth," he said.
The gap between supply and demand in the Berlin Property Market keeps growing. According to the Housing Market Report Berlin 2016...
