Germany continues to be rated as one of the top property investment markets for 2010. In fact: the number of people sharing this view has risen to 80% from 66% last year. This is one of the key findings of Ernst & Young Real Estate’s annual trend survey of some 100 companies and investors. That said: another finding was that over 80% of the respondents do not believe the market has bottomed in terms of demand, space, and payment behaviours.
Survey participants included banks, closed-end real estate funds, real estate stock corporations/REITs, institutional investors, investment companies, opportunity/private equity funds, insurance companies and residential real estate companies.
'Although the transaction volume is set to increase for the first time since the beginning of the crisis, major commercial portfolio transactions and distressed sales are currently not anticipated,' said Hartmut Fründ, Managing Partner of Ernst & Young Real Estate GmbH. 'The market is still going through a period of consolidation,' he added.
Other statements from Ernst & Young partners confirmed what we said in yesterday's post; that residential property (buy to let) is attracting more attention from institutional investors than it has for years.
Partner Christian Schulz-Wulkow said that the residential sector is currently very popular: 'Residential property entails less risk and it has become a considerably more attractive proposition for institutional investors,' he said.
Another finding that was particularly interesting, was the fact that only a minority of those surveyed expected sovereign wealth funds and banks to be active buyers in 2010. In 2008 these buyer classes were among the most active in the German market -- especially in Berlin. The majority believe that family offices and institutional investors, most notably insurance companies, special funds and open-ended funds, will continue to be key buyer groups in 2010.
Opportunity and private equity funds, real estate stock corporations and international funds are seen as the biggest seller groups in 2010. Non-property companies and the public sector will make occasional sales only, according to the majority of respondents.
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