The acquisition of German retail property has increased two-fold during the first quarter.
The demand for stable returns has seen the total purchases rise above that of the UK, the first time since 2012. Investors purchased German malls and shops to the value of €3.43bn during the first three months. David Hutchings, the head of Cushman & Wakefield’s Europe, Middle East and Africa investment strategy, stated that this is 116% up from a year ago. The purchases in the UK increased by 27% to €3.73bn, Bloomberg says.
Hutchings stated that the stability offered by Germany is the main attraction. It is a safe market with low volatility. Most investors consider that growth obtained from good quality retail will see an increase in the future.
Money managers, pension funds and insurers are investing in German commercial properties to boost returns in the fixed-income market. The prices of retail assets are set to increase as the supply dwindles.
Hutchings stated that the surge which placed Germany ahead of the UK is due to two large deals. The largest was Unibail-Rodamco SE (UL)’s €535m for a part in the CentrO centre in Oberhausen.
22 MAY 2014, Germany
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