Metropolises in Germany now have the greatest potential for development in all of Europe, according to a new study. But, while this might be good news for investors, it means that tenants face higher rents.
Real estate investment volume over the past 12 months in Germany amounted to €68 billion.
That is a significant rise from the country’s investment volume recorded last year: €54 billion.
In the UK, on the other hand, investments have fallen from €66 billion to €64 billion.
The study also found that German cities are among the metropolises in Europe with the greatest development potential. Four German cities ranked among the top six locations for investment and potential for development in 2018: Berlin, Frankfurt, Munich and Hamburg.
Germany as a real estate location, especially Frankfurt, has benefited from the UK’s vote to leave the European Union, Eickermann-Riepe added.
But German real estate will likely have to pay a price for its increasing attractiveness. Experts interviewed in the study expect the highest rent increases in Europe to take place in Berlin, Munich and Hamburg.
London is the only city in Europe in which rent prices are likely to fall, the study found.
Interviewing 818 representatives from real estate companies, investment managers, property developers, institutional investors, lenders, exchange-traded property funds and property developers across Europe.