Never ending boom? Favourable conditions are attracting investors

• Interest for German property from domestic and international investors alike may well continue for some time. With bonds still relatively unprofitable, there remains a vast amount of global capital seeking investment in real estate. Moreover, Germany’s role as a safe haven is being further strengthened by unpredictable developments elsewhere in the world.
• The logical consequence is that competition among investors for German property will further intensify, maintaining significant pressure on yields. However, in view of the reversal in interest rate policy, at least in the USA, the era of yield compression is coming to an end.
• Investors seeking stable rental income continue to focus on office and logistics properties as well as hotels and other 'alternatives’. In the office sector, there is a noticeable trend of “suburbanisation”, whereas B-cities are struggling to gain any traction.
• While investors are expanding their search profiles for offices and certain other sectors, they are becoming more cautious when it comes to retail property.