Five things you need to know about investing in Germany

Strong, steady and economically sound, it is hardly surprising that Germany is one of mainland Europe’s most attractive investment options. But how easy is it to make a play? And how can you make the best return on your investment in an increasingly competitive market? Stefanie Kern, real estate partner at Hogan Lovells in Munich, reveals her top tips

1. Invest outside of the top seven cities

Although the German top seven cities (Berlin, Düsseldorf, Frankfurt, Hamburg, Cologne, Munich, Stuttgart) are still the most popular places to invest, cities such as Augsburg, Hannover, Leipzig and Nuremberg have become attractive alternatives for investors in the past few years. Although local and international investors already invest in such “B cities”, many investors currently include only the top seven in their investment profiles. So on the one hand, due to the growing market for real estate investments in B cities, there should be adequate sales options in future; on the other hand, you will still find a less competitive environment than in the top seven.

2. Consider investing in value-add properties

As core properties are rare, investing in value-add properties and redeveloping them can be a good alternative. Of course, this strategy requires local development know-how. If you do not have a local team, you will require a local partner. Instead of concluding a project management contract with a local developer, you could consider a joint venture, which have become increasingly popular in recent years as they have the clear advantage that agreeing on a profit…

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