Newsletter March 2010

Posted on January 25, 2014 by Gareth in Newsletters
















 
 

March 2010 Update
Welcome

I’d like to welcome you to the monthly update from ProVenture, especially if this is your first issue.  We hope you find this short newsletter of interest and that it keeps you up-to-date with the property investment scene in Germany.

 
Please click on the following titles to read the content or scroll down to read the whole newsletter

  
 

 
  
 
FX Update

 

 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
  

 
German Economic Outlook
 

  

The Ifo Business Climate for industry and trade in Germany clouded over somewhat in February. For the first time in ten months, the business climate index has not risen. Responsible for this decline is especially the situation in retailing, which experienced a setback in February. On the whole, the firms have assessed their current business situation somewhat more unfavourably than in the previous month. They regard their business outlook for the coming half year slightly more favourably than in January. The economic recovery is expected to continue when winter is over.

In manufacturing the business climate index remains largely unchanged. The survey participants are marginally more dissatisfied with their current business situation than in January. However, with regard to business developments in the coming six months they are again more confident. They expect clear stimulus from export business. The industrial firms intend a clear slowdown in the pace of staff reductions.

In the two distribution sectors, wholesaling and retailing, the business climate has cooled noticeably. The retailers report a considerably worse business situation than in January. Also their business outlook for the near future is considerably more pessimistic than previously. In wholesaling the business climate index has not fallen as strongly as in retailing. The surveyed wholesalers are also clearly more dissatisfied with their current business situation, but they are less sceptical regarding the six-month business outlook than in January.

In construction the business climate index has risen once again. The surveyed contractors have assessed their current business situation somewhat more favourably than in January. However, current construction activity is strongly constrained by weather conditions.

Included for interest below is the graph showing the business climate over the last decade, divided out to show Saxony, East Germany and Germany as a whole.  The recent uplift in Saxony [over past 18 months] is significant.
In terms of property forecasts in Germany, from Ernst & Young:  

A vast majority of investors and companies believe the German real estate investment market will remain attractive in 2010, with the number of people sharing this view rising 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. However, over 80% of those surveyed believe the crisis has yet to bottom out in terms of demand for space, rents and payment behavior.

 

 
 
Finance Update     
 
According to Coutts Financial, the Greek debt crisis has produced independent euro weakness.  While the break-up of the eurozone remains a distant possibility, the direct and indirect costs of bailing out the Greek government will continue to weigh on the euro. A bail-out would represent an additional injection of euros into the market, while the tighter fiscal policy required of the Greek and other national governments further postpones any potential tightening of monetary policy. Coutts do not forecast an interest-rate hike by the European Central Bank within the next twelve months.
 
With a compelling desire to keep the members of the Eurozone together, Germany stands by to provide whatever assistance the German people will countenance, either on its own or through the Eurozone as a whole, and the yield on Greek bonds is now falling.  However, turbulence should be expected in this coming month as the government debt issues of the most heavily-laden states plays out, in the backdrop of the tentative recovery.  Those investors looking to move currency in the next 4 weeks may well choose to take a forward contract for at least part of their transaction to minimise the risk on their trade.

 
 

  
 
 Researching German House Prices
 
With many parts of Germany having a more limited sales market, due to lower owner-occupation levels, house price data can be much harder work to obtain.  At the link to our blog post below, we discuss some methods that we at ProVenture use to determine sales prices down to individual street level in the cities in which we operate:
 
 
 

 
ProVenture Activity   
 
Typically, this is the coldest and darkest month of the year in Germany and this year did not disappoint! In Berlin, the constant 15 cm of think ice on the city centre pavements stayed with us for the whole of January and February, unseasonally cold. Despite this, we hosted 8 intrepid investors in Berlin and Leipzig this month, which is far busy than we had anticipated and the second busiest month on record. In terms of new property brought to the market, we have had some difficulty finding a large selection of good property within our investor’s typical yield criteria this month. Perhaps this is a sign of seller’s gaining confidence in 2010, a pattern we shall watch and report on. We did find some offers that we feel could be of interest, both in Leipzig and Berlin. Hopefully the new releases below are of some interest to you as you research the market. 
 
Keep up with our activity more regularly and also get sight of new property releases (or price reductions) first at our twitter feed:
 

 

 

Free Book!!

 
We have a limited number of copies from the first print run of our book “Your Life in Property” available for our newsletter subscribers and can will mail out to you for free, if you are quick. The e-version of the book is at:

 

Please let us know by email your name and postal address should you wish to claim a copy:

enquiry@proventureproperty.com

 

 

 
 
 
 
Latest Property Offers
 

 

Below are links to some of the new property brought to the market during February. More property in Leipzig, Halle and Berlin will be brought to the market during MArch so please monitor the website.

 

 
Happy investing and good luck,
 
Mat
 
 
 

 
 
 Berlin Tiergarten (MItte)
 
Complete Block
 
10 Units
 
Renovated 2007
 
Call for More Detail 
 

 730,000 Euro

 
7.2% Net Yield
 
Rent Increases Possible
 
705 Eur per sqm 
 
Call for More Detail 
 
Leipzig
 
Complete Block
 
7 units
 
Fully Renovated
 
Call for More Detail  
 
 200,000 Euro
 
10.03%
 
Fully let
 
520 Eur per sqm
 
Call for More Detail  

 
  
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 

 
 
 
 Leipzig
 
A selection of 7 units
 
A choice of vacant or tenanted
 
Good condition
 
Call for More Detail  
 
 
 Prices from
 
26,000 to 35,000 Eur
 
Yields 10%
 
 
 
 
Call for More Detail 
  

 

 

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