Focus on the North: Wilhelmshaven

As our travels continue to take us all over Germany, looking to bring you the best investments out there, so we have landed recently on the doorstep of a town called Wilhelmshaven, just a relative stone’s throw from our most successful market of 2012, Bremerhaven, again on Germany’s North Sea coast.

Wilhelmshaven has a great maritime history being inaugurated as the first German naval Port in 1869. It is still currently the largest site of the German Navy with 8,500 military and civilian employees in a city of 81,000 people. Big names supporting the civilian employment here are the French company Thales, who coincidentally just got the £600M contract for servicing all the British Royal Navy submarines over the next 10 years.

Wilhelmshaven has a deep water port with the greatest depth of water in Germany and is the largest oil transshipment port in the country. 72% of all German oil handling (via sea ports) and nearly 27% of Germany’s total crude oil imports are processed through Wilhelmshaven. From here the pipelines carry the oil to the refineries in the Rhine-Ruhr region and to Hamburg. The deep waters of Jade estuary shape the economy and is the basis for settlements of large holdings of the petrochemical, chemical, electricity, logistics and other maritime industries (ship repair yards, marine equipment, etc.).

The JadeWeser Port, named after the Rivers Jade and Weser, opened in September 2012, the first part at least, and the port is expected to be completed by September 2013. With this port, Wilhelmshaven received a ‘tide -independent’ container terminal, which unlike the likes of Hamburg can handle the largest container ships, fully loaded, at any time of the day. Further details of the port can be found here:

http://www.jadeweserport.de/nc/en.html

So I could waffle on more about the city, but let’s get down to the reason why you have all got this far, the properties, or the yield!

Well I am going to give you 2 more statistics before we take a look at some examples.

Looking at the table below, (please excuse my scribbles, I was only able to get hold of one copy) you will see that the number of purchase contracts on multifamily houses increased by 50% in 2012. Alright, the numbers aren’t high as there are probably this many exchanges a day in Berlin, but Berlin is not in the “Stealth phase”, like Wilhelmshaven and investors putting their money there are buying towards the top of the market.

The table below puts it into specific volume of sales in Euros, which was up by an incredible 136%!

Now we can get onto some specific property examples.

At a purchase price of 650,000 Eur, (540 Eur/sqm) this property has 15 apartments and 15 parking places and is a lovely looking building that is named after Queen Victoria’s daughter! The current rental income is 69,930 Eur/annum giving a yield of 10.76%. The property was fully refurbished in 2008 and 2013. Not bad, eh?

This property is located smack bang in the city centre. All footfall from the main car park comes past this building and is located next to the central train station. Therefore the 3 commercial tenants are fighting to keep the leases and the 21 residential units haven’t been vacant at all in recent times. At 2.4M Euro, it is not pocket change, but then it is in the city centre and where else can you get a yield of over 9% in a location like this?

For those of us, like myself, with a more modest budget there is still just a good a deal to be had. The property below is on the market at 515,000 Eur and has a 10% yield. Fully renovated in 2008, including new windows (80k), apartments (250k), the property is well located and delivers a very strong return, not to mention beautiful.

Once again, we think we have brought you another great market to invest in and those of you that missed the boat on Berlin, then Leipzig, we hope to see you there on an inspection trip here soon.

For more information, please do not hesitate to get in touch.

Thanks for reading,

James