Morgan Stanley becomes Germany’s largest real estate investor

Anglo-Saxon investment banks and opportunity funds are in the process of substantially deepening their commitments in Germany. The US investment bank Morgan Stanley has evolved, within a short period of time, into the by far largest real estate investor in Germany.

According to James Lapushner, head of the bank’s real estate investment business in Germany, Morgan Stanley has invested 9 bln euros in German real estate since December 1, 2006. Lapushner bases his optimism in regard to Germany on the size of Germany’s national economy, the superior infrastructure, and highly skilled labour force.

“We have faith in the German economy, and therefore have faith in German real estate,” he concluded.

Helge Scheunemann, head of Germany research at Jones Lang LaSalle, is quoted by the Frankfurter Allgemeine Sonntagszeitung as saying that some German cities manifest a shortage in large, well-equipped offices in top locations even now.

Unlike the – in some cases overheated – real estate markets in other European countries, the German real estate market is still in the early stage of its upswing, while even German fund managers are beginning to respond to it, the newspaper reported.

Matthias Danne, board member for real estate at Deka-Bank, assumes that the trend to sell German real estate is shifting. This view is shared, the article adds, by the managers of SEB Bank who will most likely launch a proactive Germany fund for institutional investors before the end of 2007.

In her article, Catherine Hoffman addresses the situation on the Germany real estate investment market, and the reawakening interest in investments in Germany that open-end property funds have begun to show.

She marvels over the fact that open-end property funds have intensified their commitments abroad and have reduced their investment quota in Germany at a time when Germany is considered the most attractive market for commercial real estate. She also cites figures according to which open-end funds sold properties in Germany worth Euro 10 bln (abroad 5.2 bln), but invested a mere Euro 2.1 bln in the acquisition of German properties (abroad 5.9 bln).

According to Hoffman, the main motive of the funds is the reduction of the Germany share in their portfolios, which dropped to 36.6% by the end of June, having stood at 58.2% just five years earlier.

 

Construction prices climb by 7%

 

The price index for the construction of conventionally built housing climbed by 7% in August compared to the same month last year, according to a report in Die Welt. The reasons quoted for the increase were higher material and energy costs, as well as the VAT hike, among others.

 

Berlin lags in housing construction

 

Nowhere in Europe is the number of newly completed apartments lower than in Germany, and nowhere in Germany is it lower than in Berlin.

Statistics published in the Süddeutsche Zeitung on October 19 show that while 16 apartments for every thousand residents are completed in Spain, and an impressive 21.3 apartments in Ireland, the figure for Germany is three, and in Berlin actually 0.9!