Chinese buyers snapping up 'safe' German properties
Real estate agents report surge in investors buying commercial and residential assets in a country valued for its stability and legal standards
Since Chengdu native Li Yi made Germany his home 11 years ago he has witnessed a gathering tide of interest among Chinese investors following in his footsteps.
Now general manager of machinery and industrial equipment company Likotec, Li is currently in discussions to buy the factory building he has been renting in the town of Oberstenfeld, north of Stuttgart.
"German real estate retains its value. Compared to the United States, Germany is more stable," he said.
He is not alone in his view, and commercial property brokers report a steadily increasing number of inquiries from Chinese clients, both those living in Germany and their homeland. Some are purchasing commercial properties as a safe haven for their cash. They are entering a market that is already gaining popularity.
Investment in residential property in Germany rose 84 per cent to €11.25 billion (HK$108.5 billion) last year compared to a year earlier, according to a CBRE report. The first quarter of this year saw transaction volumes fall by 36 per cent to €1.66 billion compared to the previous quarter due to short supply, but that was still the highest quarterly result since the Lehman Brothers minibond crisis of 2008.
Net yields in the first quarter were 3.7 per cent for prime newly built apartments, and 4.6 per cent for existing units.
