German property funds target Britain
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Regional shopping centres and office developments are the latest target of cash-rich German property funds DEGI, DESPA and CGI, the most active players last year in the UK commercial property market.
German property funds accounted for nearly pounds 1bn of purchases in 1995 and 1996, including such landmarks as the Lloyd's building in London for pounds 180m and the St Enoch shopping centre in Glasgow, also purchased by DESPA, for pounds 159m.
"There is still a lot of confidence in the investment market, and I am expecting German funds to be competing for some of this year's largest deals," said Angus McIntosh of property consultants Richard Ellis.
Property experts believe that the funds have now got a good base of high quality properties, mostly in London, and will seek to branch out into more regional retail and office developments.
The foray into UK property was originally a safety-valve measure to stop the cash element within the funds from rising above the limit imposed by their articles of association. As a result Germany has displaced both Japan and Sweden as the biggest foreign investor in UK property.
"These German property funds are still awash with liquidity, and their home market still does not look as good as the UK market," said David Basra of DTZ Debenham Thorpe. "With the good quality base they have got, the natural thing to do would be to expand their presence here in retail and venture further away from large cities."
Mr Basra added that the improving market would see more sellers come out of the woodwork, and investments in high quality buildings could still reap returns of more than 10 per cent in rent and capital appreciation, "which is respectable in a low-inflation environment".
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments