EZA 722: Briefing note: Germany

30 January 2006

Germany; Property Sector
German property funds’ crisis – heralding a new dawn in German properties? The closure of three German property funds with a current market value of € 9 bn – 10% of the total funds invested in this industry – for three months might cause a healthy shake-up of the industry On 24Jan the association of investment managers BVI presented a catalogue of measures to protect private investors which could have a major impact on market structures For the property market the consequences may be ambivalent: correcting valuations might exert downward pressure on property prices, while growing interest from international investors could work in the opposite direction As regards the impact on prices and building activity, the most likely scenario would be that the measures lead to a final shake-out, setting the base for a recovery in 2007

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© Graham Bishop