On top of that, a large geographic diversification is added to the mix: on the macro level, capital flows — both in- and outflows — are becoming more global. On the micro level locations are moving into the focus of international investors that hardly anyone ever thought of before. Germany is a good example: Here, it is not just the “top five” cities but for example also Rostock, Oberhausen and Kempten are cities that international investors have added to their map. It is not necessary just for portfolio purchases, where mainly retail or residential real estate in such locations are included, but also through individual transactions. In other words, the so-called secondary cities have good chances in 2007.

Consider the commitment of international investors in Germany: Bradley A. Olsen, President of Atlantic Partners Ltd. in Cary, North Carolina (USA) remembers: “Several years ago we discussed Germany in an international context at a panel in the conference programme of EXPO REAL. Everyone mentioned Germany, but no one actually invested. Meanwhile, it has turned around. Everyone is investing here, but do not necessarily mention it. Germany is the centre point.”

Europe’s former lame duck has become the favourite of international investors. As long as yields here remain above the capital market interest rates, this trend will continue. Brad Olsen is also convinced that this high international attention is leading Germans to believe more strongly in their own country. “It is even more impressive that the Germans are also investing in Germany again. A few years ago my German colleagues told me I was crazy for predicting an increase in international investor’s interest here. Meanwhile, Germans themselves believe in their market.”

Photo: The trends in 2007 were discussed at EXPO REAL (from left to right) by Holger Naumann, Managing Director, DB Real Estate, Andreas Schiller, Publisher, Immobilien Manager and Editor-in-chief, Europe Real Estate, Frank Lamby, Member of the Board, Hypo Real Estate Holding AG, and Bradley A. Olsen, President, Atlantic Partners Ltd.

This location indeed offers some additional opportunities. Frank Lamby, Member of the Board of Hypo Real Estate Holding AG, summed it up at EXPO REAL: “For us, the market in Germany is characterised by three key drivers: first, privatisation, which the government is forced to do because of budgetary deficit and a watch-list status in Brussels. Second, we have observed with German companies a strong tendency towards selling non-core assets. Third, we see thriving new building construction activities, especially in the congested areas.” For the real estate market, these ‘drivers’ are positive, according to Frank Lamby’s estimation: “We verify a very active market, where many transactions are performed, and we believe that this development will continue in the next three to five years.”