Newsletter January 2012


German Property For Sale – Where does investor confidence come from – January Property Market Update


     

January German Property Update

 

Welcome

Happy New Year and welcome to our German Property market update. In this edition – In addition to some new property offers, we examine look at indicators that give us confidence as investors.

As ever – please contact us if you would like any more information and we wish you a successful 2012

 

German Property in the News

German property market remains strong – HiFx article

German Economy Grows by 3% in 2011 despite Euro crisis

Having The Confidence – When Others Do Not

I often have discussions with investors about where the “next place” to invest is and why we are investing and consulting in the areas in which we do. This conversation becomes all the more interesting when you talk to locals, either investors in the area or just folks that have followed market conditions for a good while, and understand the local market. At least from a historical perspective. The conversations often lead to points about timing to enter a market, and the confidence there is generally in place. Comments like:

“if it is such a good place to invest, why isn’t everyone buying there?”

“I would not invest in my home town, prices just keep going down..”

“Its got to be cheap there for a reason”

And so on.

These are conversations I like to have. Only by exchanging ideas with investors, and really challenging our ideas about different markets can we really find out what we are looking for. The “gold” for us is high yield property with high levels of investor finance in place. Or to put it another way, a market where investor confidence is generally low or very low and the confidence of lending banks is high.
…read on to find out areas where these excellent investor conditions are in place

Next Month

Next month we will present our ProVenture Report on New Cities to Consider in Germany for 2012. We are also publishing the 5th Edition of our Investment book – you can read the 4th Edition here, or drop us an email if you would like a hard copy of the new book, hot off the press, in the post


Latest Property Offers


PV457 – 11 to 16% yield in Chemnitz


320,000€ | Chemnitz
Potential Yield: 16%
Type: Residential
Approx. Size: 848 sqm

Presented here is a beautiful period property, with 7 residential and 3 commercial units plus parking for 12 cars. Currently with a yield of nearly 12% and with significant potential to achieve 16% yield.



PV355 Apartment building in south west Leipzig


Reduced to 380,000€ | Leipzig

Potential Yield: 9.47%
Type: Residential
Approx. Size: 722 sqm

This is a purely residential offer in an early 20th century period property, around 4km south west of Leipzig city centre. Situated in the popular district of Kleinzschocher, the property appeals to residents who appreciate the sort commute by road or tram to the city, whilst being in close proximity to the parklands and lakes to the south of Leipzig. The area has developed much over recent years, with most property in the area being refurbished to a good standard as this property is. The property has accommodation set over 5 levels with three apartments on each level and is presented in a fully let condition



PV172 – Leipzig Region – Neukieritzsch


Offers invited 570,000€ |

Potential Yield: 14.4%
Type: Residential
Approx. Size: 1481 sqm

Open to All Offers – This investment is likely to appeal to a client seeking a high monthly income, with improvements to capital value through
the additional work highlighted above. The properties would be most easily secured on a cash basis, although finance
could be applied for with prospects to 60% LTV.



PV421


430,000€ | Leipzig
Potential Yield: 10.13%
Type: Residential

Approx. Size: 756 sqm

This property is based in Alt-Lindenau, just a few kms directly west of the city centre. The microlocation is very attractive, with neigbouring multifamily houses along the street all refurbished to an excellent standard. Alt-Lindenau is nestled in between Leutzsch to the north – where there are some of the highest rent levels in the city – and Lindenau to the south, with its own self-contained centre, with a wide variety of shops and family-based amenities. Demand in this area is strong, with a mix of single renters and families taking advantage of the location’s close proximity to parkland as well excellent transport links into Lindenau and the city centre.
The building itself is constituted of 13 residential units spread over 5 floors, with additional rear storage in the garden house which is rented by two of the property’s tenants. The units are sized between 45sqm and 90sqm, covering a broad range of the tenant market. It is fully let, with most tenants paying a rent level commensurate with the area, combining to provide a yield on delivery of almost 10%. The facade of the building is in good condition, and some work to the rear, and to the communal areas would serve the property well over the period of investment. The property has a very large 2-level rear garden, which is in a good state, and well used by the tenants during the summer months.



PV418


Offers Invited 420,000€ | Leipzig
Potential Yield: 12.07%

Type: Residential
Approx. Size: 1001 sqm

This is a package of two multifamily houses located in Böhlitz Ehrenberg and Alt Lindenau, two very different microlocations, but all conveniently located close to public transport and a range of shops and a range of amenities. The majority of the apartments are sized between 40 – 65 sqm, a good size to help ensure quick letting in the case of vacancy, although all units across the portfolio are currently let, albeit at levels which present fantastic opportunities for rental income development.
The exterior of the buildings are in good condition, but the interiors could benefit from some redecoration, perhaps as part of an implemented rent review programme. Both properties are entirely constituted of residential units. At an extremely competitive price of 420 EUR psm, this is an attractive package to investors seeking the highest of yields in the city.


PV416 – Fully Rented in Connewitz


Offers Invited 440,000€ | Leipzig
Potential Yield: 10.2%
Type: Residential
Approx. Size: 719 sqm

14 Apartments, fully rented investment opportunity with scope for rental income uplift. Renovated with 8 units boasting balconies.



PV475: Leipzig – Plagwitz – Schleussig


926,500€ | Leipzig
Potential Yield: 7.19%

Type: Residential
Approx. Size: 1090 sqm

In summary – 2 adjacent houses in the very popular Plagwitz-Schleussig area. In very good condition, finance upto 70% Loan to Value should be expected, delivering excellent cashflow.



PV740


975,000€ | Leipzig
Potential Yield: 8.19%
Type: Residential

Approx. Size: 830 sqm

Located in the trendy south part of the city in Sudvorstadt, on the demand street of the “Karli” here we have a beautiful period apartment house of the 1900s. The location is characterised by young people and students living in the area, with the best of the bars, coffee shops and society living that the city can offer. Rents in this area are increasing, with 6 – 9 Eur per sqm being typical in period properties such as this. Prices per sqm for owner occupied units are in the range of 1.200-1.800 Eur per sqm. In its current configutation we have 9 residential units and 1 commercial [a bar / restaurant, in residence since 2003]. The property stands with vacancy to 3 units, and here some re-configuration is needed to maximise the potential of the property. To the rear of the property are balconies with a pleasant aspect and space for parking. This is a rare object for sale as a complete apartment house and demands a viewing at this price per sqm.


PV422 – 4.3m€ Large commercial investment


4,300,000€ | Leipzig
Potential Yield: 11%
Type: Residential

Approx. Size: 8337 sqm

Leipzig-Plagwitz – The Elster Park. Direct Bank Sale Only 513 Eur psm. With 24% of the building to let – there scope to achieve 11% yield.


PV685


1,990,000€ | Leipzig
Potential Yield: 6.54%
Type: Residential

Approx. Size: 1120 sqm

This superbly-located beautiful period house is located in the highly demanded Centre-West area of the city. The location is highly favoured by both commercial and residential tenants, there is a 3-minute walk to the city centre, 5 minute walk to the lovely Rosenthal Park and the street itself has some of the best bars and restaurants that the city has to offer.




   
 


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