A recent survey has revealed that most investors are picking Germany as their preferred commercial real estate market. Germany takes over the spot from the United Kingdom which was the most attractive market for CRE investment for two years.
According to The Wall Street Journal, a survey conducted by property broker CBRE has shown that 17 percent of the respondents chose Germany as the top country where they put their property investment. The U.K. only got a 15 percent vote, down by almost 50 percent from last year's 31 percent.
The report noted that the Germany's popularity is partly due to CRE investors' search for markets that can give them better yields and they are expanding their search in central and Eastern Europe.
Germany has been experiencing a boom in commercial real estate sector in the past years, particularly with office space being a lucrative investment. According to a report by Handelsblatt, the country saw a strong 2015 with local and overseas investment reaching as much as $62 billion on commercial property, up by 40 percent compared to 2014 figures.
While some market players predict a slowdown in Germany's hot real estate market due to the ongoing global market turmoil, others remain optimistic.
Ignaz Trombello of Colliers International Germany, a real estate agent association, told Handelsblatt that the German market will continue to grow as investors will inject more money into the real estate due to the lack of other safe investment options.
Meanwhile, the decline in the sentiment for the U.K.'s property market is driven by the falling oil prices and growing global economic uncertainties. The country's plan to exit the European Union is also making its property market less attractive to investors. Experts also predict that London, which remains as the most attractive city for property investment in Europe, Middle East and Africa, will experience price corrections, per WSJ.
