Commercial property in Germany: safe investments, fast profit

Commercial property in Germany: safe investments, fast profit

One of the most stable economies in the world, permanent GDP growth, minimal inflation and unemployment rates. Add favorable terms of investment, low loan interest rates and guaranteed income, and you get a perfect market for capital investment. This is what Germany offers.

German capital city is not the only one to develop. Several big cities, including Munich, Hamburg, Frankfurt am Main, and Stuttgart see the demand for real estate property increase every year, both private and commercial. The latter grew once again in 2015.

The most popular type of commercial property facilities in Germany are office buildings. The cities expand and new companies arise that need more employees and more working space. A research by Cologne Institute for Economic Research (Institut der deutschen Wirtschaft Köln) shows the amount of property occupied by offices has grown by 2% throughout Germany in 2015 compared to 2014, and by more than 3% in Berlin, Dusseldorf and Munich. It should be noted that the real estate property prices are gradually increasing, so the investor will be able to resell the facility with profit in several years.

A future investor who wants to buy a commercial property should pay attention to retail space. According to experts, the number of contracts for supermarket and shopping mall areas increased by 120% last year.

Every year, the country sees a growing number of tourists. So if you plan to acquire commercial property in Germany, think hotels, spa centers and gyms. There is a benefit here: the VAT for hotels has been reduced from 19% to 7%.

Commercial apartment buildings in Germany should be mentioned separately. This means buying real estate facilities with lessees. The fact that most of the population (about 80% in the capital) prefers living in rental houses or apartments is a peculiarity of German real estate market. This fact is fueling the demand for commercial apartments in the country. When buying a facility, investor does not have to look for lessees, and the first income will arrive in the end of the month. Sale of commercial apartment buildings in Germany does not stipulate for renewal of agreements with lessees. This simplifies the process of registration of title for a real estate property significantly.

As a rule, return on assets from commercial property ranges from 4% to 15% per annum. Experts believe that capital investments are more profitable in Western Germany than in Eastern Germany due to discrepancy in economic development level. Foreigners can buy square meters in the country without any restrictions, and the banks are willing to provide loans at 2.5% rate for a period of 10 to 15 years. This is why Germany is exactly the right country to make investments in.

In order to make sense of the large number of offers, find out a needed facility and execute a transaction in a right way, it’s better to involve real estate experts. ProfitHill Company has been dealing with investments for more than 10 years. Our experts are ready to assist in making your investment as profitable as possible.