Investors who aim for a high return in commercial real estate in Germany's cities should strike in Magdeburg. Similarly attractive are Erfurt and Dresden. In these three cities of eastern Germany investors currently achieve the highest rental yields - at increased risk. The lowest yields, but also more security, are offered by Munich, followed by Stuttgart and Hamburg. This is the result of the PwC Real Estate Investor Survey Germany. The accounting and consulting firm has created the conducted the first for the German market and at the suggestion of many market participants who complain about the lack of transparency in the German real estate market.

The survey of 250 investors shows the current mood in the German market for office and retail properties. Three categories were examined: the seven largest cities, as well as the 13 largest regional cities (200,000 to 600,000 inhabitants) of Germany and seven regions based on provinces.
"Our survey confirmed a strong investor competition in Germany's major cities to office and retail properties. Smaller markets with their higher individual risks are currently much more attractive for investors who are looking for yield," says Thomas Veith, partner in the Real Estate Transaction Services at PwC.

All-Risk Yields refer to expectations too
The survey used the code "all-risk yield", which took purchase prices, rents and the individual investors' expectations into account. Yields were calculated taking into account all risks, based on the net income (Net Operating Income NOI) of the respective objects.
In all seven Top-Cities , compared to the other categories of the lowest yields; the risk of loss for investors is the slightest and transaction volumes are highest. Remarkable: Although Germany is considered a relatively homogenous market, the comparison reveals large differences between individual markets. Prime locations in Munich, for example, have all-risk yields for office properties of only only 4.18 percent - Germanys lowest value. This is followed by Stuttgart (4.49 percent) and Hamburg (4.55 percent). In Magdeburg, however, investors achieve 7.50 percent return in a prime location; in Erfurt there are 6.75 percent, 6.45 percent in Dresden.

In contrast to the cities regional cities as well as the peripheral show lower transaction volumes and higher risk, but also the highest returns. The range for top properties on both types of use ranges from 5.18 percent to 7.50 percent Retail in Hanover for office in Magdeburg.
In view of the regions Saxony, Thuringia, Hesse and North in NRW show the highest returns. The lowest returns can be found on both types of use  in Bavaria, where the yield differentials between regions are not great.
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