Major Property Investment Players Looking to Germany

This is encouraging investment funds and individuals to view Germany as a prime target as it has good economic growth and stable property prices.

According to Commerzbank, Germany's second-largest bank, investors are likely to shift assets from countries more advanced in the cycle, such as Spain and the UK.

Wealth funds, insurance companies and pension funds are keen to increase their portfolio allocations in stable property markets with the potential for rising prices, according to David Stanley Redfern Ltd.

Demand has also been boosted by the return of many German property investment funds to their home market, said spokesman Liam Bailey, head of international research.

'There is also widespread perception that the peak of banks' asset writedowns, a result of the credit crisis, has been left behind, forecasting a distinct pick-up in property deal-making in Germany in the second half of 2008,' he said.

'We have long been talking about the major players in the financial sectors entering or re-entering the German property market and buying apartments in bulk. It stands to reason that some equally big players outside the financial sectors would follow them. The effects have and are already beginning to be seen, with rental rates rising across the board, and the mood, even in Berlin - where less than 20% of the population own their own homes,' he added.