It is getting increasingly difficult to find affordable product in Germany due to the amount of capital chasing real estate, Stefan Brendgen, head of Allianz Real Estate Germany said on Wednesday at the Expo Real fair in Munich.
'Some assets are getting too expensive, and there are some things that we just cannot do. I think this will be the topic in 2013 going forward,' Brendgen said.
Allianz Real Estate invested some EUR 300 mln in German properties this year, and expects to sign a new office centre acquisition in the next few weeks, he added. 'There was a promise to investors to look for value in Germany and expand the CEE portfolio. We spent EUR 800 mln this year mostly in Warsaw and Berlin. The attractiveness of Poland is its young, dynamic workforce, the building-up of the middle class. You can still get attractive yields from a cash-flow point of view and we see upside potential in rents. In Germany, Berlin is everyone's darling at the moment. We bought a couple of assets in the Mitte district, assets where we see an opportunity to improve rental values.'
Commenting on Central Europe, Allianz Real Estate's Chief Investment Officer Charles Pridgeon said the company is looking for further investment in Poland. 'A few months ago we started looking at Warsaw. The fundamentals were good so we tried to be ahead of the curve. We invested EUR 400 mln in the city and we would like to do more, particularly in the retail segment.'
Allianz Real Estate bought the Warsaw Financial Center (WFC) in August in a joint venture with Tristan Capital Partners for about EUR 210 mln. In June, it bought the Platinium Business Park in Warsaw from CEE property developer GTC for EUR 173 mln.
Want to know more about the state of the German market? PropertyEU is hosting a morning Investment Briefing on Germany in London on Tuesday 16 October. Click on the link below for more information.