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German Listed Real Estate Market Expansion to Continue

09/16/2011 | By Matthew Bechard

One of the main topics of discussion at the European Public Real Estate Association's annual conference in London in early September was the future of the German real estate market. Ulrich Hoeller, vice chairman of the German property association ZIA, spoke with at the event about what needs to be done to fully unlock Germany's potential as a real estate investment market.

"What we have seen over the last 12 months was a bottoming out of the commercial real estate market," Hoeller, who is also CEO of German real estate company DIA Asset, said. "Rents are starting to rise again and demand is picking up. Therefore, the outlook, depending on strong economic growth in Germany for 2012, should be great."

Hoeller said he used the words "should be" because the economic crisis has made any sort of forecasting a challenge and things can change very quickly.

The market capitalization of the listed German real estate has increased 75 percent in the past year, and Hoeller said it is realistic to expect further expansion. He said part of that growth will come from new companies entering the public market.

"From my point of view, the REIT until today has not been a big deal because there have only been three main German REITs," Hoeller said. "For the investment community it is mainly a question of quality of management, size of the company and a strong business model."

ZIA, the main advocate for German property companies, is focused on a number of issues, including sustainability. ZIA works closely with EPRA on issues that impact Germany as well as Europe as a whole, Hoeller said.

"We are trying to expand the knowledge and impact of the German real estate industry in contact with the politicians in Berlin and Brussels," Hoeller said.