German investment property returned 5.5% in 2011 before tax according to the latest data from the Investment Property Databank. The IPD has been tracking the annual performance of German institutional investment portfolios in the DIX German Property Index since 1996. The 2011 index is based on the data from 4,300 properties worth more than 50 billion Euros in total.
According to the data residential property achieved the greatest return with 7.8%, industrial and retail were some way behind with returns of 7% and 6.1% respectively, and the office sector bringing up the rear with a return of 4.3%, although this was an improvement on the 3.1% return of the previous year. Breaking down the data IPD said that German properties brought a 5.3% income return, and the 0.2% capital growth represented the first capital growth seen for many years.
Residential stole the show when it comes to capital growth, with residential values up a collective 3.2% over the year. This is the highest capital growth recorded by residential property since the IPD began collecting data.
"In contrast to the other sectors, German residential property has now provided consistently positive capital appreciation over a period of six years," said Daniel Piazolo, managing director of IPD in Germany.
He added: "Combined with an income return of 4.5 % in 2011, residential property not only represents a popular choice for new investment, but has also proved to be a productive long-term holding within portfolios."
- Tuesday 03 April 2012