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Property funds set sights on Germany
Real estate news By Natalie Craig
October 10, 2007
THE dwindling supply of investment-grade stock in Australia has pushed local property funds to buy overseas and Germany is one of the flavours of the year. In the past year, companies including Multiplex and Valad have acquired or created funds to invest in property in Germany because of a lack of quality stock in Australia and a surplus of money due to superannuation investment.
These companies have joined the likes of AEZ's APN /UKA European Retail Trust, whose German portfolio is worth about €230 million ($A374 million). Attractive yields and strong conditions in the world's third-largest economy are likely to make Germany an increasingly popular target for Australia's burgeoning property funds, which are fuelled largely by compulsory superannuation.
Multiplex's European Fund, which listed in April, is looking for retail, office and industrial properties in Germany. It already has a portfolio of 67 retail, logistics, office and nursing home assets across Germany worth about €363.6 million. Multiplex European Property Fund manager David Newling said the launch of Germany's legislated real estate investment trust market from January 1 would increase transparency and attract more foreign investment. Corporate tax reform in the legislation would also benefit companies by limiting interest deductions.
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