The 5% Study - Where It Still Pays Off to Invest

The 5% Study - Where It Still Pays Off to Invest

Is the traditional 5% target yield for investors a thing of the past? bulwiengesa examined the yield potential on the German real estate market on behalf of Aurelis Real Estate and Beiten Burkhardt Rechtsanwaltsgesellschaft. The second 5% study, which is being released on 22 September 2016, for the first time clusters markets not only by region and use. The focus is on their income opportunities.

The results in brief:

  • Yield potential for core properties decreased in all asset classes
  • Particularly marked decline for office properties in B and C markets
  • High yield potential for production properties, among others

The results for core properties

The yield potential for core properties has decreased year on year in all asset classes.
Overall, the probability of reaching the 5% mark with secured investments in the conventional asset classes is becoming ever smaller. Such yields can usually be achieved only in smaller markets or in management-intensive property classes. In these cases, however, there is the fundamental problem of selling the properties again if necessary at an appropriate price even in declining investment markets.

Sven Carstensen, carstensen [at], Telefon: +49 (0)69 75 61 467 61

Ongoing Market Observations