Commercial property returns in Germany last year narrowly missed matching 2015’s record of 8.1%.
According to MSCI, the return in 2016 was 7.8% after a fall in performance from industrial and logistics buildings.
The IPD Germany Annual Property Index, which tracks properties with an aggregate value of €50.3 billion, showed there was positive capital growth in all major sectors – industrial, hotel, office, residential and retail.
But capital growth for residential and industrial/logistic properties declined by more than 250 basis points. However, in contrast to 2015, capital appreciation was driven by rental value growth, and not primarily by yield compression.
MSCI said rents were behind the positive returns from German property last year.
MSCI recently reported “strong” returns from real estate in France for last year, though the 7.8% total return was down from 9%.
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