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Taking the long view in Germany - but why things may be moving a great deal faster in Hamburg; plus opportunity in Macedonia?
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Germany gave me the usual mixed feelings.
The German debates were mainly academic discussions with one or two foreigners but too many gave the frightening prospect of the German view of long term investing being “30 years…”
As one German investor said “Just think, 30 years ago Dusseldorf was the prime location in Germany and Munich was nowhere to been seen. But just look at Munich now? What we have to do is try to imagine how things will be in another 30 years…”
… err, actually, I’d rather not!
Clearly, this view of Germany is the prevailing view and it means that Germany isn’t just Long Term – it is VERY long term.
Bright spots
Still, Germany does have bright spots which don’t share this rather fatalistic view.
Munich, clearly, has an upper hand as does Stuttgart. Frankfurt has the fear of a credit crisis damaging its banking industry or worse, forcing cuts and rationalisation that would involve the wholesale relocation of finance jobs to centres such as London.
However, the German city that really stood out was Hamburg – and not just because it had the largest stand – it also had the biggest story.
Hamburg’s Hafen project is now under construction and first phase of residential units are selling very fast.
It will increase the downtown area of Hamburg by 30% and is thought through with exceptional care. Along with the new quarter and new underground line will be added that will provide two tube stations in the Hafen quarter.
Many of the buildings are like old London docklands warehouses and the development has been designed to create attractive cultural and high street areas as well as shopping malls.
Clearly, this is intended (and I’m sure will be successful) to add tourism and international focus on the city.
Hamburg's answer to Amsterdam's charm?
Really, this is Hamburg’s answer to Amsterdam’s canals and it is already drawing investors from the post boom property markets of Holland and Denmark.
Add also the thought that the sea walls have been raised to allow underground parking – without risk of flooding – and you can see that this is a massive project with a huge amount of detail and careful planning.
Here the German reputation for quality will make its mark and I think this will be a hugely successful project and one that will catapult Hamburg to the top of the property price growth tables in Germany,
Elsewhere there is growing competition between the cities and German Laender which might create a more entrepreneurial atmosphere but I am still very cautious about ending up in an investment for 30+ years.
I might like long term investments – but I don’t mean 30 years!
Macedonia pops into view
Other countries I noted where Macedonia – basically about 2 years behind Bulgaria and doing lots to develop its tourism first (a shame but necessary perhaps?) and then follow with the cities.
This suggests that the opportunity in Macedonia is large scale land acquisition in the capital (no, not plots – but €2m+ investments) but not to develop for a year to two.
India makes a play
India made a play and will be back next year - bigger and stronger. Clearly, it is tough for foreign developers to work in India – but investors wouldn’t have the same degree of problems as English is widely spoken and whilst corruption exists, there is a high degree of transparency – and faulty though it may be – a stable democracy.
For my money, this makes India a more attractive investment target than either of the 2 other main BRICS countries (Russia, and China)
Of all the foreign exhibitors Moscow had the biggest stand. It also had the biggest projects – massive new gleaming cities on the outskirts of city.
One of the many dangers is that these cities might never be properly integrated into Moscow and therefore fail. It could be glorious or it could be nasty – I can’t tell, so I’d stay away.
Lastly, eat your heart out Spanish coast and Bulgarian Beach! Coming to a tourist destination near you is a new kind of holiday home. This will be built on gleaming newly built islands that protrude into the sea and have such an aura of perfection about them that you think you are looking at a Disney park for grown ups.
I kid you not, the Dubai developers have made their money and are moving on (okay branching out) and they are taking their ‘out of this world’ concepts with them.
It might work – it might kill the drab 60s architecture of many Spanish beach resorts - or it might just prove to be a fashion and a fad.
It certainly looks like fun to stay for a week or two on one of these islands – but after that, I fear I’d get bored.
After all, Paris Disney looked pretty cool on the adverts – but I was glad to leave after the first day!
Still, with more and more tourist offers around, the designers have turned holiday property into a fashionable art form.
I think picking winners in the holiday market ‘a la mode’ is akin to picking new artists for record companies.
Some people will be great at it – but most of us will just want to sit back and watch or listen.
Back to the boring cities where the real work gets done then!
Posted by Neil Lewis
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POSTED BY
ROBIN BOWMAN
ON
FRI 12TH OCTOBER
AT
12:50 GMT
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TAGS:
Macedonia Property, Hamburg Property, Germany Property, Germany Property
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TAKING THE LONG VIEW IN GERMANY - BUT WHY THINGS MAY BE MOVING A GREAT DEAL FASTER IN HAMBURG; PLUS
....UPDATE...
I have just finished reading a detailed office lettings report on the German market - and it makes interesting reading!
Typically, office markets are centred on the big cities - in this case Hamburg, Munich, Frankfurt, Duesseldorf and Berlin.
Here is what DTZ's report says
"On a 12-month comparison, Hamburg is quite clearly the shooting star, with turnover about 50% higher than in the first half of the year. In Duesseldorf and Frankfurt, turn over rose by about a quarter. Munich posted an increase of some 13%, while Berlin only just managed to exceed its prior-year result."
"The good performances in Hamburg and Munich were decisively fuelled by a number of large-unit lettings in the size category upwards of 10,000 sqm.
This to me points to the fact that big business (and large FDI monies) are being focused on Hamburg and Munich.
This also means that these locations will become ever more attractive for a German headoffice for other firms at the expense of those cities - such as Berlin - which are not able to pull in the big deals.
Cheers
Neil
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POSTED BY
NEIL LEWIS
ON
TUE 16TH OCTOBER
AT
08:22
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HAMBURG
Neil - your comments on Hamburg tie in with my experiences. I work for one of the world largest multinationals and we have a significant and growing presence in Hamburg. Labour is cheaper than London for example and it is very good quality labour as well. It's also an excellent city in which to live in. It has a friendly and affluent atmosphere. I was very pleasantly surprised when I visited Hamburg for work.
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POSTED BY
BRETT S
ON
TUE 16TH OCTOBER
AT
09:32
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