LONDON, Dec. 19, 2016 /PRNewswire/ -- German commercial real estate offers significant potential for investment, with the office and retail sub-sectors outperforming regional markets. Instability in the eurozone, dwindling global demand and rising debt have been shrugged off by strong macroeconomics, supporting stable economic growth. We believe there is room for further rental growth in 2017, on the back of bullish sentiment, high demand and greater business confidence. Germany is the fourth largest economy in the world, and the largest in the EU.
The export-orientated country has a strong manufacturing base in the 'Mittelstand', the family-owned small and medium-sized firms that comprise the majority of companies in the country, and has had a trade surplus for decades, leading to continued bullish investor sentiment in the economy. However, in recent years there have been numerous headwinds, particularly regionally, that have put pressure on the German economy. Recently, the UK's June 2016 vote to leave the EU and slowing global trade have put further pressure on the bloc. However, we believe that the German economy remains robust, and a range of economic indicators point towards further strong growth. Germany thus remains a stable choice for investment both domestically and internationally. In the commercial real estate market, sales have more than quadrupled over the past six years, and with investors increasingly turning to stable environments like Germany to seek capital growth, we believe rentals will appreciate in each of the three sub-sectors we cover over the next two years.
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