12.10.2016
TAG Immobilien AG DE0008303504
TAG Immobilien AG: Housing Market Report Eastern Germany 2016 (news with additional features)
DGAP-Media / 12.10.2016 / 10:30
Press release
Eastern Germany's towns and cities lure investors with attractive yields
- Housing market report analyses 27 large and mid-sized towns in Eastern
Germany
- Gains in attractiveness and population are driving rental and property
price increases
- B-cities lure investors with average yields of up to 9 percent
- Regions around major cities enjoy growing popularity
Hamburg, 12 October 2016 - Eastern Germany's medium-sized cities are
enjoying a comeback. Not only are population and household numbers on the
rise, but labour markets and purchasing power are also increasing in many
regions. As Eastern Germany's large and medium-sized towns and cities have
gained in attractiveness, rental and property prices in local markets have
been driven higher - and yields have remained extremely attractive. This is
confirmed by the "Eastern Germany Housing Market Report 2016", published
today by TAG Immobilien AG.
For the report, TAG commissioned the real estate advisory company Wüest &
Partner Deutschland to analyse 27 large and medium-sized towns and cities
in Eastern Germany. The study incorporates data on demographic and economic
trends, housing construction activity, rental and property purchase prices,
and property investment yields.
The East's hidden gems
The study reveals that the population declines of the recent past are now a
thing of the past, at least in the region's large and medium-sited towns
and cities; urban centres are growing again and there have been double-
digit declines in unemployment rates almost across the board. Economic
growth has led to increased purchasing power, declining vacancy rates and
attractive yields in many locations.
"In Saxony's Chemnitz, for example, household purchasing power has surged
by almost 15 percent over the last five years. In combination with vacancy
rate declines and rental prices that remain at an affordable level, such
developments promise investment yields of over 9 percent, peaking at up to
12.5 percent," said Claudia Hoyer, Chief Operating Officer of TAG
Immobilien AG. "B locations that boast universities or technical colleges
have an extra degree of attractiveness," continued Hoyer. As a university
town, neighbouring Freiberg doesn't only attract students. Six years ago
this town in the Erzgebirge had a vacancy rate of less than 8 percent. As a
result of increased demand for housing, property prices have risen by
almost 40 percent in five years. Yields in Freiberg are similar to those in
Chemnitz, and are comparable with those registered for the other Eastern
German towns and cities included in the TAG Immobilien study:
Please find attached the full press release with a chart of "Selected gross
property yields in Eastern Germany's medium-sized towns and cities 2015".
Property in Thuringia is now also more expensive than ever before. The
price per square metre for residential property in Jena has reached
EUR2,100, a 22 percent gain between 2011 and H1 2016. Such developments
have also benefited Weimar, just under 30 kilometres away. Famous for its
culture and university, the town has seen apartment prices increase by
around 42 percent within five years, averaging EUR1,676 in H1 2016.
Residential investment properties in the town regularly change hands at
price-to-rent ratios of 15, generating average annual property yields of
6.7 percent. In the past five years, rental prices have increased by 14
percent.
But even this is beaten by Greifswald to the north. Housing is in short
supply in this popular university town, despite a great deal of housing
construction activity. The average rent here has risen by more than 17
percent in five years, climbing to EUR8.21/sqm per month - outpacing the
rate of rental price growth in Rostock or Schwerin. The average per square
metre price for residential property had climbed to EUR1,630 by the end of
H1 2016. This represents an average price increase of some 15 percent for
residential property in Greifswald over the last five years.
Localities around major towns and cities step into the limelight
It is not only B cities that are experiencing unprecedented demand, the
same applies to smaller towns in the regions around major cities,
especially those that boast convenient rail and bus links to their larger
neighbours.
The extremely positive economic and population growth in Berlin has
increased the pressure on an already overheated and over-priced housing
market. Households are able to find more favourable conditions in the
city's surrounding region - for example, in Strausberg. With about 26,000
inhabitants, the housing market in this small town is flourishing as it
attracts growing numbers of residents who appreciate its established public
transport infrastructure. The price of an apartment building here has risen
to 25 times annual net rental income. Over the last five years, rental
prices have increased by some 30 percent, and reached EUR6.84/sqm at the
close of H1 2016.
What is true for Berlin is true for the other major cities in Eastern
Germany that have experienced enormously dynamic growth over the previous
five years - above all Dresden and Leipzig. As a "magnet town" in close
proximity to Dresden, Freiberg is now attracting many more residents than
it was able to do just five years ago. Neighbouring Döbeln has also become
more attractive for investors as a result of strong economic growth. Price-
to-rent ratios have hit 11 - and average yields stand at over 9 percent,
peaking at 12.5 percent.
Please find attached the full press release with a chart of the "Percentage
rental price growth in selected Eastern German cities, 2011 to 2016"
Further results and the full "Eastern Germany Housing Market Report 2016"
study are available for free via the following link: http://www.tag-ag.com/
en/service/downloads/housingmarketreport/.
About TAG Immobilien AG
TAG Immobilien AG is an MDAX-listed company with a more than 125-year
history. Its primary focus is on the Greater Hamburg and Berlin areas, the
Salzgitter region, as well as Thuringia / Saxony and North Rhine-
Westphalia. The company currently manages via its brand TAG Wohnen nearly
80,000 dwellings and their associated commercial areas, garages and parking
spaces. The company's goal is to improve the quality of housing for its
tenants. In line with this, TAG adapts its holdings to modern living needs,
gets involved in the communities of its residential quarters, and promotes
a positive neighbourhood spirit. The Group continually reduces vacancies
and increases the value of its total portfolio via the prudent management
of its properties and future-oriented development of its overall portfolio.
Press contact:
RUECKERCONSULT GmbH
Nikolaus von Raggamby
Managing Director
Tel. + 49 (0) 30 2844987 40
Fax +49 (0) 30 2844987 99
[email protected]
TAG Immobilien AG
Dominique Mann
Head of Investor & Public Relations
Tel. +49 (0) 40 380 32 300
Fax +49 (0) 40 380 32 388
[email protected]
End of Media Release
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Additional features:
Document: http://n.eqs.com/c/fncls.ssp?u=XHKNDABGDE
Document title: Housing Market Report 2016
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Issuer: TAG Immobilien AG
Key word(s): Real estate
12.10.2016 Dissemination of a Press Release, transmitted by DGAP - a service
of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.dgap.de
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Language: English
Company: TAG Immobilien AG
Steckelhörn 5
20457 Hamburg
Germany
Phone: 040 380 32 0
Fax: 040 380 32 388
E-mail: [email protected]
Internet: http://www.tag-ag.com
ISIN: DE0008303504, XS0954227210, DE000A12T101
WKN: 830350, A1TNFU, A12T10
Indices: MDAX
Listed: Regulated Market in Frankfurt (Prime Standard), Munich;
Regulated Unofficial Market in Berlin, Dusseldorf,
Hamburg, Hanover, Stuttgart, Tradegate Exchange
End of News DGAP Media
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