Investment Property Databank has linked up with the European Business School to form Deutsche Immobilien Datenbank (DID) – the first index to measure property returns for the German market. Andrea Carpenter reports.
It pools information on the property holdings of seven major owners with a current value of DM20bn, 10% of the German property held by institutional investors.
The IPD/DID index shows an average return of 3.8% over the past two years with transaction and development activity adding 0.1% a year. The return from offices, which makes up around 60% of the portfolio, fell from 4.2% in 1996 to 2.9% in 1997. Retail produced the highest return over two years at 5.8%, while mixed retail/office developments producing returns of 5.0%.
Capital values fell in Germany in 1996 and 1997, producing an annualised capital growth of -1.6% a year with only retail and residential achieving capital growth in 1997.
Standing investments produced an income return of 5.3%, ranging from 5.0% to 6.2%, although property operating costs which are only recoverable from some tenants, reduced returns by 1%.
The IPD now produces indexes for the UK, Ireland, the Netherlands, Sweden and South Africa.
EGi News 3/12/98
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