February 1, 2016
Interviewed by: David Snow
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Eyeing Six German Cities for RE Investment

As a Munich-based chief risk officer for Allianz Real Estate, Hauke Brede has a distinct view into Germany’s RE market. He outlines where he sees investment opportunities, and areas to be avoided.

As a Munich-based chief risk officer for Allianz Real Estate, Hauke Brede has a distinct view into Germany’s RE market. He outlines where he sees investment opportunities, and areas to be avoided.

Eyeing Six German Cities for RE Investment
With Hauke Brede of Allianz Real Estate Management

David Snow, Privcap: Today, we’re joined by Dr. Hauke Brede, Chief Risk Officer of Allianz Real Estate. Hauke, welcome to Privcap. Thank you for being here.

Hauke Brede, Allianz Real Estate: My pleasure, David.

Snow: Hauke, you are based in Munich. I can’t help but ask what is your view of the German real estate market, which has, of course, received a lot of attention and capital lately?

Brede: Our investment scope is really a global view of our investment opportunities. And you’re right—Germany is our home market, so to speak. But, everybody looks right now at Germany as the safe haven in Europe, which I think can be seen as quite normal, if you see the economic growth that is still in place. I just want to remind people that Germany was considered to be the sick man in Europe only 15 years ago. That has changed, which also means it could change again, right? I don’t think everything will be like, but right now, I think Germany is a stable market.

When we look at Germany, we only look at the top six cities. I wouldn’t really go into secondary markets, especially when I see as an early warning signal, let’s say, foreign capital going to a market where you then actually see some, let’s say, Asian money or other sovereign wealth money investing in secondary cities or into BClass assets or even in Tier1 cities. But, at top prices, I get nervous. I see this already in Germany where everybody then says, “Well, this is still the best place or one of the better places in Europe to invest.” I would be cautious, right? Because I think, at one point, the party will be over and the question is what happens if…? What happens if interest rates go up? Or, let’s say, certain economic trends actually will go into the other direction. I think you kind of expect that Germany will be stable forever. I think you will see, at one point, that everything will slow down and that will have an impact on your investment performance.

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