Frankfurt: Germany’s financial hub set for buy-to-let property boom
Hailed as Europe’s next buy-to-let hotspot, many believe that Frankfurt is in the early stages of a ‘Londonesque’ property boom and the place for a residential buy-to-let purchase in 2017.
Home to the European Central Bank, Frankfurt is the financial and commercial heart of Germany and is a sought-after destination for businesses and investors alike. Last year, Hubertus Vath, Managing Director of Frankfurt Main Finance, issued an open invitation to London-based banks to relocate to Frankfurt following Brexit, highlighting the city’s growing reputation as a financial power player.
With an impressive transportation infrastructure, Frankfurt is home to the largest airport in Germany (the third largest in Europe), providing excellent accessibility from most of the world’s major cities. It’s the combination of its accessibility, combined with the greatest standard of living in Europe that’s making Frankfurt increasingly popular amongst those looking to live and work in the city.
Currently, Frankfurt’s population is around 701,350, but is rising by approximately 15,000 each year and forecast to reach 830,000 by 2040. This population growth has created an insatiable demand for rental accommodation. Official research shows that major cities typically have the highest proportion of renters; for example in London over 50% of properties are rented; in Copenhagen over 80% and in Frankfurt over 77% of properties are rented.
While high demand presents an abundance of potential tenants, landlords in Germany are typically required to source tenants far less often than in other European destinations. Research shows that tenancy durations for rental property in Germany average around 12 years; substantially longer than the 2 year average in the UK. This makes the returns from German buy-to-let property much more stable; whilst also greatly reducing the management headaches associated with finding and vetting tenants.
With ongoing population growth, increasing rental demand and growing investment, many believe that Frankfurt is now at the beginning of its own property boom. The city has exceptional development potential whilst currently offering moderate, affordable prices compared to other major cities across Europe. For this reason high quality residential developments in Frankfurt have the potential to provide an outstanding return on investment.
Praedium Luxury Residential Tower, Frankfurt
Situated in a prime location in Frankfurt, Praedium is a high-spec residential development close to a number of schools, hospitals, shops, restaurants, cafes, bars and cultural activities. Once complete, the building will provide hassle-free luxury living for residents, and an outstanding investment opportunity for investors.
Apartments within Praedium provide a perfect opportunity to capitalise on Frankfurt’s ongoing property boom.