Investing in a commercial in Germany

Why invest in commercials in Germany?

With a rate of return that is sometimes twice as high as rental housing, investing in business premises in Germany has many advantages. The lease is usually concluded on the basis of a sound business project of the tenant. Cancellation of the lease contract is therefore generally rather rare. There is no legal minimum notice period, which makes it possible to set the rules of the contract much more flexibly. The regulations surrounding the contract are generally much freer than in the case of rental accommodation. It also allows, for example, more charges to be passed on to the occupant. The risk of non-payment is also much lower.

The vitality of the German economy is also reassuring for an investment in this segment. The purchasing power of households is constantly increasing, unemployment is at its lowest level and the development of SMEs is stable.

Be aware of the peculiarities of the German market, where there are no “shop walls” or “goodwill” as such. Under the name “Gewerbe Immobilien” are grouped all types of property used to develop a commercial or industrial activity, from a ready-to-wear shop to a storage shed and a large-format printing plant. Our team will be able to guide you on the right terms to identify during your search.

What are the criteria to consider?

While it can be lucrative, this market segment is still quite limited given the relatively scarce supply, especially on high-traffic sites. It is this same level of use that will in part determine the value of the property. A commercial property increases in value according to its profitability, which in many cases means a large number of passers-by. Pedestrian or more commercial arteries can reach high prices.

The most favourable locations have a number (1A) to differentiate them from other areas. In this respect, the installation of a large sign with a strong brand attracting shoppers or a new cinema can, for example, increase the attractiveness of an area and allow other less visible commercial premises to increase their turnover.

Likewise, beware of small retailers setting up in locations that are already highly competitive in their respective sectors of activity. It may not make sense to acquire commercial premises whose occupant opens the 5th kebab-pizzeria on the street. Investment in business premises in Germany therefore requires attention to the immediate competitive environment as well.

The advantages of our agency for your search

• Your project and your objectives are at the heart of our concerns
• Our network of local partners keep you informed of the latest market trends
• We accompany you from the initial research to the signing of the deed of sale and the lease with the occupant
• Our legal advisory service helps you in the management and tax optimisation of your property