Germany has a gross domestic product of approximately €2.7trn (£1.8trn) and is the third-largest real estate market in the world, making it the largest and economically most powerful member of the European Union (EU). In recent years, UK investors have purchased £4.5bn-worth of German real estate and this, together with the constant smattering of reports in the property press about the expansion into Germany of UK property companies, are a telling indicator of the attractiveness of the German real estate market to UK and international investors. The introduction of the German real estate investment trust (G-REIT) has the potential to open up the German real estate market and capture the attention of more UK investors.
The Bundesrat (Higher Chamber of the German Parliament) passed the German Public REIT Act on 30 March, 2007, and from 1 June, 2007, G-REITs came into existence retrospectively from 1 January, 2007. G-REITs aim to create a significant listed German real estate market and offer the opportunity for existing companies to restructure. Each investor holds a small share in a real estate portfolio that offers the investor the chance to achieve returns at the same level as if real estate is held directly, without the costs of doing so.
