Commercial investors are beginning to catch on to the potential of German property, with the country's largest cities seeing escalating construction booms. A new large-scale shopping complex in Dresden has excited considerable interest from overseas investors in German property, and is set to boost the city's reputation as an attractive tourist and lifestyle destination.

Beyond the shopping facilities, Dresden offers visitors spectacular architecture and cultural richness dating back to the 16th century as well as theatres, museums and a vibrant nightlife. Many tourists appreciate the city as one of the greenest in Europe, featuring 63 per cent of green areas and forests as well as four nature reserves. Dresden is served by several direct flights from London Gatwick by Air Berlin, British Airways and Lufthansa.

Petra Gajdosikova, managing director of Alpha Real Estate Investments comments: "Dresden is a city rich in culture and history and is rated as one of Germany's most desirable places to live. We see Dresden's growing lifestyle facilities as a facelift for the city, which is currently making a great comeback. The Saxon capital is also an important European centre of high-tech and innovative industries. The city's strong rental market, growing population and property prices below their construction costs are some of the main reasons for the increasing number of overseas property investors."

Alpha Real Estate Investments is now offering one and two-bedroom apartments in one of Dresden's most desirable residential areas. The flats are located in a green and quiet area, featuring private balconies and within easy access to the city centre. Investors will benefit from a rental return of 5.75 per cent. Prices for spacious one-bedroom apartments start at £43,000 and go up to £69,000 for two-bedroom apartments.

Berlin  is attracting similar levels of interest from commercial investors, and property prices are also expected to rise. However, if you are considering snapping up a property bargain in the German capital, experts advise looking carefully at the buying process.

"The position regarding tenants in Germany is very different from the position in the UK or Ireland," says Comment by John Howell, Senior Partner at The International law Partnership LLP "This is partly because so many more Germans rent property (they have not yet seized the idea that everyone should own their own house) and partly because of the hang-over from the old Communist and Socialist era. As result, you find many more ordinary middle-calls tenants than you find here."

He continues: "When you buy a German property you may find that there are tenants already in it. This can, of course, also happen in this country. Just like in this country if you take over a property with tenants you and your lawyer must be very careful to establish precisely what their existing rights are and to document the relationship between you. As in this country, tenancies can be brought to an end but (if they are protected tenancies) only on certain limited grounds. If you wish to get rid of a tenant already in a building your lawyer must advise you precisely about your rights.

"It is possible to raise the rent of apartments in Germany but in many cases the tenant will enjoy protection and so any increases, in those cases, would have to be within the limits allowed by the law. If the seller is selling an apartment with a sitting tenant and you prefer to take delivery with no tenant it is by far the best if you make the seller deal with getting rid of the tenant rather than to take responsibility for doing this yourself. In many cases it can be very difficult to remove a tenant.

Berlin Property is currently marketing apartments in central Berlin from as little as 38,000 euros. Rental yield is estimated at between 5.3 and 7 per cent.

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For more information visit:
www.alphare.net
www.lawoverseas.com
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Article first published 5 February 2008