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The land of Lederhosen: Now the most sought-after destination for European property investors

March 13, 2013Article by Ray Withers

Last Sunday it was time. I’d given up on a training bike ride for my upcoming Frontiers Foundation charity cycle challenge due to the snow falling which was all too quickly turning Oxfordshire white, the rugby was on in the background, the Sunday Times Travel section lay temptingly next to me and iPad was in hand. It was time to find my summer holiday.

Having not been away for a while and looking for a more unusual destination for my wife and I to explore, I quickly dismissed the traditional options – Spain, France, Italy, Florida, even Thailand. I was looking for something close to home, with beautiful scenery and things to do.

Never quite switching off from work, I started thinking about the locations around the world where our investment opportunities were located. One destination quickly stood out – Germany, the location of our latest hotel room investment, AlpenClub.

Being one of the few languages I can competently order a beer in, I felt confident that the land of the Lederhosen might be the right choice so I investigated further.

A quick Google search revealed that Germany was somewhat of an unexpected European tourism gem. Attracting 68.8 million overnight stays from abroad in 2012 alone, an 8% increase on 2011 and up to 80 million forecast by 2020 (German National Tourist Board), Germany is a top 10 global tourism destination.

Ranked second in the world in terms of its travel and tourism industry competitiveness beating Spain, the UK, USA and France, Germany was the most popular travel destination for Europeans in 2010 and 2011 behind Spain.

But it’s not just European neighbours who are attracted; arrivals from China were up 21% in 2011, Japan 9.3% and the Arab Gulf States 4% (ADV). Indeed the easing of travel restrictions have had a real impact on Chinese tourist numbers with more than 600,000 bookings expected this year alone according to the DZT German Centre for Tourism. And arrivals from across the Pond are also increasing with overnight stays by US visitors up 4.2% in 2012 compared to the previous year and 5.9 million stays expected by 2020 (GNTO, 2013).

But Germany’s a big country, where exactly would be best to go?

Grabbing a well-deserved beer from the fridge at half time it dawned on me – Bavaria! The land of the legendary Oktoberfest with its 6 million visitors, seemingly never-ending tables, two pint Steins and more beer varieties than you can shake a pretzel at, was the place for me.

Bavaria in the south of Germany was also the location of AlpenClub so once more I started Googling in earnest.

Did you know that Bavaria is Germany’s most popular tourism destination and that 2012 saw Bavaria’s international airport total passenger traffic top 38 million for the first time, 600,000 more than 2011?  What about that over 14 million overnight stays by foreign visitors were made to Bavaria in 2011 (Federal Statistical Office 2012) or that 425,230 Brits descended on the state in 2010? Nope, neither did I but the numbers were impressive!

But it’s not only Germany and Bavaria’s tourism record that is impressive. As a property investment destination it’s one of the most attractive markets today. Indeed a recent article in the FT revealed that Germany is now the most sought-after destination for European property investors, ahead of the UK (according to a CBRE survey).

With a Eurozone break up no longer likely, investor confidence is high with 99% of German nationals surveyed in the recent Ernst & Young European real estate assets investment trend report stating that Germany was an attractive or very attractive location for property investment in 2013. And the Bavarian hotel market looks strong too with JLL’s Continental Europe CEO stating that “the most positive outlook in terms of trading performance was recorded by Munich” and the 2013 European Hotel valuation Index by consultancy HVS London stating “Munich’s hotel market continues to impress with its dynamism and strength” and that “solid Germany will be perfectly suited for institutional investors and the generally more risk-averse pocket”.

With such positive sentiment towards tourism and property investment, it certainly reassures me that not only is booking a holiday to Bavaria but also that our latest hotel room investment, AlpenClub, is the right decision.

And it appears I’m not alone; since launching AlpenClub last week we have had incredible investor interest with hundreds of calls and already 50% of the 4* rooms have been sold!

Attracted by the double-digit yields assured for 10 years, low entry point of just £44,950 (fixed in £, € or $) and defined exit through the Buy-Back option, the rooms are selling very fast so if you are interested to find out more call me today on +44  1865 202 700, click here  to contact us and recieve your FREE and exclusive Investment Guide.

Author

Ray Withers

Ray has over 17 years’ experience in the international property market and bought his own first international property investment back in 2002. Aside from running Property Frontiers, Ray has been involved in residential, hotel, student and commercial property investment and development in both the UK and overseas and co-wrote "Where to Buy Property Abroad - An Investor's Guide". As Founder and Trustee of the Frontiers Foundation, Ray is directly involved with many of its projects to ensure they have a direct and tangible impact in individual communities across the globe. He is passionate about property, travelling, scouting out new opportunities and finding time to spend with his young family.
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