BERLIN-Rising purchasing power in eastern Germany, stable employment and improving wage levels mean property there, which has suffered from focus on western Germany, now offers good opportunities to investors, says a new report from Berlin-based portfolio manager TLG Immobilien.

“The east German property market presents itself in a markedly robust light,” said Niclas Karoff, TLG’s CEO. Prices in all segments were stable or rising, even during the crisis. “Eastern Germany still creates opportunities for investors.” The value of residential property has risen, especially in Dresden and Potsdam. Outside of Berlin, rents are highest in Potsdam at up to $14.60 per square meter and $11.12 per square meter in Rostock.

Values for commercial property and retail leases stayed stable over the crisis, and the highest leases can be realized in Leipzig (up to $160 per square meter), Dresden ($153), and Erfurt ($125). Office property leases also stayed stable or rose, as in Dresden and Leipzig where transaction volumes were very high in 2009. Erfurt shows the highest office rents with up to $17.38 per square meter, followed by $16.68 per square meter in both Rostock and Leipzig.

Berlin stays a dynamic location for commercial property, says the study. Leases in 2009 went up considerably to up to $361 per square meter. An upward trend can also be marked in condominiums in the eastern part of the city, where prices have risen to $5,422 per square meter. Berlin office was the only sector to experience price declines over the last year. A stabilization is expected due to low construction supply.

Allan Saunderson is a managing editor of Property Investor Europe and a contributor to GlobeSt.com.

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