There are many reasons why today´s investors are seeking ways of placing their hard earned cash in assets abroad. The list of alternative options is daunting, but I think most of us would be comfortable with the idea of investing in a big, safe, democratic country with a strong legal system, a stable economy and a large domestic market.
We all want to maximise our return on investment, but at the same time, and especially if you are planning to retire in the next ten years, it is very important that it is invested in a low risk manner, that it is well managed by professionals, that a clear exit strategy is in place, and that you know roughly how and when you´ll get your money back.
Germany possibly isn´t the first country that springs to mind when considering an overseas investment, but the German investments Torcana has on offer may be just what you are looking for.
Germany is a country with low unemployment, world class infrastructure and a huge economy that actually earns more than it spends. The property market is low risk with a strong rental culture and excellent banking and legal systems. The returns on investment are high and the risk is low.
The German properties described in or property listings section are pure investments – their sole purpose is to provide you with a high return on the cash invested in a low risk manner. These investments aren´t sold on the basis of beautiful sunsets, luxurious condo drawings, shiny new airports or stories about the great quality of life you´ll enjoy by mingling with the locals and other retirees. We aren´t selling a lifestyle.
In fact, more often than not, we´re giving you the opportunity to invest in a non-descript building in a regular German town or city. You wouldn´t glance twice at these places if you were walking past them to visit a nearby cathedral or museum.
But you know what? These buildings are low risk money making machines. It is these “boring” buildings that will turn your €100,000 into €180,000 after 6 years and €324,000 after 12 years.
All of our German investments have the following characteristics.
Multi tenanted properties
We favour multi-tenanted properties, deal size €1.5M – €5M . These represent significantly lower investor risk than large single tenanted properties, particularly in the current volatile global environment.
Invest from €50,000
The minimum investment amounts for all of our properties is €50,000 (approx $60,000 / £41,500).
Strong rental returns
Yields on acquisition cost of 6.5% -7.5% , and gearing of 60%-70% mean that the properties pay their way each year after all costs and payment of full interest and capital to the bank .
Valued added services
Our target properties must have value add potential , that our in –house Property Consultancy, Property Management and Property Lettings Teams can bring to reality , thereby preparing the asset for a future exit .
Strong leases in place
The properties must have strong tenant profile/ leases , located in mature areas , and be in good condition , thereby reducing risk of future shocks.
We target established assets rather than new build . Existing properties are available at 50% - 80% of the build cost of a similar property . Commercial properties will generally have been built 1950s-1990s and the older properties will have had significant renovation/upgrade. Residential properties often date back to late 19th or early 20th century but will be of high quality construction with renovation in the past 20 years.
Risk spread among a variety of dependable businesses
Our target commercial tenants are the small and medium sized family/private businesses that are the heart of the German economy , and from which a high proportion are very strong stable businesses which have a preference for renting
Strong rental culture
Similarly over 50% of Germans rent rather than buy their apartments which means a strong supply of quality long-term residential tenants.
Exit on 5-7 years
The preferred investment period is 5-7 years to take advantage of renewal of leases which in multi tenanted properties are generally in 3-5 year cycles. We also have investments targeted at longer term holds, particularly targeted at pension investors.
For further information on the German Economy & Property Market please visit our Why Invest section.
For detailed information on our current opportunities, please visit our German Property Listings