S IMMO Germany: Focus on Erfurt
- S IMMO Germany now purchasing commercial properties in Erfurt in addition to residential buildings
- Two history-charged office buildings purchased since start of year
- Portfolio in Erfurt grows to over 36,000 m² of lettable space, further purchases planned
S IMMO Germany has been active in Erfurt since the beginning of 2018, thus continuing its strategy of investing in major cities with value-enhancement potential. Erfurt’s real estate market has enjoyed very positive development recently and is reflecting the city’s solid economic and demographic trends. The new ICE line from Berlin to Munich passes through the hub of Erfurt and promises further growth for the city.
Robert Neumüller, managing director of S IMMO Germany, sees Erfurt as a consistent continuation of the strategy to invest beyond the country’s capital: “Erfurt has been on our list for quite some time now. It wasn’t easy to access the market at first, and our sounding process took a while. So we are all the more excited that we now have over 33 properties in our portfolio. This is a great size that allows for efficient management.”
Initially, the company purchased residential buildings in the sought-after Gründerzeit districts surrounding the medieval old town. The positive population trend – Erfurt has been steadily growing again for several years – and the relatively low vacancy rate suggest that rental income will see sustainable growth. The company has now broken into the commercial real estate market as well, securing two centrally located office properties that are well known in the city for its portfolio: the former Reichsbahndirektion building located directly on the forecourt of the rail station and the no less historic royal Prussian gun factory on Maximilian-Welsch-Strasse.
“We expect the market to continue growing and expect to see a positive trend for rents and property prices. Erfurt is an exciting city for us where we want to make further purchases,” said Neumüller.