The biggest winner from Brexit will be Germany and Frankfurt
Political stability, thriving economies, cities that “working on being a great city” are what tick the boxes for German’s real estate industry.
With Brexit creating uncertainty in London, Asia Pacific investors are making Berlin and Frankfurt their second stop. Instability created by Brexit has meant that Germany has increasingly found itself in the international spotlight, suggested by Thomas Zabel, Head of Residential Development of JLL Germany.
Frankfurt: Safe haven for overseas investment
“The biggest winners from Brexit will be Germany and Frankfurt,” a view is shared by a large number of PwC Emerging Trends Europe’s interviewees this year.
The Association of Foreign Banks in Germany estimates that between 3,000 and 5,000 new jobs will be created in Frankfurt over the next two years as a result of Brexit. Four banks, Citigroup, Morgan Stanley, Nomura Holdings and Standard Chartered, have already selected the German city for their EU headquarters to protect their continued access to the single market. UBS is believed to be considering a similar move, and Goldman Sachs has leased space as part of its Brexit contingency plans.
“Frankfurt always had a solid international base of occupiers, but that has been picking up. There is a big Brexit effect on Frankfurt. You can see it in the investment market and the occupier market as well,” said a German fund manager, one of the interviewees of PwC Emerging Trends Europe.
Surge of Investment activity in Frankfurt
The city has seen a surge of investment activity. According to data from Emerging Trends Europe survey 2018, in the first six months of 2017, €2.8 billion of real estate changed hands, €2 billion in the second quarter alone. High capital appreciation in Frankfurt and with the prospect of job growth coming post Brexit, this will only further enhance the market.
The good vibes of a global city
Frankfurt is more than just Germany’s financial hub. As being German’s most international city, it embraces innovation, bold visions and transformations. Its residents are citizens of the world; they seek out new contacts and career opportunities, and value internationality and diversity. With its universities, green spaces, and thriving art and cultural scene, it is a vibrant metropolis with high quality of life.