Signature Capital [Berlin Property Fund]

J

Jack The Lad

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Sherry Fitzgerald / Signature Capital are currently setting up a geared residential property fund, primarily focused in Berlin. 7-10 years, expecting 15% pre tax return p.a. Is that return realistic?
 
Is that return realistic?
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I don't think that the question makes any sense. Given that High Return = High Risk, the real question to be asked is :
Is the level of risk being undertaken to try and achieve this level of return acceptable ?

If I offered you the chance to double your money on the toss of a coin, ie a return of 100% would you feel happy accepting the risk of losing all your investment which such a return entails ?
 
Also - on what basis do they "expect" such returns? If it's on past performance then that's irrelevant . If it's on future performance then nobody can predict the future.
 
Valid points. And thank you.

Personally, from what I know, and this is very much a layman's knowledge, Berlin looks like it's worth the risk. To JPD I would say I think the possibility of losing everything is very low. Again, this is laymans knowledge, and I'd be a fool to say otherwise.

So I need some advice.

My primary question is... is there anyone out there who knows Germany and Berlin well enough to make an educated guess and say either "that looks like a good one", or "don't touch it with a barge pole".

In reply to ClubMan's post ...I'm trying to collect enough information to make a decision as to whether the basis on which they expect these returns is valid or not.
 
Hi Jack,

I have looked into investing in Germany, particularly Berlin....certainly looks good on paper and the chances of prices dropping are not that great since the market has bottomed out (relatively).

There were a number of investment syndicates offered late last year and early this year: all with Capital in their name and all with a minimum investment amount of €100,000...

IMHO, the rental return seems to be valid (circa 7% pa)- I lived in Germany for many years and most people do rent - the rental return is good, landlords have strong rights etc.

The capital appreciation is the part that I cannot get my head around, you see if most people rent in Germany - who is going to buy these properties at an inflated rate in 5 - 7 years so as the investor can realise the profit...??

I would be more interested in German Commercial property TBH..
 
Actually an interesting point of view from Deutsche Bank on Berlin residential property:

"Until the economy in Berlin gets back firmly on its feet, a strong
increase in rents and prices is unlikely. But at least the markets have
moved towards equilibrium following the upheaval of the postreunification
years. Drastic price slides on the market as a whole are
consequently no longer to be expected.
Of course, the city’s budgetary plight will force it further to examine its
commitment on the housing market. We expect the public authorities
gradually to retire from their active role as landlords and sell off more of
their housing stock – either directly to the tenants or through
intermediaries. Portfolio disposals of this kind could trigger significant
price markdowns. In the round of privatisation, sales prices in this
(lower) price segment are then likely to give way.​
​
"

Something the Syndicates don't mention is that the German government own a lot of property in Berlin that they rent and are waiting to sell it when recovery rears it's head - this will flood the market and may even cause a further downturn in Prices.​
 
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