Assetz® News - World Cup adds to Germany's appeal

World Cup adds to Germany's appeal

12th June 2006 |

With the world's eye now firmly focussed on Germany, there are high hopes that the sustained attention will significantly boost the country's appeal as a solid investment opportunity.

The World Cup has certainly got off to a blistering start and it has already captured the imagination of millions across the globe.

In addition to raising the profile of the country, however, the World Cup in Germany is also leading to very definite economic progress.

As reported by SABC News, stadia have been improved, new roads have been built and the economy has received a general facelift after "five years of stagnation".

The report also estimates £220 a day will be spent by each of the millions of football fans in Germany over the next four weeks, which can only have a hugely beneficial impact on the general health of thousands of businesses.

And it would seem that confidence is already high among Germany's businesses.

Expectations for growth have now reached a six-year high, according to the DIHK chamber of industry and trade, thanks largely to surging export demand. Around 35 per cent of Germany's companies expect their businesses to grow this year, which is the highest proportion since 2000. Furthermore, 43 per cent of respondents to the new survey say that they will boost exports this year, which compares to only six per cent that expect exports to decline.

Returning to the SABC News report, it is claimed the German authorities are now extremely upbeat about the economic effects of the World Cup. Of the expected 1.6 per cent increase in the gross domestic product (GDP) this year, 0.5 per cent will be thanks to the privilege of hosting the tournament.

Additionally, the World Cup has ultimately created 60,000 jobs nationwide and a good third of these will remain after the competition comes to a close.

A report in the Financial Times over the weekend drew particular attention to property investment in Germany. In a report that echoes the sentiments of another recent article in the Observer, Bertrand Benoit says that the potential is now there to be realised.

"Germany is the land the global real estate boom forgot," he says.

"But if the wave of foreign money now hitting the Berlin residential market is anything to go by, that may be about to change."

Mr Benoit says that real estate agents, lawyers and tax advisers throughout Berlin have seen a distinct increase in interest from buyers in Ireland, Britain, Spain and Scandinavia. He says that this sudden interest has "animated the hitherto comatose Berlin property market".

The trend began, it is claimed, with private equity funds, but these were soon followed by smaller investors. This is now being perpetuated by a rising number of direct flights to Germany's capital as investors find the whole buying process much easier.

It is clear that excitement over real estate opportunities in Germany is beginning to rise and with the World Cup final taking place in Berlin in a month's time, this is only likely to escalate in the weeks and months ahead.