• Germany's news in English
 
app_header_v3

Investors spy big bucks in day-care crunch

The Local · 19 Nov 2012, 10:38

Published: 19 Nov 2012 10:38 GMT+01:00

Demand for places in day care facilities in Germany is rocketing, and local authorities must make room for another 220,000 children between the ages of one and three by August 2013, when it becomes law that all children of that age have access to a spot.

"Day care funds are the logical continuation in the chain of real estate products that tie into people's life cycle," said Wolfgang Kubatzki, an executive board member with the rating agency Feri EuroRating Services.

Much like dormitories and other care facilities, day care centres can offer investors long-term security - not least due to the length of rental contracts, which often run for two decades or more.

Despite some warning signs of a property bubble in Germany, many investors feel that real estate is still a good choice, in light of inflation fears and low interest rates. And the operators of day care facilities, which include local authorities, churches and private groups, are thought to be much better positioned to weather annual rent increases.

Aviarent Capital Management, a Luxembourg-based asset management company, was the first to hop on board - with a fund worth a total of more than €50 million. In October of last year, the firm bought a former school in the western German city of Essen and converted it into a kindergarten.

Unlike Aviarent's day care fund, which is targeted toward institutional investors like insurers and pension funds, the Habona Invest company in Frankfurt is looking to offer individuals the chance to get in on the trend - and analysts are convinced that other asset management companies will start offering similar funds in future.

Yet despite solid demand for day care, pouring money in the facilities is not necessarily a risk-free investment. Closed-end funds, like the one offered by Habona Invest - generally come with a lock-in period - and there is always the chance that a seller may be unable to get a suitable price for his property.

Story continues below…

DPA/The Local/arp

The Local (news@thelocal.de)

Your comments about this article

12:27 November 19, 2012 by Berlin fuer alles
Going to result in a lot of noise in some buildings. I foresee lots of objections and rent reductions from tenants when these are set up.
14:08 November 19, 2012 by veetann
Comment removed by The Local for breach of our terms.
Today's headlines
Naked swimmer hospitalized after angler hooks his penis
File photo: DPA

When a man swimming naked in a Bavarian lake felt a strange pain in his nether regions, he looked up to see a fisherman on the shore. "Don’t pull!" he shouted.

Study finds rival Rhineland beers 'actually taste the same'
Left: Altbier. Right: Kölsch. Or can you even tell? Photos: DPA.

Cologne and Düsseldorf have a long established rivalry, not least over who has the better home brew. So the results of a new study might be more than they can swallow.

Eastern Europe pushes Germany for joint EU army
Angela Merkel (l), Beata Szydlo and Victor Orban. Photo: DPA

Eastern EU countries on Friday pushed for the bloc to create a joint army as they met with Germany for talks on sketching Europe's post-Brexit future.

Merkel’s party mate wants to get rid of all Karl Marx streets
Karl Marx and one of the roadways in Berlin named for him. Photos: Wikimedia Commons, Nicor

Hundreds of streets are named after the founder of communism, but this conservative politician wants to give Marx the boot.

State elections
6 reasons why Berlin is now known as 'the failed city'
Photo: DPA

With state elections around the corner, The Local looks at the poor side of Germany's "poor but sexy" capital city.

Upstarts RB Leipzig plan to go right to top of Bundesliga
RB Leipzig players celebrate scoring against Dynamo Dresden. Photo: DPA

RB Leipzig make their Bundesliga debut on Sunday, but the East German outfit, sponsored by energy drinks manufacturer Red Bull, are already far from popular in Germany's top-flight.

Poland criticizes Germany’s 'self-serving' foreign policy
Witold Waszczykowski. Photo: DPA

The Polish foreign minister has said that Germany all too often follows its own interests at the expense of its partners, as Chancellor Angela Merkel prepares to visit Warsaw.

Vast majority of Germans in favour of burqa ban: poll
Women wearing niqab veils in Saudi Arabia. Photo: DPA.

A survey found that the vast majority of respondents were in favour of Germany passing a ban on the full-body veil sometimes worn by Muslim women.

Czech police detain driver for harassing Merkel's motorcade
Angela Merkel. File photo: DPA

Czech police arrested a man on Thursday for attempting to drive into the motorcade of visiting German Chancellor Angela Merkel in Prague, they said.

Teacher convicted for holding kids back after class
Photo: DPA

A music teacher from North Rhine-Westphalia (NRW) has been found guilty of "holding people against their will" after he made some naughty stay kids back after class.

Sponsored Article
Why you should attend an international job fair
Gallery
Germany's 17 Olympic gold medals in pictures
Sponsored Article
Why expats choose international health insurance
Culture
7 American habits that make Germans very, very uncomfortable
Rhineland
Story of a fugitive cow who outwitted police for weeks before capture
Sponsored Article
Why you should attend an international job fair
Culture
Eleven famous Germans with surnames that'll make your sides split
Sponsored Article
Life in Jordan: 'Undiscovered treasure'
Lifestyle
The best ways to get a visa as an American in Germany
14 facts you never knew about the Brandenburg Gate
Society
Ten times Germans proved they really, really love beer
Sponsored Article
Why Jordan is the ‘Different’ East
Lifestyle
What's on in Germany: events for August 2016
Sponsored Article
Five things Americans should know about voting abroad
National
Six things you need to know when moving to Germany
Travel
These 10 little-known German towns are a must see
Sponsored Article
Jordan Pass: your ticket to the experience of a lifetime
International
German scientists prove birds can sleep while flying
Sponsored Article
Jordan: where history meets adventure
Technology
London v. Berlin: Which is better for startups?
Lifestyle
13 mortifying mistakes German learners always make
Sponsored Article
6 reasons expats use TransferWise to send money
Travel
Enter if you dare: Berlin's best abandoned haunts
Sponsored Article
Why you should attend an international job fair
Lifestyle
10 rookie errors all Brits make when they arrive in Germany
Sponsored Article
Five things Americans should know about voting abroad
National
How to get German citizenship (or just stay forever)
Sponsored Article
Jordan: where history meets adventure
Technology
Brexit will turn Berlin into 'Europe’s startup capital'
Sponsored Article
6 reasons expats use TransferWise to send money
Travel
Six soothing day trips to escape the bustle of Berlin
International
'Germany needs to make UK come to its senses'
Features
Six odd things Germans do in the summer
Features
How two gay dads cut through German red tape to start a family
8,546
jobs available
Toytown Germany
Germany's English-speaking crowd