• Germany edition
 
Investors spy big bucks in day-care crunch
Photo: DPA

Investors spy big bucks in day-care crunch

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

As German authorities scramble to create thousands of day care places by a 2013 deadline, many investment firms are sensing opportunity and setting up "day care-facility funds" that promise solid returns over several years.

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.

DPA/The Local/arp

The Local (news@thelocal.de)

Don't miss...X
Left Right

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
New app helps clients find prostitutes
Photo: DPA

New app helps clients find prostitutes

While the German government is considering tightening prostitution laws, Berlin entrepreneurs have developed a smartphone app to connect sex-workers with clients. READ () »

Highs of 22C forecast for Easter weekend
Photo: DPA

Highs of 22C forecast for Easter weekend

The days running up to Easter may be cool and wet, but the holiday weekend should be a bit warmer for most of Germany, according to forecasters. READ () »

Berlin man must call himself a mother
The fight over the transgender man's right to be his child's official father has been raging since last year. Photo: DPA

Berlin man must call himself a mother

A transgender person who became the first man in Germany to give birth in March 2013 must be registered as the child's mother, a court has ruled after his year-long court battle to be named a father. READ () »

Study: rape convictions fall sharply
Photo: DPA

Study: rape convictions fall sharply

The chance of being convicted of rape in Germany has more than halved in the past two decades to fewer than one in ten, a major study revealed on Thursday. READ () »

SPD: Restore 45-percent investment tax
The tax privilege for investment income is unfair, says the SPD. Photo: DPA

SPD: Restore 45-percent investment tax

The centre-left half of Germany's coalition government has called for the old top rate of a 45-percent tax on investments to be brought back - to match standard income tax and fight the squeeze on middle incomes. READ () »

Customs find smuggled cash in every third car
Sniffing out the money. Photo: DPA

Customs find smuggled cash in every third car

The number of Germans smuggling large amounts of cash across the Swiss border into Germany rose dramatically last year. Customs officers said on Thursday they made a find in almost every third car they checked. READ () »

Crystal meth use hits record level
Crystal meth seized in Bavaria. Photo: DPA

Crystal meth use hits record level

Consumption of crystal meth in Germany appears to have reached a record level, according to government figures published on Thursday. READ () »

Child's near death sparks row over refugee homes
Leonardo had to have a finger and toe amputated after staff refused to call an ambulance. Photo: DPA

Child's near death sparks row over refugee homes

A political row has broken out in Bavaria after an asylum seekers' home failed to help a toddler who almost died of meningitis. The case has raised concerns about the treatment of refugees in the state. READ () »

Bayern and Dortmund to face off for German Cup
Kaiserslautern fans let off flares in the Allianz Arena on Wednesday night. Photo: DPA

Bayern and Dortmund to face off for German Cup

Holders Bayern Munich will face Borussia Dortmund in next month's German Cup final after cruising to a 5-1 win over second-division Kaiserslautern in Wednesday's semi-final. READ () »

Zalando hits back after undercover report
Working conditions at online retailer Zalando are under the spotlight. Photo: DPA

Zalando hits back after undercover report

Online fashion retailer Zalando has prompted an investigation by state prosecutors in Erfurt against an undercover journalist who revealed alleged "trade secrets" in a TV report on Monday night. READ () »

RECEIVE OUR NEWSLETTER AND ALERTS
Photo: DPA
Rhineland
Elderly man taped €200,000 to his genitals
Photo: DPA
Business & Money
What's the unemployment rate in your area of Germany?
Photo: DPA
Gallery
Nine ways to celebrate Easter like a German
Photo: Galerie Bilderwelt
Gallery
World War I in colour photos
Photo: DPA
Society
'The mafia has infiltrated every sector in Germany'
Photo: DPA
Society
JobTalk: Why you should teach English in Germany
Photo: DPA
National
330,000 sign up against TV licence fee
Photo: DPA
Hamburg
School kids hospitalized after 'porno' party
Photo: Submitted
Frankfurt
'I'll get even with my old pal Schwarzenegger'
Photo: DPA
Gallery
The week in pictures: April 5th - April 11th
Photo: DPA
Gallery
Ten great inventions you (probably) didn't know were German
Photo: J. Arthur White
Berlin
Clashes in Berlin as refugees tear down their own camp
Advertisement:
Photo: DPA
Gallery
Munich's baby polar bears are finally named
Photo: DPA
Gallery
The 10 best German employers to work for
CurrencyFair
Sponsored Article
Why it pays to avoid banks when making overseas transfers
Mr. Lodge
Sponsored Article
How to find a furnished rental in Munich
Sponsored Article
How to make a lasting impression in business
Hult International Business School
Sponsored Article
What they don't teach you at Business School
Photo: DPA
Society
Nine jobs you can only do in Germany
Photo:ESL
Sponsored Article
How to integrate successfully in Germany
Photo: DPA
Business & Money
JobTalk: All you need to know about working in Germany
Photo: DPA
Features
The Local List Archive - Your guide to all things German
National
Share news tips with The Local Germany
Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Latest news from The Local in Sweden

More news from Sweden at thelocal.se

3,143
jobs available
Toytown Germany
Germany's English-speaking crowd