• Germany's news in English
 

Investors spy big bucks in day-care crunch

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.

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
July asylum applications hit 'all-time record'
An asylum seeker reception centre in Trier. Photo: DPA

July asylum applications hit 'all-time record'

More people applied for asylum in Germany in July than in any previous month on record, the Ministry for Immigration and Refugees announced on Friday. READ  

This Week in History
The 1,000s of Germans massacred after WWII
Germans fleeing from eastern Europe after the Second World War. Photo: Wikimedia Commons

The 1,000s of Germans massacred after WWII

Seventy years ago on Friday, a munitions depot exploded in the Czechoslovakian town of Ústí nad Labem. For the thousands of Sudeten Germans who lived in the town, the event was a death sentence. READ  

Minister seeks to rid laws of 'Nazi language'
In the center, Nazi lawyer Roland Freisler, who wrote laws that are partially still in existence today. Photo: German Federal Archive / Wikimedia Commons.

Minister seeks to rid laws of 'Nazi language'

Germany has made great efforts to purge legal system of remnants of Adolf Hitler's regime, but some laws still bear traces of the Nazi past. The Justice Minister wants to change this. READ  

Treason investigation of Netzpolitik halted
Netzpolitik published documents outlining the internal spy agency BfV's spy programmes and budget. Photo: DPA

Treason investigation of Netzpolitik halted

Update: Federal prosecutors announced on Friday they are suspending investigations of treason against 'digital rights' website Netzpolitik for 'the greater good' of upholding freedom of the press. READ  

Newborn baby found in Munich airport toilets
Munich Airport. Photo: DPA

Newborn baby found in Munich airport toilets

A newborn baby was found in a toilet in Munich airport on Thursday. Police so far have no clue as to who or where the mother is. READ  

Brit arrested in Munich for meth smuggling
Photo: BVZ/Zoll

Brit arrested in Munich for meth smuggling

A 50-year-old British woman is being held in custody in Munich on suspicion of attempting to smuggle two kilos of crystal meth out of Munich airport disguised as sweets. READ  

Start-up helps new Berliners slash red tape
Hate waiting in line at the Bürgeramt? There's a company that lets you pay to get the perfect appointment. Photo: DPA.

Start-up helps new Berliners slash red tape

Why waste time jumping through the hoops of German bureaucracy when you can pay someone else to take the hassle off your hands? A new Berlin company is offering to do just that - and it's got city officials fuming in the process. READ  

Michael Jackson shrine may have to beat it
A fan visits the makeshift Michael Jackson memorial in Munich. Photo: DPA.

Michael Jackson shrine may have to beat it

A memorial set up in Germany by some of Michael Jackson's most ardent fans the day after his sudden 2009 death has come under threat in a strangely emotional turf war. READ  

Ai Weiwei in Germany as UK slammed over visa
Chinese artist and dissident Ai Weiwei arrived at Munich airport on Thursday, greeted by his son and son's mother, filmmaker Wang Fen. Photo: DPA.

Ai Weiwei in Germany as UK slammed over visa

Chinese dissident artist Ai Weiwei arrived in Munich on Thursday on his first overseas trip since he was arrested nearly four years ago, after Britain denied him a six-month visa because he did not declare a supposed "criminal conviction" on his application. READ  

'Women-only' parking: sensible or sexist?
Regulations for women's parking spaces differ from state to state across Germany. Photo: JG-NF / Wikimedia Commons.

'Women-only' parking: sensible or sexist?

Frankfurt Airport is one of many places in Germany to offer women their own 'bigger and nicer' parking areas. Is this sensible practice or plain sexist? READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Sport
Germany star scores own goal with PR gaffe
Features
'Women-only' parking: sensible or sexist?
Politics
Satire and reality blur in parody party's strife
National
13-year-old boy detained for trying to join Isis
Culture
Berlin restaurant serves up Greek Crisis Menu
Rhineland
Doctor on trial after woman wakes in morgue
Society
Six odd things Germans do in the summer
Sponsored Article
Outsourcing drives Apreel's Europe growth
Society
Police bust kinky Bavarian couple over painful love-making
Politics
Merkel brings Palestinian girl to tears
Hamburg
Amateur archaeologist finds Nazi gold hoard
National
Could Merkel learn a lesson in love from this doppelganger?
Travel
Why you should stay in Germany for the summer holidays
Sport
German press tell Schweinsteiger 'good riddance'
National
Hamburg gets a bouncing 100kg baby girl
Society
In North Germany, money sometimes DOES grow on trees
National
Hero mechanics stop Bavaria shooting spree
International
Denmark says that border controls are coming
National
Did hackers take control of German missile battery?
Politics
Munich gives gay pride green light
Business & Money
Berlin rent controls hit prices hard
National
Fighting to breastfeed in public without shame
Society
Ice cream for dogs 'gobbled up in one gulp'
Education
Are hotpants a feminist issue?
Rhineland
Lion cub reunited with mother
National
How the heatwave is cracking Germany's Autobahns
International
Why the French are more sympathetic to Greece than the Germans
Sponsored Article
Crans-Montana: International expat hub
Gallery
Police seize pensioner's WW2 heavy weapons haul
National
How to survive the Europe-wide heatwave
Sport
Is Schweini already out of the door at Bayern?
Politics
How German media shaped the Greece crisis
National
Car assembly robot crushes worker at Volkswagen
Rhineland
Weathermen red-faced over heatwave snow warning
Society
An eye for an eye? Mum protects child in playground with pepperspray
National
As it happened: Queen Elizabeth's final day in Germany
National
As it happened: Queen Elizabeth's second day in Germany
National
Queen Elizabeth II's first day in Germany - as it happened
National
Bus passengers tell fake racists where to get off
Politics
What's really in the Queen's handbag?
National
Germans say USA doesn't respect freedom
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

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

7,254
jobs available
Toytown Germany
Germany's English-speaking crowd