German funds identify UK property as key investment

Property bargains in the UK are luring German investment funds to shop for real estate on British shores, it was revealed today.

Money managers in Germany said they have earmarked UK commercial property as a key sector for investment, claiming values have plummeted up to 45% from their highs two years ago.

Before the credit crunch, German property funds accounted for heavy investment in the UK, including landmarks like the Lloyd's building and One Exchange Square in Broadgate.

Matthias Danne, head of Germany's largest real estate mutual-fund firm, Deka, said: "For the first time in five or six years, we can buy Class A properties in prime locations. Two years ago, it was too expensive."

Property fund investors in Germany have an estimated 7.5 billion to spend as banking giants like Deka and Commerz Real AG lead a revival in acquisitions.