DAHLER Invest is expanding its Germany-wide network to include a new office in Central Germany. Based in Leipzig, the company – which specialises in investment property – will in future focus in particular on the Leipzig, Dresden, Halle and Chemnitz markets. Bastian Kunau (43) is in charge of the office. Together with Annett Vibe, Robby Kuhnert and Oliver-David Lellé, he advises owners and investors on the sale and purchase of blocks of flats as well as residential and commercial properties.
“With this new office, we are opening up a diverse investment market for our clients. Leipzig, in particular, has attracted significantly more attention from investors outside the region in recent years,” says Philip C. Hetzer, Managing Partner of DAHLER Invest. “Bastian Kunau and his team bring the market knowledge and contacts needed to effectively match property owners with prospective buyers in the region. In recent years, they have facilitated residential transactions totalling more than 700 million euros in the region. With this experienced team, we are adding a key component to our nationwide network.”
Kunau has many years’ experience in the residential and mixed-use property sector. At Colliers, he established the relevant business division in Leipzig and Dresden from 2019 onwards as Head of Residential Investment. In 2022, he also took on the role of Co-Head of Multifamily Germany. He shares a professional history with Annett Vibe and Robby Kuhnert: both were previously part of the Leipzig residential team at Colliers and had played a key role in establishing and developing the office since 2019. Kuhnert also worked for the Künne Immobilien Group.
Existing properties dominate the market
The market is characterised by existing properties. The range of multi-family homes, as well as residential and commercial buildings, often comprises properties that were refurbished in the 1990s. For investors, therefore, in addition to location and the letting situation, the current condition of the building and the foreseeable need for modernisation are particularly crucial.
“A refurbishment in the 1990s is an important part of a property’s history. However, when it comes to the investment decision, what matters is what measures have been carried out since then and what investments are due in the future,” says Bastian Kunau, Site Manager at DAHLER Invest Central Germany. “We therefore consider the existing rental income, the development potential and the condition of a property in conjunction with one another. This allows us to assess whether a property fits the buyer’s strategy and investment framework.”
Leipzig: Purchase prices stabilised, rents risen
According to Kunau’s assessment, purchase prices for blocks of flats as well as mixed-use residential and commercial properties in Leipzig have fallen significantly since the interest rate turnaround in mid-2022. He estimates the correction at around 25 to 30 per cent. He is now observing a stabilisation. It remains to be seen how further changes in interest rates will affect buyers’ willingness to purchase and price trends.
Rents, on the other hand, have risen significantly in recent years. According to Kunau, this increase has been driven in particular by the rising number of households, the low level of new-build activity in Leipzig, and the low baseline rent levels. Nevertheless, rents in Leipzig remain below those in comparable major German cities.
“Leipzig combines dynamic demand growth with a large stock of investment properties. This makes the city attractive to both private and professional investors,” says Kunau. “Following the correction in purchase prices, investors are now facing a changed entry level, whilst rents have continued to rise. We see opportunities above all in properties whose yield potential can be realised, taking into account the investment requirements and the legal framework.”
Kunau assesses Leipzig and Dresden as largely similar in terms of current conditions on the investment market. He sees differences particularly in the ownership structure: whilst Dresden is more strongly characterised by regional owners, supra-regional capital plays a greater role in Leipzig. On the buyer side, too, a significant proportion of transactions in Leipzig involves investors from outside the region.
“Particularly in a market with many supra-regional players, the combination of a local presence and a nationwide network is especially valuable,” says Vincent Papke, Managing Partner at DAHLER Invest. “Our team in Central Germany understands the regional specifics and can, at the same time, draw on the contacts and investment expertise of our entire network. This benefits owners when approaching buyers, as well as investors when searching for suitable properties.”
