There is a growing confidence in the German real estate industry, as in August 2010 King Sturge’s Real Estate Economy Index increased by 8.6%.

The Investment Climate, an indicator for acquisition and investment decisions rose by 8.6% to 132.1 index points, up from 121.6 the previous month. Expectations with regards to the development of rents and revenues, which is expressed in the Rental Income, also increased by 8.6%, reaching a score of 108.7 points compared with 100.1 in July 2010.

Sascha Hettrich, managing partner of King Sturge Deutschland, said: “For the time being, we are seeing the fastest growth since the nation’s reunification. Among other sectors, the construction industry has re-emerged as a growth driver. Following the harsh winter, builders are catching up on production backlogs.”

However, Hettrich warned that although this was positive, there are risks of an economic setback if there are any new upheavals in the financial markets.

Hettrich said: “Most experts are convinced that the recovery can hardly continue at this breakneck speed, and that the economy might indeed cool off during the second semester. So there is ample reason to proceed with caution even if another collapse no longer seems likely.

“Above all, there is the fact that the economic stimulus plans are about to expire. Yet assuming the slowing economy will not slide back into a recession, there is a very real chance that we will see a robust growth extend into the coming year.”