German rent control, energy laws seen hitting housing supply

German housing is likely to experience an even tighter shortfall between supply and demand if rent controls are not liberalised to make homebuilding much more economic, say the top officers of Grainger Plc in Germany and residential asset manager Gebau. Peter Brock, managing director of Grainger Deutschland, told PIE: "The economics of the housing market are not adequately understood by the government. It assumes that investors are all rich and can afford anything." He and Gebau MDs Christian Ploenes and Norbert Mittrop see the balance of the German market undermined by the widening gap between construction costs, boosted by rising raw material prices, and increasingly stringent and expensive energy-efficiency requirements in legislation imposed by Berlin. Grainger, the UK's largest quoted residential property owner, has been in Germany since 2005 and made its first acquisitions in 2006. This time last year it acquired the majority of FrancoRheinMain from listed group Franconoforte. Grainger owns 7,300 German residential units and aims to boost this to build an important counter-point to the group's British assets. German holdings, of which around 5% are commercial, are worth e530m, within which FRM is valued at around e130m. (For full story, log in to download 119 Property Investor Europe, published 4 May 2009)