Lower growth in income and employment

Owing to similar increases in rents and property prices, basic rental yields
(excluding transaction costs and borrowing) have remained virtually stable at
4% in recent years. However, in view of low interest rates, market-based yields
are likely to be substantially lower, partly under 3%. The dynamic price growth
continued in 2016. Our price projection at the beginning of the year of 7.6% on
the previous year appears to be happening. House prices across Germany
increased by more than 6% by the start of the autumn and list prices in Frankfurt
rose by more than 10% (Immobilienscout24).

However, in spite of this marked
increase, these prices are still quite low when viewed in an international context.
Consequently, according to Numbeo, Frankfurt house prices are more than 30%
below current market levels in London, Paris and Luxembourg.