In order to create more transparency in the area of ground leases and their developments on today's housing market, the real estate service provider JLL, in cooperation with the German Ground Lease Association (Deutscher Erbbaurechtsverband), has published a study that sheds light on both the view of ground lease providers and the assessment of private-sector investors. Thanks to the high level of participation of ground lease lenders in the study, the evaluations present representative results on topics such as the "level of the ground rent", "terms of contracts" or "compensation rules in the event of breach of contractual obligations".
In addition, investors and housing companies from the private sector were asked what factors determine their decision for or against investing in ground leases and what a lucrative ground lease contract might look like. Although ground leases have so far been a market dominated by churches, municipalities and foundations, the interest of private-sector investors is increasingly coming to the fore.
In addition, the study "Leaseholds in the Housing Market. The perspective of ground lease providers and that of investors" also examines the question of whether investing in ground leases could be an answer to the shortage of affordable housing in Germany or a fallback strategy against the low returns on the real estate market for private investors. The study was published in March of this year - one year after a very special birthday. That's because the Erbbaurechtsgesetz (German Ground Lease Act) came into force around a hundred years ago, in 1919.
Source: JLL / German Leasehold Association
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