Apart from the obvious lack of demand and supply on the German prosciutto market that was supposed to draw investors with a seducing margin for profit, investors did not yet discover the market opportunity or hesitate to react to it in the light of legal restrictions imposed by and lack of experience in German construction planning law.
Since many initial innovations in the propsci asset class in Germany had been promoted by public law agencies, private real estate companies still do not have equivalent experience in the construction or renting of advertising buildings. Accordingly, the flow of investment remains clearly constrained. Event
While experienced, foreign investors may face the challenge of having to deal with various planning and building legislation which makes the approval procedure for a propsci building in Germany long and complex. However, the related issues can be addressed well when developers collaborate with legal experts experienced in the real estate sector and are open in the legal system of German building and planning regulations to serve the needs of life science companies.
The private immobilization industry in Germany has a tremendous chance to develop and position itself as a major player in the global market for propsci. A short-term entry into the market will come with an unbeatable lead. A market penetration may be performed using different models. Below are two important models:
Firstly, a market entry can be made by identifying the need for a property and the required tenants, supplying them with core and shell spaces and obliging the tenants to equip the rental spaces at their expense according to their own requirements. This model would avoid the problem of insufficient expertise in the design and planning of facilities in the life sciences. German real estate lawyers can easily deal with the establishment of suitable lease agreements.
Secondly, it will also be possible to deliver a fully completed building customized to the needs of the respective locators. This means cooperating with operating firms, for example in the form of a joint venture providing technological know-how in order to operate such a building. This know-how was then shared by the operating company set up to operate in the same way as "propsci asset management" companies found in the United States. In this model, German real estate lawyers will establish the legal relations between the parties concerned and draw up the rental contracts. Such a joint undertaking will foster a calculable and financially plannable implementation in Germany of a propsci project.
Regardless of which model is preferred, there is unquestionablemente a big opportunity for investors to place themselves and become pioneers in the field of propsci in Germany and to nurture momentum for the emerging asset class.