German Running Yield Dropped to Historic Low

European Central Bank

Photo by Andrea Sartorati / CC BY

At 0.04%, the German running yield reached a new record low on February 24, 2016. The last time the German running yield reached a historic low was in April, 2015 with 0.05% lasting for only three days. After a short boost to 0.08% in July, 2015 the descent continued constantly and finally culminated in the historic all-time low.

Low Running Yield a Reason to Act

Depositors receive even less interests than before. To find alternative investment strategies is complicated but possible, depending on your personal preferences. The German real estate market offers a wide range of investment opportunities and the German capital, Berlin, is of high interest to national and international investors. Thanks to an ongoing positive net migration and 30 million visitors per year the German real estate market is booming and promises attractive returns.

The running yield is the annual income on an investment divided by its current market value. Running yield is a calculation that takes the income from dividends (for stocks) or coupons (for bonds) and divides the income by the market price of the security; the value is expressed as a percentage. A security’s running yield is sometimes used by investors to make buying and selling decisions and investors can use running yields to compare the expected lifetime income yield of various securities.

PONS Atlantic Partners is a consulting firm based in Berlin. Two decades ago we started to focus on site selection advisory and M&A advisory within the USA. We expanded our business activity to real estate consulting and therefore founded Pons Real Estate. Our team has long experience in the American-German economic and trade relation. We know both markets and all their characteristics. Our experts bring analytical skill and specific knowledge about the financial, legal, structural, political and cultural situation in Germany and the US.

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