India's Tax Structure Encourages Foreign Investment in Credit Markets

Taxation reforms are necessary to encourage domestic investment in India's credit markets and address rate disparities between domestic and foreign investors. Real estate remains an attractive sector for investment, while credit strategies are experiencing the fastest growth in assets under management (AUM) over the past couple of years.

Germany's real estate investment market has demonstrated a robust recovery in the first quarter of 2025, with transaction volumes surging by 17 percent to €7.4 billion compared to the same period in 2024 Ongoing recovery in the German real estate investment market^[1]. The residential segment played a pivotal role in driving this growth, with a transaction volume of nearly €2.2 billion, almost tripling from the first quarter of 2024. The office property segment also experienced notable advancements, moving up to the second rank due to the sale of the Upper West in Berlin.

Large-scale transactions accounted for 40 percent of the total transaction volume, with three residential transactions and seven commercial transactions each exceeding €100 million. The residential segment, in particular, saw significant growth with three transactions over €100 million, while the commercial segment had seven such transactions. This indicates a strong appetite among investors for large-scale properties, especially in the residential sector.

Portfolio transactions also witnessed a substantial increase, rising by 73 percent to €2.6 billion. The proportion of investment volume accounted for by the top seven cities, however, decreased by 12 percentage points to 35 percent, indicating a shift towards smaller cities and regional markets.

Interest rates have been a significant factor in the real estate investment market. The European Central Bank (ECB) is expected to lower key rates further to stimulate growth in the eurozone economy. Yields at the long end of the yield curve are stabilizing, with the five-year euro swap rate falling by nearly 30 basis points since the German government's special fund announcement. This trend is favorable for real estate investments, making them more attractive to investors.

The residential sector remains the strongest asset class, followed by office properties, retail, and warehouse/logistics properties. Yields in prime office properties and high street properties remained stable, while yields in grocery-anchored retail parks and food markets experienced slight compression.

Looking ahead, the market is expected to maintain its positive momentum throughout 2025. CBRE Germany anticipates a full-year transaction volume of at least €40 billion, driven by a well-filled sales pipeline. However, the 'buy, hold briefly and sell quickly' strategy is likely to be successful in isolated instances, and active asset management is essential for long-term success.

The global economic uncertainty could make German real estate a safe haven for investors, especially if the new German government implements important reforms and effectively deploys funds for infrastructure and defense, boosting economic growth and sustainability.