'This is a better-founded investment wave than the Swedes or the Japanese in the late 1980s,' said Mark Creedy-Smith, City investment partner at Hillier Parker, the chartered surveyors. 'It may only continue for another four months, but some people believe it may continue well into next year. The German insurance companies have not jumped on the bandwagon yet.'
'Until a few months ago, the Germans were conspicuous by their absence from the UK property market,' said Christopher Bach of chartered surveyors Matthews Goodman. 'Their arrival has affected prices, which have sharpened considerably. Yields on some properties have fallen by up to one percentage point.'
German investment funds and some personal investors are now the biggest buyers of property in the City, concentrating on newer buildings with long leases and reliable tenants. Last week, the Hamburg-based property fund, DIFA, paid pounds 73m for an office development owned by MEPC in Finsbury Square in the City, representing the generous price of about pounds 600 per square foot.
'Sellers are scrambling to get to the Germans before they stop buying,' said Mr Creedy-Smith.
Most of the buying has taken place since Britain pulled out of the European exchange rate mechanism in September, resulting in a 15 per cent devaluation of sterling against the mark. While property prices are weak in Britain, property yields for investors are substantially higher over here, at around 9 per cent compared to 5 or 6 per cent in Germany.