Irish investors may invest a remarkable €500 million in the German property market this year.

Irish money is flowing into German property with about €200 million invested over the past six months, according to industry commentators.

Colliers Jackson-Stops held a seminar on the German market last week that attracted no less than 100 potential investors.

They heard how the German market has rebounded on improved growth figures and that income returns in the order of five to seven per cent easily beat the typical four per cent seen on the home market.

The €200 million figure was a "conservative estimate" according to the company's head of investment services, Jonathan Hillyer.

He told the seminar that as much as €500 million may be injected into the German market by Irish investors looking for fresh fields and new opportunities.

"Last year foreign investors accounted for 53 per cent of all commercial transactions, which is unprecedented," he said.

"US, UK and Irish investors accounted for around 70 per cent of that investment. Never before has the German market seen such overseas investor interest," he added.

Signs of an economic recovery are fuelling interest, according to Colliers Property Partners' managing director in Dusseldorf, Marc Kleinpeter.

"After several years of poor economic growth and low demand from consumers and companies we are now seeing signs of a recovery in the German economy which has seen some markets increase take up and rents have also risen," says Kleinpeter.

"The market is likely to see a marked recovery in the short term, so those considering investing should begin due diligence now."

The Irish seem to be responding to this emerging opportunity, Hillyer suggests. "Certainly we have seen huge interest from Irish investors who are keen to take advantage of the window of opportunity which exists, particularly in the €5 million to €50 million investment bracket, where there is a shortage of buyers."

The office market may offer the best returns as rental incomes begin to firm, he says.

Yet retail also remains attractive due to good returns and the quality of the product available, he adds.

Rental increases tend to be in line with inflation, which delivers moderate rental growth during the life of a lease, Hillyer says. "However, by agreeing short leases, with no options to renew, an investor can, on renewal hopefully increase rents over and above inflation."