ALDI Nord as a Tenant: A Network Being Rebuilt Around Bigger Stores

ALDI Nord trades from about 2,200 German stores, down from the 2,500 it reached in 2006, yet in 2025 its German sales rose 5.9% and group sales 7.4%, to more than €31 billion. The stores are growing instead: in Wolfsburg in 2025, a new building lifted one store's sales area from about 800 m² to 1,300 m². For an investor, the open question is less ALDI Nord's strength than whether it will still want a given building in 15 years' time.

Key takeaways
• ALDI Nord turned over more than €31 billion in 2025 (+7.4%) from 5,526 stores in eight countries, about 2,200 of them in Germany. With ALDI Süd it holds about 15% of German food retail (Bundeskartellamt, 2025 data).
• One company, ALDI Immobilienverwaltung GmbH & Co. KG, describes itself as tenant or owner of ALDI Nord's German stores (2026); we found no public credit rating.
• ALDI Nord's published criteria for a stand-alone store (2026): a plot of at least 3,500 m², more than 10,000 inhabitants and 800 m² of sales area or more.
• ALDI Nord offers investors sale-and-leasebacks (2026) and was reported in 2025 to be selling at least 50–60 properties.

Three family foundations own a group growing faster than its market

ALDI Nord's property company is the counterparty — but check the lease

ALDI Nord's published site criteria favour space and central locations

ALDI Nord negotiates on its own template and now sells property too

Small stores on plots that cannot grow carry the risk

Implications for investors

Before you buy an ALDI Nord store:
• Which ALDI company is the tenant, and does a parent company guarantee the lease?
• Does the plot reach 3,500 m², and does the development plan allow a larger sales area?
• How does the sales area compare with the 1,050–1,300 m² of ALDI Nord's current examples?
• What do the term, options, indexation clause and roof-and-structure clause say?
• If ALDI Nord is selling: why this store, and is the rent in line with the local market?

ALDI Süd as a Tenant: An Owner-Occupier First, a Tenant Second

ALDI Süd prefers to be its own landlord; its leased stores are the minority, and each exists for a reason. About 65% of its German stores were its own property in 2023, according to Lebensmittel Zeitung, and that year it bought 76 of its stores from Pimco Real Estate. For an investor, two questions decide the value: why is this store rented, and what will ALDI Süd do when the lease ends?

Key takeaways
• ALDI Süd runs about 2,000 stores in southern and western Germany (2026); NIQ Trade Dimensions estimates its German sales at €20.5 billion including VAT for 2025. With ALDI Nord it holds about 15% of German food retail (Bundeskartellamt, 2025 data).
• The Siepmann foundation owns the group (Handelsblatt, 2018); the latest worldwide revenue we found reported is €83 billion (2023). We found no public credit rating.
• Its standard stand-alone store needs a plot of at least 5,000 m², a shopping-centre store at least 1,000 m² of usable area (2026).
• Of 24 regional companies, only 12 are to keep their own administration (Lebensmittel Zeitung, May 2026): check who signed a lease and who manages it now.

A foundation owns ALDI Süd, and independent regional companies run it

ALDI Süd does not name its signatory, and its regions are consolidating

ALDI Süd owns most of its stores and wants large plots

Lease terms follow the sector template, in our experience

A tenant that prefers to own can build its own store nearby

Implications for investors

Before you buy an ALDI Süd store:
• Which ALDI company signed, does it still exist in that form, and who manages the lease after the restructuring reported in 2026?
• Why does ALDI Süd rent here rather than own, and when was the rent set?
• Does the plot reach 5,000 m², and does the development plan allow a larger sales area?
• How does the sales area compare with the 1,150 m² of ALDI Süd's 2025 Nuremberg store?
• What do the term, options, indexation clause and roof-and-structure clause say?
• Do the land register or the lease contain a pre-emption right or purchase option?

dm as a Tenant: The Covenant Is Rarely the Question — the Store Format Is

dm is Germany's largest drugstore chain by sales: €19.2 billion including VAT in the year to September 2025, €13.3 billion of it in Germany, where 2,154 stores serve 2.2 million customers a day. In our experience its leases are signed by the national operating company, owned by a charitable foundation and the Lehmann family. The covenant is rarely the issue; the building is — dm adds few stores and is renewing hundreds, so a unit that misses its format is the one at risk.

Key takeaways
• dm turned over €19.2 billion including VAT in the year to September 2025 (+8.2%), €13.3 billion in Germany, and reports a 27.5% share of German drugstore-product sales.
• In our experience, leases are signed by dm-drogerie markt GmbH + Co. KG, the Karlsruhe headquarters company; dm is unlisted, and we found no public credit rating.
• An average of 2.2 million customers a day in Germany (2024/25), roughly 1,000 per store (our calculation), makes a drugstore the natural partner of a supermarket and a discounter.
• The network is mature: 2,069 German stores in 2020/21, 2,154 in 2024/25. dm's published criteria — in a retail park, 500 m² at ground level and about 50 parking spaces — are the yardstick.

A privately owned market leader funds growth from cash flow

The tenant is the headquarters company, not a store company

dm wants ground-floor space, parking and 20,000 people within reach

Published renewals show dm committing for a decade or more

The risks sit in the building, the anchor and the channel

Implications for investors

Before you buy a dm store:
• Confirm that the lease names dm-drogerie markt GmbH + Co. KG, Karlsruhe, and read the subletting clause.
• Measure the unit against dm's criteria: in a retail park 500 m² at ground level, about 120 m² ancillary space and about 50 parking spaces; in town 400 m² and an 8 m frontage.
• Ask whether the store has been, or will be, refurbished in dm's new design.
• Compare the drugstore's fixed term and options with the supermarket's and the discounter's.
• Check the indexation threshold, the share passed on and who pays for roof and structure (Part 10).
• Obtain the complete lease file, every addendum included (Part 7).

EDEKA as a Tenant: The Logo Is National, the Covenant Is Regional

EDEKA is Germany's largest food retailer, with about 30% of the market and €77.3 billion of sales in 2025, yet no single EDEKA company stands behind its stores. The group is a cooperative of about 3,200 independent merchants, six regional companies and a Hamburg head office; at the end of 2025 merchants ran 5,629 of its 6,438 EDEKA stores. For an investor, the name in the signature block — a regional company or a merchant's own company — matters more than the one above the door.

Key takeaways
• EDEKA held about 30% of German food retail in 2025 (Bundeskartellamt) and turned over €77.3 billion, yet we found no public credit rating for any EDEKA company.
• Merchants ran 5,629 of the 6,438 EDEKA stores at the end of 2025; the regional companies ran 809 and handed 68 to merchants that year. The operator can change during a lease — the signatory should not.
• Site criteria are set by region: the head office's 2026 brochure starts at 800 m² of sales area in high-footfall locations, EDEKA Südwest at 1,200 m² and 80 parking spaces.
• Competition law can remove EDEKA as a bidder: since 28 September 2026 no part of the group, merchants included, may buy or lease 24 tegut sites for four years.

EDEKA's merchants own the group; Hamburg steers its strategy

A regional company's lease is a different credit from a merchant's

EDEKA wants larger stores, on regional terms

In our experience, EDEKA leases run 15 years with options

Signatory, size and competition law carry the risk

Implications for investors

Before you buy an EDEKA store:
• Which entity signed (regional company, property subsidiary or merchant), and what do its accounts show?
• Is the store sublet to a merchant, and may the lease pass to the merchant without your consent?
• Does a guarantee from a regional company or EDEKA ZENTRALE back the lease?
• Does the store meet its region's criteria, and does the zoning allow it to grow?
• If the lease names EDEKA Nord or EDEKA Rhein-Ruhr, which entity holds it since the 2026 merger?
• Is the site one of the 24 tegut locations, or in a market EDEKA already leads?

Kaufland as a Tenant: A Strong Covenant in a Box Few Others Can Fill

When Mein Real closed its last 49 hypermarkets in March 2024, Kaufland sought up to 23: even the most natural successor, which had taken over more than 100 former Real stores, wanted fewer than half. Kaufland itself is a strong tenant — €36.7 billion of store sales in the year to February 2026, 790 German stores — and wants at least 2,500 m² of sales area on any new site (2026). An investor in a Kaufland store therefore buys the lease term and the strength of the location as much as the covenant.

Key takeaways
• Kaufland runs 790 of its more than 1,600 stores in Germany (2026); with Lidl, the Schwarz Group holds about 25% of German food retail (Bundeskartellamt, 2025 data) and publishes no profit figures.
• Kaufland favours owning its sites: Lebensmittel Zeitung put its property at a book value of about €4.1 billion (2020). Its leases are renewed case by case — early in Seelow in 2026, but not in Fellbach in 2025, where talks with the owner failed.
• Kaufland is a landlord as well as a tenant: it lets 13,700 units totalling more than 1.4 million m² at its sites in eight countries (2026). Where Kaufland itself rents, those lettings can end with its lease.
• Re-letting is the risk to price: Germany has 689 hypermarkets (BNP Paribas Real Estate, 2025). The Bundeskartellamt reviews takeovers store by store; in 2020 Kaufland dropped nine of the 101 Real stores it sought.

Kaufland shares Lidl's owners, scale and silence on profits

The tenant is a group partnership — and often a landlord itself

Kaufland wants 2,500 m² and prefers to own the ground beneath it

In our experience, Kaufland leases are long and indexed

Re-letting a hypermarket is the risk to price

Implications for investors

Before you buy a Kaufland store:
• Which Kaufland company signed — register number, successor if merged — and does a group company stand behind it?
• What do the remaining term, options, indexation, maintenance and special termination clauses say?
• Which shop units depend on Kaufland's head lease, and what happens to them if it ends?
• Who else could run 2,500 m² or more on this site, and would the Bundeskartellamt allow it?
• Does the development plan restrict the site to food retail, and could the building be divided?
• Does Kaufland hold a pre-emption or purchase right over the property?

Lidl as a Tenant: Its Own Site Criteria Are the Renewal Test

For a landlord, Lidl's strength is not the open question: NIQ Trade Dimensions estimates its German sales at €34.8 billion in 2025, about €2 billion below ALDI Nord and ALDI Süd combined. The open questions are which regional company signed the lease — many share one name — and whether the store meets Lidl's published standard: 1,000–1,400 m² of sales area and at least 100 parking spaces (2026). A store that falls short is one that Lidl, which prefers to build and own, may replace with its own.

Key takeaways
• Lidl's stores sold €140.2 billion worldwide in the year to February 2026; with Kaufland, the Schwarz Group holds about 25% of German food retail (Bundeskartellamt, 2025 data). The group publishes no profit figures, and we found no public credit rating.
• Lidl prefers to own and sometimes sells: in 2024 it sold 16 stores to Captiva for about €120 million (BNP Paribas Real Estate). Investors therefore meet Lidl as a seller that stays on as tenant, or as a tenant where buying was not an option.
• In our experience the lease is signed by one of 39 regional companies (2023), many sharing the name Lidl Vertriebs-GmbH & Co. KG — not by the group.
• Lidl's published standard of 2026 — 1,000–1,400 m² of sales area, at least 100 parking spaces — is the benchmark at renewal. A store that falls short may be replaced by a Lidl-built store nearby.

Lidl drives a foundation-owned group that publishes no profits

The covenant is a regional company, not the €140 billion brand

Lidl publishes its standard: 1,000–1,400 m² and 100 parking spaces

In our experience, Lidl leases follow Lidl's template

Relocation, covenant and rent level are the risks to price

Implications for investors

Before you buy a Lidl store:
• Which Lidl company signed — seat, register number — and does a group company stand behind it?
• Why is Lidl not the owner — and if Lidl sold the store, how does the rent compare with the market?
• Does the store meet Lidl's standard of 1,000–1,400 m² and 100 parking spaces, with room to grow?
• Does the development plan allow a larger store, and is a competing site being zoned nearby?
• What do the term, options, indexation, maintenance, subletting and termination clauses say?

Netto Marken-Discount as a Tenant: One Signature Behind 4,433 Stores

Netto Marken-Discount ran 4,433 stores at the end of 2025, by its own account the largest network of any German discounter, and unlike its parent EDEKA it operates every one of them itself. In our experience the lease is signed by that single company, a limited partnership with €17.9 billion of sales in 2025, wholly owned by EDEKA ZENTRALE. The covenant question is therefore simple; the harder one is whether the store will still suit Netto when the lease ends.

Key takeaways
• Netto turned over €17.9 billion in 2025 from 4,433 company-run stores; its sales count towards the EDEKA group's market share of about 30% (Bundeskartellamt, 2025 data).
• In our experience the tenant is one entity, wholly owned by EDEKA ZENTRALE; Netto publishes no accounts of its own, and we found no public credit rating.
• Netto's standard store needs a plot from 4,500 m², about 800–1,200 m² of sales area and at least 60 parking spaces (2026). Its average store has about 830 m² (our calculation, 2025).
• In 2025 Netto opened 104 stores, yet its network grew by only 34: closed stores are being replaced by larger new ones, the main risk for landlords of small stores.

Netto is EDEKA's wholly owned discounter, with no merchant layer

One tenant, one covenant, and no parent unless it guarantees

Netto wants 800–1,200 m², on new or converted sites

Netto leases run long, and modernisation resets the terms

The main risk is a store Netto has outgrown

Implications for investors

Before you buy a Netto store:
• Is the tenant Netto Marken-Discount Stiftung & Co. KG (local court of Amberg, HRA 1747), not Netto ApS & Co. KG?
• Does a guarantee from EDEKA ZENTRALE back the lease?
• Does the store meet today's standard of 800–1,200 m² of sales area, a 4,500 m² plot and 60 parking spaces?
• Can the site and its zoning take an enlargement, and is there a plot nearby where Netto could relocate?
• Which operating costs can the landlord recover, and who pays for roof, structure and car park?
• Has Netto proposed a modernisation, and on what lease terms?

Penny as a Tenant: A Simple Covenant in a Discount Price War

Penny is the simplest REWE Group tenant to underwrite: in our experience PENNY Markt GmbH, wholly owned by the BBB-rated group, signs the leases, and no merchant stands in between. But Penny's German sales, from 2,122 company branches (end-2025), rose only 0.7% in 2025, to €9.9 billion, mainly through inflation. The open question is less the covenant than the renewal: will the store still meet Penny's standard when the lease ends?

Key takeaways
• Penny turned over €9.9 billion in Germany in 2025 from 2,122 stores; the REWE Group, Penny included, holds about 22% of German food retail (Bundeskartellamt, 2025 data).
• In our experience PENNY Markt GmbH signs the lease and runs the store; it is wholly owned by a group S&P rates BBB, stable (August 2026).
• Penny wants 500 to 1,000 m² of sales area, generally from 800 m² plus about 250 m² of ancillary space (2026). It looks for plots from 4,000 m², with at least 50 parking spaces where customers drive.
• Sales growth, not credit, is the open question: 0.7% in Germany in 2025, against 6.3% at PENNY International.

Penny is the REWE Group's discount arm, owned outright by the cooperative

PENNY Markt GmbH signs the lease — and trades in the store itself

Penny wants 800 m² on 4,000 m² plots, or compact city sites

Lease terms follow the REWE Group's practice

Slow growth, not credit, is the risk to price

Implications for investors

Before you buy a Penny store:
• Is PENNY Markt GmbH the tenant, and does a group guarantee stand behind the lease?
• What are the sales and ancillary areas, and may the store grow beyond 800 m² (Part 3)?
• How large is the plot, and how many parking spaces front the entrance?
• What threshold and share does the index clause set, and when does an increase take effect?
• When does the fixed term end, how many options remain, and has the store been converted to the current design?
• Which discounters trade in the catchment, and has any opened or enlarged recently?

REWE as a Tenant: The Group Signs the Lease, the Merchant Runs the Store

Lease liabilities — the present value of contracted rent — are the REWE Group's largest liability: €14.0 billion at the end of 2025, almost all for property, against about €4.3 billion of interest-bearing debt. Yet many REWE stores are run by one of 1,620 independent merchants (2025), often under a sublease from this BBB-rated group. Who signed the lease decides what an investor owns.

Key takeaways
• The REWE Group turned over €100.4 billion in 2025 (Germany: €69.1 billion) and, with Penny, holds about 22% of German food retail (Bundeskartellamt, 2025 data). S&P rates it BBB, stable (August 2026).
• In our experience REWE Markt GmbH signs the lease; the group, which sublets many stores to merchants, booked €1.2 billion of sublease income in 2025.
• REWE seeks 500 to more than 6,000 m² of sales area, usually in towns of 5,000 inhabitants or more, and also buys sites (August 2026).
• Its accounts confirm partial indexation: rent may rise by a percentage of the index change; €13.0 billion of €14.0 billion lease liabilities are index- or rate-linked (end-2025).

REWE is a merchants' cooperative with a corporate credit rating

REWE Markt GmbH usually signs; the merchant sublets from REWE

REWE wants 500–6,000 m² in towns of 5,000 or more

REWE's own accounts confirm partial indexation and extension options

Margins, debt and weaker stores are the figures to watch

Implications for investors

Before you buy a REWE store:
• Who signed — REWE Markt GmbH, REWE Dortmund or a merchant's partnership — and is there a group guarantee?
• Is the store sublet, and may REWE assign or sublet without consent?
• What threshold and share does the index clause set, and must increases be claimed in writing?
• How long is the fixed term, how many options remain, and when was the store modernised?
• Does the sales area fit REWE's formats, and may the store be extended (Part 3)?
• Who maintains fit-out, refrigeration, roof, structure and car park (Part 10)?

Rossmann as a Tenant: A Strong Balance Sheet That Follows the Food Anchor

Rossmann tells landlords it wants to trade beside a full-range supermarket or a food discounter, together covering customers' daily needs — which makes it a natural tenant for food-anchored retail parks. Germany's most widespread drugstore chain — 2,342 German stores and €10.5 billion of German revenue in 2025 — reported €2.5 billion of group equity and no net financial debt at the end of 2025. In our experience its leases are signed by Dirk Rossmann GmbH; the risk to price is the link to the anchor, not the covenant.

Key takeaways
• Rossmann turned over €16.6 billion in 2025 (+8.5%), €10.5 billion in Germany; equity rose to €2.5 billion, with no net financial debt.
• The Rossmann family holds the majority, A.S. Watson (CK Hutchison) 40% since 2004; we found no public credit rating.
• Rossmann seeks about 400–1,000 m² of sales area in towns from about 6,000 inhabitants, next to a supermarket or a discounter; its stores averaged 626 m² in 2025.
• Rossmann's 2 million customers a day in Germany are roughly 850 per store (our calculation). Yet the network keeps moving: 75 new German stores were budgeted for 2025, against a net gain of 31 (our calculation).

Family control and no net financial debt back the covenant

Dirk Rossmann GmbH signs, and the family also buys property

Rossmann wants to stand next to a supermarket or a discounter

Options can be short, and the tenant decides

The risks are anchor dependence and a network in motion

Implications for investors

Before you buy a Rossmann store:
• Confirm that the lease names Dirk Rossmann GmbH, Burgwedel, as tenant, and read the subletting clause.
• Compare the drugstore's fixed term and options with the anchor's, and check whether any clause links them.
• Measure sales area, ancillary space and frontage against Rossmann's criteria.
• Ask whether the store has, or will receive, the new design and a pick-up station.
• Check the indexation threshold, the share passed on and who pays for roof and structure (Part 10).
• Obtain the complete lease file, every option exercise included (Part 7).

Abnahme (acceptance): The Legal Act That Starts the Five-Year Clock

Abnahme is the client's acceptance of completed construction work as essentially conforming to the contract — a legal act, not a ceremony. It starts the five-year limitation period for defect claims on a building, passes the risk to the client and can cost rights that are not reserved on the day.

What it is

Why it matters to investors

What to check

• The date and signatory of the acceptance, and any deemed acceptance under § 640(2) BGB.
• Every known defect, and any contractual penalty, reserved in the protocol.
• The adviser's inspection report, ready before the acceptance date.
• The tenant's handover under the lease aligned with acceptance, so that defects the tenant lists can still be reserved against the developer.
• The expiry of the limitation period, with an inspection about six months before it (Part 7).

AfA (tax depreciation): Why 3% a Year Defers a GmbH's Tax Rather Than Removing It

AfA (Absetzung für Abnutzung) is German tax depreciation: a building's cost, not the land's, is deducted from taxable income in fixed annual instalments — generally 3% a year for a supermarket owned by a GmbH. It is the owner's largest non-cash deduction and, with shareholder-loan interest, the reason a GmbH can report tax losses for years — yet every euro deducted lowers the book value against which a later sale is taxed.

What it is

Why it matters to investors

What to check

• The completion date and building-application date, which decide the rate.
• A purchase-price allocation between land and building, backed by a valuation.
• Works planned for the first three years, against the 15% threshold.
• Who owns installations such as refrigeration plant — relevant for depreciation and for the extended trade-tax reduction (Part 9).
• The tax on a future sale, modelled against the depreciated book value.

Ankermieter (anchor tenant): The Rent Can Survive a Closure; the Footfall Cannot

An Ankermieter is the anchor tenant whose store draws the visitors a retail property depends on — in German food retail, usually a supermarket or discounter of one of the four groups holding more than 90% of the market. Its lease carries most of the income and, in a retail park, the footfall that keeps smaller units let, so its covenant, term and freedom to close largely decide the property's value.

What it is

Why it matters to investors

What to check

• The signing entity, any group guarantee and its financial statements.
• The fixed remaining term, counted without the tenant's extension options.
• An operating obligation, subletting and assignment rights, and any special termination rights.
• Competition and exclusivity clauses, which protect the anchor but can narrow re-letting.
• Whether smaller tenants' leases depend on the anchor, and who could replace it under planning and competition law.

Auflassung (conveyance): Ownership Passes at the Land Registry, Not at the Signing Table

The Auflassung is the agreement between seller and buyer that ownership of the land shall pass, declared before a notary with both sides present; together with the buyer's registration in the land register, it transfers title. For a supermarket buyer, registration is therefore the true moment of acquisition: until then the seller remains owner and landlord, even after the price has been paid.

What it is

Why it matters to investors

What to check

• The Auflassung in the deed, with the notary instructed to file it only after the seller confirms payment.
• Proof of non-cash payment ready for the notary, since the filing waits for it.
• Transfer tax paid promptly, since registration waits for the tax office's clearance certificate.
• Rent, costs and the right to deal with tenants allocated for the period between transfer date and registration.
• After registration, a fresh extract showing the buyer in section I, and the priority notice and the seller's charges deleted.

Auflassungsvormerkung (priority notice): No Registration, No Payment

An Auflassungsvormerkung is a priority notice in the land register that secures the buyer's claim to the property between signing and registration as owner. Because later sales, charges and even the seller's insolvency cannot defeat that claim, German closings are built so that the price falls due only once the notice is registered.

What it is

Why it matters to investors

What to check

• The notary's written confirmation that the notice is registered, with only the encumbrances you accepted ranking ahead of it.
• Deletion approvals for every prior land charge, in the notary's hands before payment.
• A complete deed, with every side agreement recorded, so that the secured claim exists.
• In a forward purchase, a guarantee for the instalments paid.
• An agreed route to delete the notice if the contract is unwound, since deletion normally needs the buyer's approval (§ 19 GBO).

Barzahlungsverbot (cash-payment ban, § 16a GwG): Cash Paid for German Property Does Not Count as Payment

The Barzahlungsverbot bars paying the price for German real estate — or for shares in companies owning it — in cash, crypto-assets, gold, platinum or gemstones, for contracts concluded since 1 April 2023. In a direct purchase it is enforced at the land register: the notary applies for registration only once non-cash payment is proven or proof was requested in vain, so undocumented payment delays the transfer of ownership.

What it is

Why it matters to investors

What to check

• Every part of the price, including payments under side agreements, paid by bank transfer after signing.
• Payment from the buyer's own account or its lender's, not an unrelated third party's.
• Bank confirmations of each payment, ready for the notary at the due date.
• Source-of-funds documentation for the full price, prepared before signing.

Baulast (public-law encumbrance): The Burden the Land Register Does Not Show

A Baulast is an obligation that a landowner assumes towards the building authority to do, tolerate or refrain from something on its plot, recorded in a separate register rather than in the land register. For a supermarket it can decide whether the store's access, parking and setbacks are lawful, and whether the site can grow.

What it is

Why it matters to investors

What to check

• An extract from the Baulast register for the store's plot and every neighbouring plot it relies on (none exists in Bavaria).
• Each Baulast compared with the parking, access and setback requirements of the building permit.
• A matching easement in section II for every right the store depends on.
• Any Baulast that limits an extension or a change to the car park.

Bauträger (developer): The Seller Who Builds — and Whose Balance Sheet Must Last Five More Years

A Bauträger is a developer that builds in its own name on land it will transfer, selling plot and building together, usually before the building is complete. In our experience its quality matters more than the choice between buying forward and buying complete: the law limits the buyer's money at risk, not the risk of delay, failure or poor construction (Part 6).

What it is

Why it matters to investors

What to check

• The developer's licence under § 34c GewO, its financial statements and the stores it has delivered for the same retailer.
• The defect lists at those stores' acceptance, and how quickly the defects were closed.
• Whether the deal is a developer contract with MaBV-compliant payments, or a land purchase plus a separate construction contract.
• A warranty guarantee for the five years after acceptance.
• Independent construction monitoring, with the adviser's report ready before acceptance (Part 6).

Bebauungsplan (development plan): The Bylaw That Decides How Large a Store May Grow

A Bebauungsplan is the legally binding development plan that a German municipality adopts as a bylaw, fixing what may be built on each plot and for what use. For a supermarket it decides whether the store is lawful where it stands and whether it can grow into the format its tenant will want.

What it is

Why it matters to investors

What to check

• The plan in force, with text specifications, statement of reasons and amendments.
• Zone type, sales-area cap and range-of-goods limits against the permit and the lease.
• Pending changes: a resolution to draw up or amend a plan, or a development freeze (§ 14 BauGB).
• The municipality's statement on whether, and until when, seven-year protection runs (§ 42(10) BauGB).
• Room on the plot and in the plan for the tenant's next extension.

Bestandsschutz (grandfathering): Protection for the Store as Approved, Not for the Store the Tenant Wants Next

Bestandsschutz protects a lawfully approved building and its use against later changes in planning law, so an older supermarket may keep trading where a new plan would no longer allow it. It covers the store as approved, not the larger store the tenant will want at renewal — and that gap is where planning risk sits.

What it is

Why it matters to investors

What to check

• The building permit and approved plans against the store as it trades today: sales area, use, range of goods, parking.
• Every extension or conversion since the permit, and whether each was approved.
• Whether the plan allows the extension the tenant will want — and when the seven-year protection of unused rights ends, which the municipality must state on request (§ 42(10) BauGB).
• For a vacant or long-closed store, a planning lawyer's view on whether the approved use is still protected.

Betriebskosten (operating costs): The Lease, Not the Statute, Decides Who Pays

Betriebskosten are the running costs of owning and using a property — property tax, insurance, water, waste disposal, cleaning and the like — which pass to the tenant only if the lease says so. In a supermarket they decide how much of the advertised rent the owner keeps: in our experience, even a new store with a modern lease leaves roughly 8–15% of net rent in costs with the landlord (Part 10).

What it is

Why it matters to investors

What to check

• The list of recoverable cost types, and whether management, insurance and property tax are named.
• The split of maintenance: interior, roof, structure, technical installations, car park.
• Advance payments, the statement procedure and the last three years' statements, including open disputes.
• The property-tax assessment under the 2025 reform, and who bears an increase (Part 10).

Due Diligence (pre-purchase review): What the Buyer Knows at Signing, It Cannot Claim for Later

Due diligence is the buyer's structured review of a property before signing, in four workstreams — legal, financial and tax, technical, and location — and in our experience costs €30,000–50,000 for a single supermarket. German law adds a twist: a buyer loses its statutory rights for a defect it knew of when signing, so what the review finds must be priced or written into the purchase contract before the notary appointment.

What it is

Why it matters to investors

What to check

• A land register extract with the deeds behind section II, plus the public-law encumbrances register (none exists in Bavaria) and the contaminated-sites register.
• The complete lease file, every addendum included, and three years of service-charge statements.
• The building permit, approved plans and acceptance protocol.
• A list of findings, each tied to a price change, a contract clause or a decision not to proceed.
• Source-of-funds documents for the notary, broker and banks.

Erbbaurecht (heritable building right): A Building Without Its Land, on a Clock

An Erbbaurecht is a transferable and inheritable right to own a building on someone else's land, usually for a fixed term — in our experience commonly 50 to 99 years — and against an annual ground rent. For a supermarket investor it can lower the entry price, but its value erodes as the term runs down, and the contract's consent and compensation clauses decide what it is worth.

What it is

Why it matters to investors

What to check

• The remaining term against the lease term, the loan term and your holding period.
• Compensation at expiry and on reversion, and every reversion trigger.
• The landowner's consent to your purchase and to your bank's land charge, in registrable form.
• The ground rent, its indexation formula and its review dates.
• Any renewal priority, or duty of the landowner to sell the land (§ 2 nos. 6, 7 ErbbauRG).

Erweiterte Kürzung (extended reduction): All-or-Nothing Trade-Tax Relief for Pure Property Companies

The erweiterte Kürzung takes a property company's letting income out of the trade-tax base — but only if the company does nothing besides managing and using its own real estate, within narrow statutory allowances. It is all or nothing: one harmful activity, such as co-letting a supermarket's refrigeration plant, can cost the relief for the whole year, and at a 400% multiplier trade tax then takes 14% of trade income.

What it is

Why it matters to investors

What to check

• An inventory of everything let with the building, separating real estate from operating equipment.
• The company's receipts from electricity, charging and tenant services, against the 20% and 5% allowances.
• Whether a shareholder's business uses any part of the property.
• For an exit, the transfer date of any sale, planned with the tax adviser.

Gesellschafterdarlehen (shareholder loan): Interest That Can Leave Germany Untaxed — on Four Conditions

A Gesellschafterdarlehen is a loan from a shareholder to its own company — in our experience, how most international buyers fund a supermarket GmbH (Part 9). Its interest is deductible for the GmbH at an arm's-length rate and, paid to a lender abroad, stays free of German tax only if all four conditions hold; in an insolvency the loan ranks behind other creditors.

What it is

Why it matters to investors

What to check

• A written agreement — amount, arm's-length rate, term, ranking, repayment — signed before any funds move.
• No security on the property for the shareholder, and no link between interest and profit.
• The lender's tax residence, and advice there on how the interest is taxed.
• For a group company lending from abroad, proof that the GmbH could service the loan over its full term (§ 1(3d) AStG).

Gewährleistung (warranty for defects): Five Years of Claims — If You Own Them and Stop the Clock in Time

Gewährleistung is the statutory liability of a builder or seller for defects; for a building, the claims generally become time-barred after five years. Investors lose it in two ways: they buy a store without acquiring the claims, or they let the period run out while exchanging letters.

What it is

Why it matters to investors

What to check

• The acceptance date of each building, and the expiry date that follows from it.
• An assignment of the seller's defect claims in the purchase contract, and the scope of any liability exclusion.
• A technical inspection about six months before expiry (Part 7).
• For open defects, steps that legally suspend or restart the period — not letters alone.
• The warranty guarantee: amount, issuer and term.

Gewerbesteuer (trade tax): Every GmbH Is Subject to It by Its Legal Form — Relief Must Be Earned

Gewerbesteuer is the municipal tax on business income, and a GmbH is subject to it by its legal form — even if it does nothing but let a supermarket. Its rental income is fully relieved only through the extended reduction; without it, trade tax typically takes 10.5–17.5% of trade income on top of corporate tax.

What it is

Why it matters to investors

What to check

• The multiplier of the municipality entitled to levy the tax (§ 4(1) GewStG), and any announced change.
• Whether the extended reduction applies to the specific lease, confirmed by a tax adviser before signing.
• Where it does not apply, the interest add-back on financing costs above €200,000 a year.
• For a GmbH bought as a share deal, its trade-tax assessments and any open tax audit.

GmbH (German limited-liability company): Why €25,000 Is a Floor, Not a Ceiling

A GmbH is a German company with its own legal personality whose creditors can look only to the company's assets — in our experience, the vehicle most international buyers of German supermarkets choose. Its €25,000 minimum capital is a floor for capitalisation, not a cap on what the company can lose, and its managing directors carry personal duties.

What it is

Why it matters to investors

What to check

• Whether the GmbH is registered before it signs the purchase contract — until then, those acting in its name are personally liable (§ 11(2) GmbHG).
• Articles that release the managing director from § 181 BGB, so that he can sign a shareholder loan with himself (Part 9).
• The beneficial owners entered in the Transparency Register (Part 9).
• For an existing GmbH bought as a share deal, its liabilities and tax history: they stay with the company.

Großflächiger Einzelhandel (large-scale retail): The 800 m² Line That Decides Where a Supermarket May Be Built

Großflächiger Einzelhandel is the German planning-law term for stores with more than 800 m² of sales area; those that can have more than minor effects on their surroundings may be built only in core areas or special zones designated for them. For an investor the rule makes well-zoned sites scarce — and decides whether the store it owns can grow.

What it is

Why it matters to investors

What to check

• The zoning of the plot — core area, special zone or other — and any cap on sales area or range of goods.
• The permitted sales area, recalculated as the court defines it, against the store as it trades today.
• Whether the extension the tenant will want at renewal fits the plan or needs a new one.
• The town's status as a central place in the regional plan, which development plans must follow (§ 1(4) BauGB).

Grundbuch (land register): Reliable on Title, Silent on Much Else

The Grundbuch is Germany's official land register: it shows who owns each plot and which rights burden it, and ownership of land passes only when the buyer is entered in it. For a supermarket investor it is the most reliable document in the data room, yet building-authority burdens, contaminated-site records and the lease all sit outside it.

What it is

Why it matters to investors

What to check

• A current extract, re-checked by the notary immediately before signing, including applications not yet completed.
• Section I: the seller is the registered owner, or its authority to sell is documented.
• Section II: the deed behind every entry, read for its effect on access, parking and any extension.
• Section III: every land charge, and its holder's deletion approval against repayment from the price.
• Plot numbers and areas that match the site plan, the building permit and the lease.

Grunderwerbsteuer (real estate transfer tax): Up to 6.5% of the Price, Triggered at Signing

Grunderwerbsteuer is the tax on acquiring German real estate, levied at 3.5% to 6.5% of the price depending on the federal state. In our €10 million supermarket example in Lower Saxony it is the largest acquisition cost, €500,000 of €945,000 — and, as a rule, it arises at signing, not when ownership passes.

What it is

Why it matters to investors

What to check

• The current rate of the state where the property lies, applied to the full consideration.
• The contract's allocation of the tax, and prompt payment, because registration waits for the clearance certificate.
• Conditions precedent and approvals, which shift the date the tax arises.
• In a share deal, every 90% test and the one-month notification deadline (§ 19(3) GrEStG).

Grundschuld (land charge): The Bank's Collateral, and a Trap for Shareholder Loans

A Grundschuld is a land charge registered in section III of the land register that entitles its holder to be paid a fixed sum out of the property, independently of any particular loan. It is the standard collateral for German property loans, and if it secures a shareholder loan from abroad, the interest becomes taxable in Germany, subject to any treaty relief.

What it is

Why it matters to investors

What to check

• Section III: every existing charge, its holder and the deletion approvals the notary holds before payment.
• The financing power of attorney in the purchase contract, limited to funding the price.
• The security agreement's purpose clause, and how the charge is released after repayment.
• Any shareholder loan left unsecured, with no land charge of any rank (Part 9).

Körperschaftsteuer (corporate income tax): A Falling Rate Lowers the Tax — and the Value of Tax Losses

Körperschaftsteuer is the income tax on companies: a German GmbH pays 15% of its taxable income plus a 5.5% solidarity surcharge on the tax — 15.825% in all — and the rate is legislated to fall to 10% by 2032. For a supermarket held in a company it is, with trade tax, the company-level tax on rent; withholding tax on dividends follows only when profit is paid out.

What it is

Why it matters to investors

What to check

• Where the company is managed: a foreign company managed from Germany is taxable here on its worldwide income (§ 1(1) KStG).
• A business plan that uses the legislated rates for 2028–2032.
• Tax losses carried forward, and whether a transfer of more than 50% of the shares to one acquirer within five years would forfeit them (§ 8c KStG; Part 11).
• The withholding tax on distributions, and how your country of residence taxes them.

MaBV (Brokers and Developers Ordinance): Payments Tied to Construction Progress — or to a Guarantee

The MaBV (Makler- und Bauträgerverordnung) governs when a developer selling land with a building still to be completed may take the buyer's money: after four safeguards, in up to seven instalments that follow construction progress — or earlier against a guarantee. For a forward purchase of a supermarket it limits the money at risk — up to 58% of the price once the shell stands — but does not secure completion.

What it is

Why it matters to investors

What to check

• Whether the MaBV applies: land and building from one seller, paid before completion.
• The notary's written confirmation and the other § 3(1) conditions before the first payment.
• A payment plan that follows § 3(2) MaBV, or a § 7(1) guarantee until full completion.
• No waiver under § 7(2) MaBV without an equivalent guarantee.
• The developer's balance sheet and track record, and the tenant's long-stop date (Part 6).

Notarielle Beurkundung (notarial recording): The Deed Is the Deal

Notarielle Beurkundung is the strictest form in German law: a notary records the parties' declarations in a deed, reads it aloud to them and has them approve and sign it. Contracts to buy German land or GmbH shares require it, and an agreement left out of the deed can leave the whole purchase void.

What it is

Why it matters to investors

What to check

• Your own lawyer has approved the final text.
• Every agreement forming part of the deal, from guarantees to side letters, is in the deed.
• The reference deed was executed in advance, and you have read it.
• If your German is not sufficient, the deed is translated to you, in writing on request (§ 16 BeurkG).
• Powers of attorney and company documents meet the land registry's form (§ 29 GBO).

Schriftform (written form, § 550 BGB): A Form Defect Lets Either Party End a 15-Year Lease Early

Schriftform is the form a lease for more than one year must meet under § 550 BGB; otherwise the lease runs for an indefinite period and can be terminated on statutory notice. For commercial leases text form — an exchange of e-mails will do — now suffices, but one essential agreement left out of text form can still undo the fixed term on which a supermarket's price rests.

What it is

Why it matters to investors

What to check

• The complete chain of lease documents: the lease and every addendum, side letter and e-mail amendment.
• Every change to an essential term — rent, term, premises, indexation, cost allocation — recorded at least in text form.
• For a lease concluded before 2025, any termination for a form defect declared by 1 January 2026, while written form still applied.
• The handover date, which sets the earliest possible termination.

Share Deal (share purchase): You Buy the Company, and Its Past

In a share deal the investor buys the shares of the company that owns a property, not the property itself, so the land register does not change. It does not automatically avoid real estate transfer tax — share deals are taxed from a 90% threshold — and the buyer acquires the company with everything it owes and has done.

What it is

Why it matters to investors

What to check

• Every 90% test of § 1(2a) to (3a) GrEStG, including indirect holdings and transfers in the past ten years.
• Notification to the tax office within one month (§ 19(3) GrEStG); without a timely, complete notice, unwinding the deal brings no relief (§ 16(5) GrEStG).
• Corporate and tax due diligence, backed by warranties and tax indemnities.
• The company's tax book values and loss carry-forwards, priced in.
• For a foreign buying company reaching 90%, its beneficial owners in the Transparency Register (§ 20(1) GwG).

Transparenzregister (Transparency Register): Disclose the Owner Before the Notary Will Act

The Transparenzregister is Germany's federal register of beneficial owners — the natural persons who ultimately own or control a company, for example through more than 25% of its capital or voting rights. Every German GmbH must report them, a foreign company must, as a rule, register before buying German real estate, and a notary must refuse to record a purchase until the companies involved disclose who stands behind them.

What it is

Why it matters to investors

What to check

• A current entry for the buying GmbH, updated without delay after any change in ownership or control, and, where required, for the companies above it (Part 9).
• For a foreign company on either side: registration, or proof of filing in another EU register, before the notary appointment (Part 8).
• A text-form chart of the ownership and control structure, ready for the notary.
• In a share deal, the target's entry against its list of shareholders.

Wertsicherungsklausel (indexation clause): Only a Long Lease May Index — and the Wording Decides How Much

A Wertsicherungsklausel ties the rent automatically to a consumer price index — permitted in a commercial lease only where the landlord is bound for at least ten years or the tenant can extend the term to ten. In food retail the retailer's own wording — thresholds, partial pass-through, timing — then decides how much inflation reaches the landlord.

What it is

Why it matters to investors

What to check

• Whether the fixed term, a termination waiver or the tenant's options reach the ten-year minimum.
• The index named, the threshold, the share passed on and whether the clause also works downwards.
• Whether adjustments are automatic or require a written request — and whether a threshold has already been crossed unclaimed.
• Whether the lease provides for earlier invalidity than § 8 PrKG.

Zinsschranke (interest barrier): A €3 Million Cliff, Not an Allowance

The Zinsschranke, or interest barrier, caps the net interest expense a business may deduct at 30% of its tax EBITDA once that expense reaches €3 million a year. A single-store GmbH rarely comes near that mark; a portfolio pooled in one company can cross it — and because the threshold is a cliff, not an allowance, all of the net interest then falls under the limit.

What it is

Why it matters to investors

What to check

• Projected net interest from bank and shareholder loans, for all stores in the same company, against €3 million.
• Evidence that the shareholder-loan rate is at arm's length.
• In a share deal, the target's interest carry-forward and whether the purchase forfeits it.
• The trade-tax add-back where the extended reduction does not apply.

Real Estate Transfer Tax in Germany 2026: From 3.5% to 6.5%, State by State

Germany's real estate transfer tax (Grunderwerbsteuer) ranges from 3.5% of the price in Bavaria to 6.5% in Brandenburg, North Rhine-Westphalia, Saarland and Schleswig-Holstein: on a €10 million property the difference reaches €300,000. The rate that applies is that of the state where the plot lies, on the date of the transaction — as a rule, the day the notarial contract is signed. The rates below apply as at October 2026; the last state to change its rate was Bremen, from 1 July 2025.

The rate differs by up to three percentage points between states

The tax is levied on the price — but not on all of it

Both parties are liable; only tax clearance opens the land register

Implications for investors

What to check:
• Confirm the state in which the plot lies and the date on which the contract will be signed.
• Obtain a justified allocation of the price between land, building and operating equipment.
• Agree in the contract who pays the tax — and how the seller is protected if the buyer does not.
• Hold liquidity for the tax: it falls due one month after the assessment notice.
• In a share deal, test the structure against § 1 GrEStG as in force from 3 July 2026.

German Food Retail in Figures: 2026

German food retail is growing largely through prices: turnover rose by 3.8% in 2025, to €217.8 billion excluding VAT (EHI Retail Institute), while real food sales grew by only 1.1% (Destatis). Online food sales came to about €4.1 billion, and four groups — EDEKA, Schwarz, REWE and ALDI — control more than 90% of the market (Bundeskartellamt). The sources use different methods, so each figure should be read together with its source.

The market grows largely through prices; online remains a niche

Supermarkets are growing more than twice as fast as discounters

Four groups control more than 90% of sales

Implications for investors

What to check:
• Separate net from gross: EHI reports turnover excluding VAT and bevh including VAT, so online shares are only roughly comparable.
• Do not confuse real and nominal growth: Destatis publishes growth rates, not amounts in euros.
• Check that a figure covers Germany alone: the revenue of the REWE and Schwarz groups includes foreign and non-food business.
• Find out who signed the lease — a group company or an independent merchant under its brand.

Notary and Land Registry Costs in Germany: A Table

The notary and the land register (Grundbuch) cost the buyer of a commercial property roughly 0.4–0.9% of the price, including 19% VAT on the notary's services and without bank financing. That is about €8,800 at a price of €1 million and about €57,700 at €10 million; the fees are set by statute (GNotKG) and are not negotiable (§ 125 GNotKG). Their share of the price falls as the price rises, and as a general rule the buyer bears them (§ 448(2) BGB).

The dearer the property, the smaller the share of fees

Three fees go to the notary, two to the land registry

Bank financing adds two more fees

Implications for investors

What to check:
• Check the value on which the fee is calculated: the purchase price, but not less than market value.
• Find out which steps the notary is instructed to carry out — each adds its own fee.
• Ask the bank for the amount of the land charge: two additional fees are calculated on it.
• Check who bears the costs under the contract if the parties depart from § 448(2) BGB.
• Have a tax adviser confirm that a GmbH charging VAT on its rent may deduct input VAT.

Price and Yield: A Table of Multiples

A price multiple (Kaufpreisfaktor) of 20 means a 5.0% gross initial yield but only a 3.9–4.2% net initial yield (Nettoanfangsrendite), the measure on which institutional investors compare properties. The multiple is the purchase price divided by the annual net rent; the net yield also takes non-recoverable costs and acquisition costs into account and is therefore 16–22% lower. On our assumptions, to earn 5.0% net you must buy at no more than 15.5–16.8 times the annual rent.

Non-recoverable and acquisition costs take 16–22% off the gross yield

The target yield sets a ceiling on the multiple

A broker's yield and an investor's yield are different numbers

Implications for investors

What to check:
• Ask which rent the multiple is based on — the current net rent under the lease or the rent expected after indexation.
• Check whether the calculation includes real estate transfer tax, the notary, the land register and broker commission.
• Ask the seller for the non-recoverable costs assumed, and check them against the lease.
• Take the market benchmark with its source and date — one broker, one quarter.

Retail Property Investment in Germany: 2025–2026

In the first nine months of 2026, investment in German retail property fell by 25%, to €3.1 billion (BNP Paribas Real Estate), and the share of foreign buyers dropped from 50% to 31%. There were more deals, but they were smaller: the average volume, €16.6 million, is a record low. Food stores and large-format specialist stores remain the main segment: in 2025, when the market grew by 2.6% to €6.5 billion, they took almost half of the investment.

Volume fell by a quarter in the first nine months of 2026

Food and large-format stores remain the main segment

The largest deals are food-store portfolios

Implications for investors

What to check:
• Distinguish all retail from food: the €6.5 billion covers every type of retail property, while food properties in the narrow sense accounted for about €2.1 billion in 2025.
• Stick to one source: CBRE and Cushman & Wakefield use different methods, so do not mix brokers in one series.
• Compare like periods: nine months with nine months, not with a full year.
• Draw no conclusions from the foreign share: it swings sharply — from 18.6% to 51.0% within a year in the food segment — and says nothing about the price of a particular store.

Supermarket Leases in Germany: Term, Indexation, Cost Allocation

New and enlarged food stores in Germany are generally let for 15 years; the rent is linked to the consumer price index but usually rises only after a threshold and often by less than full inflation. Costs are shared on a "double net" basis: the roof and structure remain with the landlord, and in our experience a new store's owner bears non-recoverable costs of 8–15% of the net rent. There is no single market standard: the economics of a property are set by the wording of the particular lease.

The term is 15 years, and the extension options belong to the tenant

Indexation requires ten years and usually starts after a threshold

The tenant bears most costs; the landlord keeps the roof and structure

Implications for investors

What to check:
• Find out who signed the lease — a group company or an independent merchant — and whether there is a group guarantee.
• Calculate the remaining fixed term without the tenant's options.
• Check the index, the threshold and the share passed on, and whether a threshold already crossed has been missed.
• Check the list of recoverable costs and the allocation of repairs: roof, structure, building services, car park.
• Request the full chain of amendments and make sure each one is at least in text form.

Trade Tax Rates in Germany's Major Cities: From 410% to 537%

In 2026 the trade tax multiplier (Gewerbesteuer-Hebesatz) in Germany's 20 largest cities ranges from 410% in Berlin to 537% in Bonn (DIHK survey as at 31 December 2025 and 1 July 2026). On every €100,000 of trade income, that means €14,350 to €18,795 of tax. For a GmbH that lets a supermarket, the multiplier matters only if the extended reduction of the trade-tax base (erweiterte Kürzung) does not apply.

The tax is income times 3.5% times the municipal multiplier

Two of the twenty cities changed their multiplier in 2026

The extended reduction takes rental income out of the base — on strict conditions

Implications for investors

What to check:
• Find out which municipality is entitled to levy the tax, and what multiplier it has set for the coming years.
• Obtain a tax adviser's opinion on the extended reduction for the specific lease before the purchase contract is signed.
• Request an inventory of the assets let together with the building, with a separate list of operating equipment.
• Check that income from electricity, charging and services to tenants stays within the 20% and 5% limits.

Can you buy property in Germany without a residence permit?

Yes. You need no residence permit to buy: the law ties ownership neither to nationality nor to residence, and a non-resident signs the same contract before the notary as someone living in Germany. Status affects other things — taxes, banking and, for Russian citizens, the €100,000 deposit limit under EU sanctions — and the purchase itself confers no right to a residence permit.

The notary checks identity and money, not residence permits

Without a residence permit, taxes and banking change

Buying property confers no right to a residence permit

Implications for investors

What to check:
• your passport and proof of authority; if you will not attend, a power of attorney in the form required by § 29 GBO;
• registration with the tax office where the property is located, and the annual return;
• for Russian citizens without a residence permit in the EU, EEA or Switzerland, the €100,000 deposit limit at any one bank;
• how your country of residence taxes income from Germany and whether it credits the German tax;
• if you plan to move, the tax consequences — before the move, not after.

What do you risk buying property in Germany without your own lawyer?

The risk is a contract that protects the seller: the notary is impartial and negotiates for neither side, and the broker earns a commission only if the deal goes through. Without their own lawyer, buyers risk accepting the seller's exclusion of liability for defects, voiding the whole contract by leaving an important agreement outside the notarial deed, or buying a lease the tenant may end early. In our experience, legal due diligence, negotiation and closing together cost €12,000–25,000 — no more than 0.25% of the price of a €10 million store.

The notary records the deal but does not represent you

The costliest mistakes come to light after signing

A lawyer costs a fraction of one per cent of the price

Implications for investors

What to check:
• Retain a lawyer before the letter of intent, and give them the draft contract well ahead of the notary appointment.
• Include every agreement — guarantees, side letters, arrangements on fixtures — in the notarial deed.
• Reflect each due-diligence finding in the price, a guarantee or a contract term.
• Make sure the purchase agreement assigns to you the claims against the developer and contractors.
• Check that the precautionary VAT option is declared in the deed itself.

Can a Russian citizen buy property in Germany?

Yes, unless the buyer is on the EU sanctions list: Regulation (EU) No 833/2014 contains no general ban on Russian citizens buying property in Germany. But the transaction passes three filters: a deposit limit of €100,000 per bank for Russian citizens and residents without a residence permit in the EU, the EEA or Switzerland; enhanced checks on the source of funds for residents of Russia; and German tax rules for "non-cooperative" jurisdictions.

The outright ban applies to listed persons, not to a passport

The deposit limit turns on citizenship and residence permits, not deal size

Source of funds faces enhanced checks, and the tax treaty offers no shelter

Implications for investors

What to check:
• screening against the EU consolidated sanctions list — for the buyer, the seller, the lending bank and all beneficial owners;
• a document proving the Article 5b(3) exception: a passport of an EU or EEA state or of Switzerland, or a residence permit there;
• a complete file on the source of funds and wealth — before the letter of intent;
• the lender's tax residence, if the GmbH is funded by a shareholder loan;
• the current consolidated version of both regulations on the signing date.

What is a share deal, and can it save real estate transfer tax?

A share deal is the purchase not of the property itself but of shares in the company that owns it, so the owner recorded in the land register (Grundbuch) does not change. Real estate transfer tax (Grunderwerbsteuer) still arises if even one of the four 90% tests in § 1 GrEStG is met; since 3 July 2026, for a buyer of 90% or more, it arises already at signing. Savings are possible only within narrow limits, and they are paid for with other risks.

The tax arises if any one of four 90% tests is met

The 2026 reform moved the tax point to signing

Saving the tax means leaving over 10% with the seller for years

Implications for investors

What to check:
• Check all four 90% tests, including indirect holdings, related persons and share transfers over the past ten years.
• Determine the date the tax arises: signing, fulfilment of a condition or transfer of the shares.
• Notify the tax office within one month.
• Examine the company itself — taxes, contracts, disputes — and secure the seller's warranties in the agreement.
• Request the property's tax book value and details of the company's tax losses: both affect the price.

Can foreigners buy property in Germany?

Yes: German civil law places no restriction on buying real estate by nationality or residence, and in 2025 foreign buyers accounted for 44% of investment in German commercial real estate. A foreigner acquires property exactly as a German citizen does — by notarial contract and registration in the land register (Grundbuch). The limits come not from the passport but from EU sanctions, anti-money-laundering rules and, for agricultural land, a separate permit.

German law does not distinguish domestic from foreign buyers

The limits concern money, sanctions and special categories of land

The procedure is the same for foreigners, but the paperwork is heavier

Implications for investors

What to check:
• whether you, your company, the seller or their beneficial owners appear on the EU sanctions list — the broker, the notary and the bank will check;
• documents on the source of funds — before the letter of intent, not on the eve of the notary appointment;
• an entry in the Transparency Register if a foreign company is buying;
• a power of attorney in the form required by § 29 GBO, with an apostille or legalisation, if you will not attend in person;
• when buying shares in a German company, screening under §§ 55, 56 AWV and the real estate transfer tax rules for share deals.

Can a non-resident get a German bank loan for commercial property?

Yes — though usually not as an individual but through the German limited-liability company (GmbH) that buys the property: German banks lend to such companies routinely, even when all shareholders and directors live abroad. What decides is transparency about the owners and the source of funds, the charge over the property and the equity. According to the Bundesbank, new secured loans to companies above €1 million cost 3.3–4.2% on average in August 2026, depending on the fixed-rate period.

The bank lends to the German company but vets its foreign owners

Collateral and equity set the size of the loan

Average rates sit below prime supermarket yields, but the margin is thin

Implications for investors

What to check:
• the ownership chart down to the beneficial owners, and the entry in the Transparency Register (Transparenzregister) — before the first conversation with the bank;
• documents on the source of funds and wealth and, for companies, register extracts with an apostille or legalisation;
• information on the shareholder's financial position if the shareholder is to act as guarantor;
• the gap between the bank's valuation and the purchase price plus costs — and which funds will cover it;
• the shareholder loan — with no charge in its favour, and subordinated if the bank requires it.

Can you finance a supermarket purchase in Germany, and at what interest rate?

Yes: German banks routinely lend to property-owning GmbHs — including companies whose shareholders and directors all live abroad — against a charge on the property, the land charge (Grundschuld). The bank sets the rate deal by deal: it combines the cost of money for the fixed-rate period with a margin that depends on the loan's share of the property's value (LTV), the tenant and the remaining lease term. What matters is not the rate itself but how it compares with the property's yield: in our series' example the property earns 3.9% on the total outlay, and a loan that costs more lowers the return on your equity.

The standard borrower is a GmbH; the standard security, a land charge

LTV depends on which value the bank uses

Debt lifts returns only if it costs less than the yield

Interest rates have risen faster than supermarket yields

Implications for investors

What to check:
• which value the bank bases the LTV on — the price, the market value or the lending value;
• the loan term and the fixed-rate period against the remaining lease term;
• a shareholder guarantee, subordination of the shareholder loan and the scope for a non-recourse loan;
• the assignment of rents and an account with the lending bank;
• early-repayment terms: on a sale, a fixed-rate loan can be terminated, but with compensation to the bank (§ 490(2) BGB).

Can you pay cash for property in Germany?

No: since 1 April 2023, the price of German real estate — and of shares in the companies that own it — may not be paid in cash, crypto-assets, gold, platinum or gemstones (§ 16a GwG). Such a payment does not discharge the debt. Payment is by bank transfer, and the notary files for the buyer's registration as owner only once non-cash payment is proven or after requesting the proof without success.

The ban applies at any amount, and cash does not count as payment

The buyer becomes owner only after payment is proven

The notary reports unusual payments even when the ban is respected

Implications for investors

What to check:
• the whole price, including payments under side agreements, is paid by bank transfer after the contract is signed;
• the money comes from the account of the buyer or the buyer's lending bank, not from a third party;
• bank confirmations for every payment will be ready by the due date;
• the source of funds is documented before signing, and crypto-assets, gold, platinum and gemstones have been converted into money in a bank account in advance;
• if a party or beneficial owner resides in a country on a high-risk list, the closing timetable allows time for the FIU report.

Can you sell property in Germany without paying tax?

For a private owner, yes: if purchase and sale are more than ten years apart, the gain on German property is not taxed in Germany, for residents and non-residents alike (§ 23(1) sentence 1 no. 1 EStG). A GmbH has no such period: its gain on a sale is always taxed at company level, and an exit through a share sale is taxed under its own rules. Exemption in Germany is not exemption in the seller's country of residence.

For private owners, the ten years run from contract to contract

Frequent sales turn an owner into a property dealer

GmbH and share sales are taxed whatever the holding period

The country of residence may take what Germany forgoes

Implications for investors

What to check:
• the dates of the notarised purchase and sale contracts, and whether more than ten years lie between them;
• how many properties you have sold, or plan to sell, within five years;
• who owns the property — you personally or a GmbH — and what share of the capital you hold;
• the depreciation claimed during ownership: on a sale within the period, it raises the taxable gain;
• how your country of residence taxes the gain, and which method of relieving double taxation its treaty with Germany provides.

How much does it cost to buy commercial property in Germany?

On top of the price, a buyer of commercial property in Germany usually pays between 4.5% and 11% of it; in our example of a €10 million supermarket in Lower Saxony, 9.45%. The heaviest items are real estate transfer tax (Grunderwerbsteuer) — from 3.5% in Bavaria to 6.5% in four federal states — and the broker's commission, if the buyer pays it. The notary and the land registry cost a fraction of one per cent under a statutory fee schedule.

Transfer tax depends on the federal state and arises at signing

Notary and land registry cost a fraction of 1%, set by statute

The broker and due diligence are the items that can be negotiated

Implications for investors

What to check:
• the tax rate in the state where the property lies, and the full base — the price plus the obligations the buyer assumes;
• who pays the broker: the contract decides, not the law;
• a separate line in the contract for operating equipment, if it is sold with the building;
• the VAT option on the rent: it decides whether the GmbH recovers the notary's and broker's VAT;
• the fees for the land charge, if the purchase is financed with a loan.

How much does commercial property management cost in Germany?

In our experience, commercial property management of a supermarket costs 2–4% of net rent plus 19% VAT; German valuation standards allow 3% of gross rent for management. On top of that, the owner bears the costs of the GmbH itself — about €8,000–12,000 a year for bookkeeping and tax reporting — and the upkeep of roof and structure (Dach und Fach). Together, in our experience, the non-recoverable costs of a new store with a modern lease come to 8–15% of net rent.

Management is several cost lines, not one rate

Valuation standards set 3% for management and 4% for rent-loss risk

Management costs pass to the tenant only if the lease names them

A manager needs no licence, so the owner must check quality

Implications for investors

What to check:
• what the manager's fee includes and what is billed separately: technical oversight, lease negotiations, disputes;
• the base of the rate — net or gross rent — and the minimum fee a year;
• whether the tenant reimburses management costs under the lease;
• the scope and frequency of reporting, and the monitoring of indexation and warranty periods;
• the length of the management contract and how it can be terminated.

How much does it cost to set up and run a GmbH?

Forming a German limited-liability company (GmbH) — notary and commercial register — costs about €900 by our calculation. The €25,000 of share capital, of which at least €12,500 is paid in before registration, is the company's money, not a cost. Running the company costs more: bookkeeping, financial statements, tax returns and contributions recur every year.

Share capital is not a cost but a condition of registration

Formation costs about €900, but not everyone can form by video

Running costs exceed formation costs because they recur every year

Implications for investors

What to check:
• shareholders, capital, managing directors and the release from the restrictions of § 181 BGB — in the articles;
• the company's German address and the bank that will open the account for paying in the capital;
• a power of attorney under § 2(2) GmbHG, if a founder cannot travel;
• the tax adviser's annual fee — in writing and in advance;
• a calendar of obligations: tax returns, publication of financial statements within 12 months, data in the Transparency Register.

Do you need a German bank account to buy and own property?

To buy, no: the law requires no German bank account, and the price can come from abroad if paid by transfer and proven to the notary (§ 16a GwG). To own, you need an account, though not necessarily a German one: it receives the rent and pays the taxes, and in our experience a lending bank keeps the company's account in-house. An investor living outside the EU has no right to an account, and a bank may not accept deposits above €100,000 from Russian citizens and residents without EU, EEA or Swiss citizenship or a residence permit.

The price may come from abroad, by transfer from your own account

An owner needs a company account, and the bank may refuse it

For Russian citizens and residents, the EU restricts banking, not buying

Implications for investors

What to check:
• the price comes from your own account or the buying company's, and statements for every payment are ready by the due date;
• the source-of-funds documents for the full price are gathered before signing;
• the GmbH is entered in the Transparency Register before the account is opened;
• with a loan: where the bank requires the account and how the rent assignment is documented;
• for Russian citizens and residents: whether Art. 5b of Regulation No 833/2014 applies to you, or the exemption in its paragraph 3.

Do you need a GmbH to buy commercial property in Germany?

No: the law does not require a company, and commercial property in Germany can be bought by an individual or by a foreign company. A German limited-liability company (GmbH) is a choice, not an obligation, but in our experience most foreign buyers of single properties worth €3–20 million prefer it. For limited liability, access to bank loans and simpler inheritance, they give up an untaxed sale after ten years of ownership.

The law allows three routes, and each has its price

A GmbH limits the risk but does not remove it

Those who value an untaxed sale and simplicity can skip a GmbH

Implications for investors

What to check:
• the structure — before the letter of intent, with a tax calculation for Germany and your country of residence;
• the GmbH's registration in the commercial register before the purchase agreement is signed;
• a release of the managing director from the restrictions of § 181 BGB in the articles, if the director personally signs the shareholder loan;
• the entry of the beneficial owners in the Transparency Register (Transparenzregister);
• the lease — for compatibility with the extended reduction of trade tax.

Does buying property in Germany give you a residence permit?

No: Germany's Residence Act (Aufenthaltsgesetz) provides no residence permit for buying property or for passive investment — whatever the amount. Nor does ownership extend a stay: without a residence permit, a short visit is limited to 90 days in any 180-day period. A permit is granted only for a purpose the Act names, such as employment, self-employment, study or family reunification; income from a property can merely help to show that you have enough to live on.

The law ties residence to a purpose, not to assets

The real grounds are work, business, study and family

Self-employment is the closest route, but not for a passive owner

Implications for investors

What to check:
• Establish whether your nationality requires a visa for travel, and whether EU freedom of movement applies to you.
• Define the purpose of stay you can genuinely substantiate: work, business, study, family.
• For self-employment, prepare a business plan and proof of financing and experience — and, if you are over 45, of retirement provision.
• Gather proof of means of subsistence and health insurance, including from rental income.
• Consult an immigration lawyer before buying, if relocating is part of your plan.

Does online retail threaten supermarkets in Germany?

Not yet: in 2025 Germans bought €4.12 billion of food online (bevh), about 1.9% of food retail turnover of €217.8 billion (EHI). Including drugstore goods, the online share is 4.9% (HDE), and online sales are growing faster than store sales, so the share is worth watching. But in our view, a supermarket's income today is decided by the lease, the format and the location, not by the internet.

Online holds about 2% of the food market and outgrows it

Quick delivery did not pay because grocery margins are thin

For the owner, the lease, format and location matter more

Implications for investors

What to check:
• the remaining fixed lease term and the legal entity that signed the lease;
• whether the lease provides for turnover rent, and whether online orders picked or collected in the store count towards turnover;
• the store's size, parking and competitors against the chains' requirements for new sites;
• the latest bevh and HDE data on the online share and its growth, adjusted for differences in method.

How do you carry out due diligence on commercial property before buying?

A commercial property is examined in four workstreams — legal, financial and tax, technical, and location — to answer a single question: does it justify the yield and the risk built into the price? In our experience, full due diligence on one supermarket costs €30,000–50,000, or 0.3–0.5% of a €10 million price. It is best begun with the lease and an extract from the land register (Grundbuch) — before the letter of intent.

The documents that can stop the deal come first

The lease is examined as if it were the asset itself

The land register shows neither contamination nor public charges

Tax and technical reviews determine the cost of ownership

Implications for investors

What to check:
• Request the land register extract with the documents behind the entries in section II, and confirm that the building does not stand on a heritable building right.
• Examine the complete lease with all amendments in text form, the rent roll and three years of service-charge statements.
• Obtain extracts from the registers of public-law encumbrances and contaminated sites, and the municipal certificate on charges.
• Compare the acceptance record and the list of defects with the date on which claims for them become time-barred, and check the energy performance certificate.
• Commission a tax opinion on VAT and the ownership structure.

Should a commercial property loan carry a fixed or a floating rate?

A German floating-rate loan, usually tied to EURIBOR, can be ended at any time on three months' notice; a fixed-rate loan, without compensating the bank, only when the fixed rate expires or after ten years (§ 489 BGB). If the property is sold, a fixed-rate loan is repaid early, but the bank's loss must be made good (§ 490 BGB). In August 2026 new secured loans to companies above €1 million cost an average of 3.87% at a floating rate and 3.29% with the rate fixed for more than 10 years (Deutsche Bundesbank).

A fixed rate buys certainty, but leaving it costs money

A floating rate tracks EURIBOR and can be exited without compensation

Loans grew dearer over the year at every fixed-rate period

Match the fixed-rate period to the lease and the exit plan

Implications for investors

What to check:
• the fixed-rate period against the remaining fixed lease term and the planned holding period;
• for a floating rate: the base rate, the margin, any rate floor and the hedging requirements;
• how compensation for early repayment is calculated, and the right to make partial repayments;
• covenants and the grounds on which the bank may demand early repayment;
• the rate against the property's net initial yield: a loan that costs more lowers the return on equity.

What are commercial property yields in Germany in 2026?

According to BNP Paribas Real Estate, prime net initial yields on German commercial property in the third quarter of 2026 ranged from 3.94% for high-street retail buildings in the largest cities to 6.40% for DIY stores. Offices yielded 4.56%, logistics 4.70%, and supermarkets and discounters 5.00%. Since the end of 2025, yields have risen in every segment, by 0.1–0.6 percentage points.

Costlier financing has pushed yields up in every segment

The prime benchmark is a floor, not an average

For an investor, the spread over bonds matters more than the level

Fewer deals are being done, above all in retail property

Implications for investors

What to check:
• Clarify which yield is meant: prime, the average of actual deals or the one advertised by the seller.
• Compare figures from one broker at one date.
• Calculate the spread over government bond yields on the date of the deal.
• Work out what yield remains after non-recoverable costs and acquisition costs.

How does a double tax treaty with Germany work?

A treaty does not exempt income from tax: it only limits a German tax that has already arisen under German law, dividing the right to tax between two countries. Germany may tax rent from German property and gains on its sale, the country of residence relieves the double taxation by exemption or credit, and only residents of a treaty country are protected. The treaty with Belarus is suspended, Germany is suspending the one with Russia from 1 January 2027, and there has been no treaty with the UAE since 2022.

A treaty limits German law; it does not replace it

Exemption or credit: the method decides where the tax is paid

Relief at source does not apply by itself

With Russia, Belarus and the UAE, there is no working treaty

Implications for investors

What to check:
• whether a treaty with your country of tax residence is in force and has not been suspended;
• which treaty article your income falls under: real estate, dividends, interest or the sale of shares;
• the method your country uses to relieve double taxation — exemption or credit;
• the certificate of tax residence and the deadline for a refund application to the BZSt;
• for a foreign company, the treaty anti-abuse test (§ 50d(3) EStG).

How does rent indexation work in Germany?

Commercial rent is tied to the consumer price index of the Federal Statistical Office (Destatis) by an indexation clause (Wertsicherungsklausel). An automatic link is permitted only if the landlord is bound for at least 10 years or the tenant may extend the lease to 10 years (§ 3 of the Price Clause Act, PrKG). The wording decides how much inflation reaches the landlord: in food retail, rent usually changes only after a threshold and reflects only part of the index rise.

The law allows automatic indexation only in long-term leases

Threshold, pass-through and timing decide what the landlord receives

Indexation must be tracked, or it will not take effect

Implications for investors

What to check:
• whether the landlord's commitment reaches 10 years — through the fixed term, a waiver of termination or the tenant's options;
• which index and base year the clause names, and whether the threshold is set in per cent or in points;
• what share of the index rise is passed on, and whether the clause works both ways;
• whether the adjustment is automatic or requires a written demand — and whether a threshold has already been missed: compare the dates of the last increases with the Destatis index;
• whether the lease provides for earlier invalidity than § 8 PrKG.

What is a forward deal, and how is the buyer's money protected?

A forward deal is the purchase of a supermarket still under construction: the contract is signed in advance, and the price is paid either in full after completion or in instalments during construction. The first option protects the money best: payment only after completion, handover of the store and registration of the buyer's priority notice (Auflassungsvormerkung) in the land register. If the developer is paid earlier, the Brokers and Developers Ordinance (MaBV) requires either four conditions to be met, with at most seven instalments, or a bank or insurer guarantee for all repayment claims (§§ 3, 7 MaBV).

The strongest protection is not to pay until the store is ready

The law allows earlier payment only once four conditions are met

The priority notice protects the plot, not the money paid

Implications for investors

What to check:
• the payment conditions in the contract: completion and acceptance, handover to the tenant, rent commencement, the priority notice, the release from charges;
• for instalments, the § 3 MaBV schedule and the notary's written confirmation;
• the wording of the § 7 MaBV guarantee: the guarantor, the amount and validity until full completion;
• whether the documents include a separate deed waiving the MaBV protection;
• the long-stop date in the lease, and the buyer's right to withdraw if the tenant withdraws from the lease.

How long does it take to buy commercial property in Germany?

Signing at the notary takes one day, but the longest and least predictable stage comes before it: due diligence, financing and, if needed, setting up a GmbH. After signing, the law and the banks set the timetable: the municipality has up to three months to decide on its pre-emption right, and the price is usually paid within 10–14 days of the notary's letter. The buyer receives the rent from the transfer date, usually on payment of the price, but becomes the owner only on registration.

Before signing, speed decides whether you get the property

After signing, the law and the banks set the pace

Registration can come later — and income sooner

Implications for investors

What to check:
• the buying GmbH is registered, and the Transparency Register entry made before the visit to the notary;
• the reference deed has been recorded in advance, and you have read it;
• the municipality's certificate on the pre-emption right is requested immediately after signing;
• bank confirmations of every payment are ready by the due date;
• the transfer tax is paid within one month of the notice.

How long is a supermarket lease in Germany?

Most often 15 years fixed: that is how BNP Paribas Real Estate describes the leases signed when food stores are expanded, and it matches our experience of new construction. On sites a retailer regards as strategic, 20 years also occur. The renewal options a tenant usually holds on top are a right, not an obligation, so a property's value rests above all on the fixed term that remains.

Fifteen years suits the bank, the landlord and the retailer

Options extend the lease only if the tenant wants them to

The term is protected only if the lease is in text form

Implications for investors

What to check:
• the remaining fixed term at the date of purchase — separately from the options;
• who holds the options and by when they must be exercised;
• who signed the lease and whether it contains special rights of early termination;
• whether the lease and all amendments are in text form;
• whether the term meets the PrKG condition for the indexation clause.

How much does a supermarket cost in Germany in 2026?

A German supermarket is priced off its rent: annual net rent times a multiple, which ranges, according to BNP Paribas Real Estate, from 12.5 for value-add assets to 18.5 for the best supermarkets and discounters. On our calculation, a store of average size at average rent costs €2.3–3.4 million as a discounter, €3.1–4.6 million as a supermarket and €7.3–10.8 million as a large supermarket. On top of the price, the buyer pays a further 4.5–11% for real estate transfer tax, the notary, the land register and, if so agreed, the broker.

Rent and asset class set the price, not the building's cost

Divide the rent by 5% and you overpay by about 8%

Implications for investors

What to check:
• the net rent in force and the rental area under the lease, with the rent converted into euros per m² a month;
• the multiple the seller asks, against BNP's benchmark for the asset class: 18.5, 15.5 or 12.5;
• which yield the seller quotes — gross or net — and on what rent it is calculated;
• the rent per m² against the average for the format and the type of location;
• the transfer tax rate in the property's federal state, and who pays the broker.

How did supermarkets in Germany come through the pandemic and the energy crisis?

Better than most retail property: food stores stayed open during the pandemic and their sales volume rose by 5.6% in 2020, while in 2022–2023 turnover grew on prices even as volumes fell. The main blow fell not on rent but on value: prime retail-park yields rose from 3.50% at the end of 2021 to 4.75% in September 2026 (BNP Paribas Real Estate). At unchanged rent, that means a loss of about a quarter of the price.

Food stores traded through the pandemic, and capital followed them

The energy crisis hit retailers' margins above all

The blow fell on the price: rates lifted yields and cut values

Implications for investors

What to check:
• the indexation clause: the threshold, the share passed on and the date of the last rent increase;
• the allocation of operating costs and the building's energy certificate;
• the 2022–2023 financial statements of the company that signed the lease;
• the price's sensitivity to yield: a rise from 5.0% to 5.5% at the same rent lowers the value by about 9%.

How do you choose a town to buy a supermarket in Germany?

Choose the store's position in its catchment, not the town: a dominant supermarket in a small "central place" is often more resilient than a store in a metropolis, where prime yields stand at 5.00% — only about 1.5 percentage points above government bonds. Purchasing power matters less than it seems; planning status, competition and population trends matter more. The cost of entry also depends on the location: real estate transfer tax (Grunderwerbsteuer) ranges from 3.5% in Bavaria to 6.5% in four federal states.

The metropolis sells liquidity; the small town sells income

Central-place status matters more than purchasing power

A small town pays off only under three conditions

Implications for investors

What to check:
• the town's status in the state or regional development plan and its tier in the central-place system;
• the population forecast for the town and its catchment;
• competitors within a ten-minute drive and new stores already approved;
• the site's zoning and room to expand: the gap between the average store and retailers' requirements for new sites is about 450 m² for a supermarket and 250 m² for a discounter;
• the transfer tax rate in the state where the property lies.

How do you pass German commercial property to your children by gift or inheritance?

Germany taxes gifts and inheritances with one tax on one scale: a child pays 7–30% above an allowance of €400,000, and gifts from one person are added together over ten years (§§ 14, 16, 19 ErbStG). German property is taxed even if neither the parents nor the children live in Germany, while a transfer to children triggers no real estate transfer tax. The relief for let property covers only housing, so a supermarket is taxed at its full value as determined under the Valuation Act (BewG).

Gifts and inheritances are taxed alike, with one allowance per decade

The Valuation Act, not the purchase price, sets the tax value

Non-residents pay tax only on German assets

No transfer tax applies, and the holding period passes to the child

Implications for investors

What to check:
• the residence of the donor and of each child at the date of the gift: it decides whether all assets or only German ones are taxed;
• the property's tax value under the BewG and the local valuation committee's capitalisation rate;
• the stakes of all family members in the German GmbH: the 10% threshold counts the stakes of related persons together;
• gift and inheritance tax in the country of residence, with a local adviser.

How do you sell commercial property in Germany, and what does it cost?

A sale goes through the same steps as a purchase — data room, the buyer's due diligence, notarial contract, payment after the notary's confirmation — but the seller has costs of its own. As a statutory default the buyer pays the notary and land-register costs (§ 448(2) BGB); the seller pays the broker's commission if so agreed and the bank's compensation for repaying a fixed-rate loan early. Tax on the gain falls on a selling GmbH, and on an individual who has owned the property for no more than ten years.

The price is set by whoever buys, not by whoever sells

A complete data room protects both the price and the seller

Financing, tax and the transfer date decide what the seller keeps

Implications for investors

What to check:
• Assemble a complete lease file — with all amendments in text form — the permits, the acceptance record and three years of service-charge statements.
• Ask the bank for the loan's early-repayment terms and the date from which it can be terminated without compensation.
• Calculate the tax on the gain with your tax adviser: the residual tax book value, past losses and the transfer date.
• Check pre-emption rights in section II of the land register and in the lease.
• Prepare the letter to tenants on the change of owner together with the buyer.

How do you transfer money to buy property in Germany?

By bank transfer from your own account or the buying company's, and only after the notary's written notice that payment is due — usually within 10–14 days of it. No German bank account is needed, but the bank, notary and broker check the origin of the full amount before the transfer — and, for clients from high-risk countries, the source of their entire wealth. Cash, crypto-assets, gold, platinum and gemstones are prohibited (§ 16a GwG), and a payment that cannot be proved to the notary delays the buyer's registration as owner.

Only the notary's notice releases the price, in several payments