The German Leasehold Association has analysed the allocation and existing stock of leasehold rights in Germany in its latest Leasehold Monitor. For this survey, 138 leasehold providers nationwide were questioned about their practices and portfolios. The majority of participants consisted of municipalities, churches and church foundations, which traditionally act as significant owners of large land areas.
Significant regional differences were observed in the allocation of leasehold rights. 20 percent of the institutions surveyed allocated most of their leasehold rights in Lower Saxony. Baden-Württemberg follows with 16.7 percent. Bavaria and North Rhine-Westphalia each account for 12.5 percent. These are the federal states with the highest activity in the field of leasehold rights. Reasons for this often lie in historical ownership structures and land policy.
Regional Concentration and History
Hesse positions itself in the midfield for the allocation of leasehold rights with 10 percent, Rhineland-Palatinate with 9.2 percent, Brandenburg with 6.7 percent and Saxony with 4.2 percent. The lowest activities in this segment were registered in the city-states of Bremen and Hamburg as well as in Saarland. This is understandable, as large federal states naturally offer more scope for the allocation of leasehold rights than urban centres with limited land ownership.
Dr. Matthias Nagel, Managing Director and Board Member of the German Leasehold Association, explained that the regional divergences are historically determined. Leasehold rights in Lower Saxony, for instance, have a long tradition, as shown by large leasehold providers such as the Klosterkammer Hannover, as well as cities like Wolfsburg and Lüneburg. In Baden-Württemberg, the Stiftung Schönau and the city of Heidelberg are prominent examples. Ecclesiastical organisations and municipalities often retain their land ownership long-term to pursue socio-political objectives or due to prohibitions on sale.
- —Lower Saxony: 20%
- —Baden-Württemberg: 16.7%
- —Bavaria: 12.5%
- —North Rhine-Westphalia: 12.5%
Since the 1950s, leasehold rights have experienced a renaissance. In the new federal states, however, the development was different; there, leasehold rights were historically shaped by the ownership structures of the GDR. The instrument was even abolished on 31.12.1975 and replaced by so-called “building ownership”.
Recently, an increasing number of municipalities nationwide are opting to allocate land under leasehold rights instead of selling it. This strategy enables them to prevent land speculation, maintain influence over the use of the areas, and pursue an active land policy that serves the long-term interests of the communities.
