Lukinski Rating Germany: Investment Property - City List

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The Lukinski Rating Germany ranks almost 700 cities according to their investment potential — from A+ Hidden Champions to D Risk Champions. Those looking for real estate as an investment face the fundamental question: Should I go for net yield or long-term value appreciation? The answer depends directly on the location — and that’s exactly what this rating is for. In this guide, we show you how to read the ratings, which cities typically fall into which class, which key figures you can use to categorize each city, and how to avoid typical beginner mistakes when choosing the location for your first property.

Key Facts -

What the Lukinski Rating evaluates — and what it doesn’t

The Five Core Factors in Detail

What the Rating deliberately omits

City Rating vs. Neighborhood Rating: The Decisive Additional Filter

The Rating Scale in Direct Comparison: Return vs. Appreciation

City List: Example Assignment by Rating Class

A+ Hidden Champions: Value Appreciation Instead of Cashflow

When A+ Still Makes Sense

Typical trap — precisely calculated

Quiet risks in A+ locations

The B+ gap: The best risk-return ratio

Why B+ is the sweet spot for many investors

Example calculation B+ location Leipzig

Anker-Factor: What structurally stabilizes a B+ city

What the Lukinski Rating evaluates — and what it doesn’t

The rating bundles structural location factors into a single grade: population development, economic strength, infrastructure, labor market, and rental price dynamics. Two time periods are considered in parallel — the last ten years as a short-term trend and the last 30 years as a long-term foundation. This results in a grade that filters out short-term hype and highlights genuine structural strength.

The Five Core Factors in Detail

Population development: Growth or shrinkage of the population, including age structure and migration balance
Economic strength: GDP per capita, unemployment rate, tax revenue, major employers
Infrastructure: Transport connections, education, healthcare, digitalization
Rental price dynamics: Development of cold rent per m² over ten and 30 years, comparable to the rent index
Price level: Ratio €/m² compared to the national average, balanced with the standard land value

What the Rating deliberately omits

Microlocations within a city, individual property quality, or the personal real estate financing are not part of the rating. An A+ city does not protect you from a poor property in a bad street — and in a C city, the right apartment building can perform significantly better than the city average. The rating is therefore a preliminary selection, not a free pass.

City Rating vs. Neighborhood Rating: The Decisive Additional Filter

Berlin is rated as an A location — yet Mitte, Prenzlauer Berg, and Charlottenburg are effectively A+, while Marzahn-Hellersdorf, Hellersdorf, and parts of Spandau are more appropriately rated as C. The same applies to Hamburg (Eppendorf vs. Billstedt), Frankfurt (Westend vs. Griesheim), or Leipzig (Südvorstadt vs. Grünau). Anyone who only uses the city rating may end up buying a D property at A+ prices.

Rule of thumb: Within an A city, neighborhoods can differ by up to two rating classes
Indicators of Neighborhood Quality: Purchasing Power Index, Social Welfare Rate, Average School Grades, Vacancy Rate
Practice: City Rating for Preliminary Selection, Neighborhood Research for Property Decision

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The Rating Scale in Direct Comparison: Return vs. Appreciation

Each rating class follows its own investment logic. A locations are appreciation investments with low ongoing return, C and D locations are cash flow investments with higher risk. The following table shows typical key figures per class — gross yields, purchase price factors and realistic €/m² ranges.

Rating	Gross Yield	Purchase Price Factor	€/m² (Existing)	Strategy
A+ / A	2.5 – 3.5 %	28 – 40	5,500 – 12,000 €	Value appreciation, inflation protection
A-	3.5 – 4.5 %	22 – 28	3,800 – 6,500 €	Mixed strategy
B+ / B	4.0 – 5.5 %	18 – 25	2,500 – 4,500 €	Cash flow + moderate value appreciation
B-	5.0 – 6.5 %	15 – 20	1,800 – 3,200 €	Pure cash flow
C+ / C / C-	6.0 – 8.5 %	12 – 17	900 – 2,000 €	High yield, vacancy risk
D / D-	8.0 – 12 %+	8 – 13	400 – 1,200 €	Speculative, only with experience

The simplest rule in location investment: The higher the gross yield, the lower the value appreciation — and vice versa. Those looking for both at the same time buy in the B+ segment.

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City List: Example Assignment by Rating Class

The following overview shows typical example cities per class. Important: The exact classification can shift due to demographic and economic developments — the list serves as a guide, not as a binding recommendation. A complete database of all nearly 700 cities can be found in the main directory of the rating.

Klasse	Typical example cities	Charakteristik
A+	Munich, Hamburg, Frankfurt, Stuttgart, Dusseldorf	Top 7 Metropolises, high liquidity, high price level
A	Berlin, Cologne, Heidelberg, Freiburg, Wiesbaden	Cities with strong demand, moderate return pressure
A-	Münster, Bonn, Mainz, Karlsruhe, Regensburg, Ingolstadt	University or corporate cities, stable Sweet Spot
B+	Leipzig, Dresden, Nuremberg, Augsburg, Mannheim, Erlangen	Emerging metropolitan areas, best risk-return ratio
B / B-	Hannover, Bremen, Bielefeld, Erfurt, Kiel, Aachen	Solid medium-sized cities, good cash flow profiles
C	Wuppertal, Gelsenkirchen, Magdeburg, Halle, Chemnitz	Strukturwandelregionen, hohe Brutto-Rendite, demografisches Risiko
D	Salzgitter, Pirmasens, Görlitz, Suhl, Hoyerswerda	Shrinking cities, speculative profile, niche strategy

Note: The assignments are illustrative. Within each class there are ranges, and some cities are in transition — see the section “Class Transitions” below.

A+ Hidden Champions: Value Appreciation Instead of Cashflow

Munich, Hamburg, Frankfurt, Stuttgart, Dusseldorf — the A+ locations are considered the safest investments, but are often a trap for beginners. A purchase price factor of 35 means: The gross yield is only about 2.9%. After repayment, interest and reserve for maintenance, the ongoing cash flow is often negative — you pay every month.

When A+ Still Makes Sense

High Equity Ratio: At least 40 % Equity, so that the cash flow does not turn negative
Inflation Protection: For those who want to protect wealth from inflation, not actively build it up
Succession planning: Long holding period, later use inheritance tax strategies
Liquidity: Resale in A+ locations is also possible in crises
Rent security: High creditworthiness of tenants, low rent default rate

Typical trap — precisely calculated

A buyer finances a 65 m² apartment in Munich at 6,150 €/m² (purchase price 400,000 €) with 80,000 € equity. With 18 €/m² cold rent (1,170 € monthly rent, 14,040 € annually) and an annuity of about 18,500 € annually (3.8 % interest, 2 % amortization on 320,000 €) a running loss of about 4,500 € per year is generated — before property management fees, non-reimbursable shares and rent default buffer are taken into account. After all additional costs, a negative cash flow of 6,000 to 8,000 € annually remains realistic. The appreciation must more than offset this loss over the entire holding period — this has historically worked in Munich, but is not a natural law.

Quiet risks in A+ locations

Rent control + rent cap discussion: political risks stronger than in B/C
High service charges: often 4 – 5 €/m² in premium locations, of which 1.50 – 2 €/m² not recoverable
Renovation pressure: old buildings with high energy inefficiency
Value correction risk: after interest rate hike, strongest price declines in top locations

The B+ gap: The best risk-return ratio

The insider area of the rating are the B+ and A- locations: Leipzig, Dresden, Nuremberg, Münster, Karlsruhe, Mannheim, Bonn, Augsburg, Erlangen. Here you will find purchase price factors between 20 and 25 with stable rental demand and realistic value increases of 2 – 4 % per year. The ratio of current return and asset growth is structurally best in this class.

Why B+ is the sweet spot for many investors

Rent control often more moderate than in top 7 metropolitan areas
Less competition from institutional investors
Purchase ancillary costs: 9 – 12 % depending on the federal state — calculate in advance with the purchase ancillary costs calculator
Student cities with stable rental demand across economic cycles
Appreciation reserve through catch-up effect compared to A-cities
Large employer anchors: Siemens (Erlangen), BMW (Regensburg), SAP (Walldorf-Mannheim) structurally stabilize rental demand

Example calculation B+ location Leipzig

An 75 m²-Apartment in Leipzig for 220.000 € (≈ 2.930 €/m²) with 9 €/m² cold rent (8.100 € annually) results in a gross return of approximately 3.7 % with a factor of about 27. With a high-quality location at 11 €/m², the return increases to 4.5 %. With 25 % Equity (55.000 €) and 3.8 % interest, the cash flow is neutral to slightly positive depending on the amortization rate. Important: The rental level in Leipzig has more than doubled in 15 years — the actual leverage lies in the rent increase over the holding period. Compare your values with the local rent return before you invest.