Remote location

In real estate valuation, a peripheral location refers to a property situated on the outskirts of a city, in a rural setting, or in less-frequented areas with limited infrastructure and lower demand. In location assessments conducted in accordance with the ImmoWertV, a peripheral location is classified as a simple or moderate location and generally results in lower standard land values and market values compared to central locations. At the same time, peripheral locations offer advantages such as tranquility, green spaces, and lower purchase prices.

Characteristics and Valuation Criteria

Appraisers assess a peripheral location based on several factors: distance to amenities (shopping, doctors, schools), public transportation access, travel time to the nearest regional center, social infrastructure, and demographic trends in the surrounding area. In shrinking regions, a peripheral location may be associated with a significant risk of vacancy and declining standard land values. In growth regions, however, peripheral locations are upgraded through suburbanization: what is still a peripheral location today may be a sought-after outlying area tomorrow.

The commuting distance to the nearest employment center is decisive for the evaluation of a peripheral location: In the Nuremberg metropolitan region, with its well-developed S-Bahn infrastructure, even municipalities within a 30-40-kilometer radius of Nuremberg are attractive as functional residential locations. Communities with train stops along the S-Bahn lines (Roth, Ansbach, Neumarkt i.d.OPf.) benefit from rail connectivity and are no longer typical peripheral locations-even if they are geographically on the outskirts.

Opportunities and Risks for Investors and Buyers

Peripheral locations offer buyers significantly larger residential and land areas at affordable prices. The risk lies in potentially weaker value appreciation and dependence on cars. For investors, rentability and the risk of vacancy are the decisive factors: In structurally weak peripheral locations, long-term vacancy and falling rents can significantly reduce returns. A careful location analysis is therefore essential.

Peripheral locations have gained in attractiveness due to the rise of remote work: Those who work from home three to four days a week can better tolerate the distance to their workplace and instead prioritize living space, a garden, and peace and quiet. This trend caused prices in peripheral communities within the Nuremberg metropolitan region to rise significantly between 2020 and 2023.

Demographic Development as a Key Factor

The attractiveness of a peripheral location depends heavily on the region’s demographic and economic development. Municipalities with shrinking populations and a loss of jobs see peripheral locations coming under increasing pressure; booming metropolitan regions, on the other hand, are becoming more densely populated, so that once-peripheral locations are being incorporated into the suburban growth zone.

In the Nuremberg metropolitan region, population trends are positive overall-with growth concentrated in Erlangen, Fürth, and the southern surrounding municipalities. Even formerly peripheral municipalities such as Stein, Zirndorf, or Wendelstein have developed into sought-after residential locations that no longer represent typical peripheral locations today.

Practical Tip for Property Owners in Nuremberg and Franconia

The Nuremberg metropolitan region offers a wide range of options: Price differences are significant, ranging from downtown Nuremberg to outlying communities in Franconian Switzerland or the Altmühl Valley. Anyone selling a property in a peripheral location should clearly highlight advantages such as lot size, tranquility, and affordable purchase prices. We are familiar with the micro-locations throughout the entire metropolitan region and know which target groups can be specifically enticed to peripheral locations.

For owners in outlying areas, we recommend a clear definition of the target audience in marketing: families looking for more space, commuters with the option to work from home, nature lovers, and retirees are the typical prospective buyers. Texts and photos tailored to these target groups reach more potential buyers than general marketing.

Frequently Asked Questions

What exactly is the difference between a peripheral location and a less desirable location?

“Less desirable location” is a general term for areas with below-average quality of life, infrastructure, or social environment-even within the city. “Peripheral location” refers primarily to a geographically remote location. A less desirable location within the city is not automatically peripheral; a peripheral location in the surrounding area can certainly offer a good quality of life.

Are peripheral locations bad investments?

Not necessarily. Peripheral locations in growth regions (the outskirts of Nuremberg, Erlangen, Fürth) often develop positively. In structurally weak regions, however, increased caution is advised. Commuting distances, public transportation connections, and the municipality’s population trends are decisive factors.

Does a peripheral location affect financing?

Yes, banks assess the lending risk in peripheral locations more conservatively and often require a higher equity ratio or set a lower loan-to-value ratio. In structurally weak regions, financing can be more difficult and expensive than in sought-after locations.

Does the location affect the rental yield?

Peripheral locations often offer lower purchase prices, but also lower rents. The rental yield (rental income ÷ purchase price) can actually be higher in peripheral locations than in prime locations-but the risks (vacancy, weaker appreciation) are also higher. Those seeking to optimize returns should carefully analyze location trends and local tenant demand before investing in peripheral properties.

Which infrastructure features determine the development of peripheral locations?

Not all peripheral locations are the same. The expansion of public infrastructure is crucial for medium-term value appreciation: municipalities in the Nuremberg metropolitan region that see improvements in public transit connections-such as through the extension of S-Bahn lines, new bus stops, or park-and-ride facilities-often experience a noticeable increase in purchase prices. Conversely, municipalities that rely on car dependency and see no investment in rail or bus services lose relative appeal. Broadband expansion and cellular coverage are also relevant location factors today-especially for work-from-home households moving to outlying areas. Our market data for the Nuremberg metropolitan region shows: The price premium for locations with direct train access compared to municipalities of the same distance that are only accessible by car is typically 10 to 20 percent for comparable properties. This premium reflects the long-term rentability and marketability of the property.

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