Sonntag, 8. Juni 2008

Buying Property in Berlin - from the Sunday Times

Almost 20 years after reunification, Berlin’s bohemian lifestyle is attracting overseas buyers. Just don’t expect a quick profit

Berlin is a new city; the newest I have ever seen,” Mark Twain remarked in 1891. He might well say the same today. Nearly two decades after reunification, the German capital’s landscape continues to be redrawn. The division between east and west that once defined the city is now barely noticeable - just a few desultory chunks of the Wall remain - and the city is thriving as a hotbed of modern, experimental architecture. With a unique combination of cold-war history and a reputation for hedonism, Berlin is bang on the zeitgeist: Matt Damon, Angelina Jolie and Sam Riley are among those who have been seduced into buying homes in and around the city.

It is not only celebrities who are moving in. New luxury redevelopments of the city’s atmospheric former factories and 1960s apartment buildings - coupled with some of the lowest property prices in Europe - are starting to draw British and Irish buyers. Factor in Berlin’s reputation as a leafy, bohemian artistic centre in the midst of a cultural rebirth and the city’s estate agents and developers have a new client: the “lifestyle buyer”.

“We’ve sold to more than 100 British buyers in the past two years,” says Darrell Smith, managing director of Buy Berlin, a British company selling property in the city. “Although the euro/pound exchange rate hasn’t helped recently, there are lots more people looking for this kind of lifestyle apartment. Low-cost airlines mean they can use them as weekenders; buyers just want to be sure they are no more than 15 minutes from the centre of town.”

Last year, north Londoner Hari Hundle, 31, the vice-president of a private bank in the City, and his girlfriend, Simone Scheuer, 29, a portfolio manager, decided to spend £390,000 at one such luxury development, buying a three-bedroom loft apartment in the Fehrbelliner, a former lift factory on the border between Mitte - the historic centre of the city - and the trendy, sought-after district of Prenzlauer Berg, to the east.

“We went to Berlin on holiday a few years ago and fell in love with the place,” Hundle says. “A place of this quality, with its huge ceilings, open-plan living areas and warehouse feel, plus a rooftop terrace, would cost £5m in London.

“Berlin is so much funkier than London, and it has an originality that most European cities don’t have any more,” he says. “It reminds me a lot of New York’s Lower East Side 10 years ago. We have been buying art seriously since we started coming here.” Hundle is no doubt helping to support the burgeoning community of New York artists in Berlin, driven from Manhattan in a huge exodus by unaffordable property prices.

By the time Fehrbelliner is completed, in spring 2010, it will contain 200 loft apartments, penthouses and maisonettes, many with roof terraces from which the cityscape can be viewed. There will be a spa and leisure complex on site, as well as upmarket boutiques and galleries. Smith, who is selling homes there for between £160,000 and £1.96m, says that a quarter of the buyers are British. Hundle’s neighbours will include brokers, media gurus and celebrities, among them the Canadian rocker Bryan Adams.

Smith says that the flat could be let out for up to £2,000 per month on a short-term let - quite different to the long-term tenancy arrangements that have made Berlin, a city where less than 15% of the population owns property, attractive to investors looking for guaranteed letting. “Because buyers want to use their flats over weekends and holidays, they are increasingly looking for short-term let arrangements,” he says.

Although the Fehrbelliner is one of the most expensive developments in the city, Prenzlauer Berg’s tall, graceful stucco-fronted Altbauten (old buildings), dating from the 1890s, its organic cafes, vintage clothes shops and secondhand bookshops all contribute to the area’s boho charm. It is also popular with yummy mummies, giving it a reputation as Germany’s “nappy valley”.

But it is just one of many areas rapidly gaining a reputation for idyllic inner-city living.Like London, Berlin is a sprawling metropolis made up of a collection of village-like communities, with park- and lake-dotted districts spread out over 340 square miles. These days, interest is concentrated on areas that lay in the former Communist east when the wall went up in August 1961 - not just Mitte and Prenzlauer Berg, but the former working-class suburb of Friedrichshain, with its Soviet-style architecture and underground nightclubs. Property prices start at about £1,300 per square metre, with one-bedroom flats costing as little as £50,000.

Others are looking to areas in the former west - such as Kreuzberg, which lay on the allies’ side of the wall, but has found itself in the heart of the reunited city. The Viktoria Park Residence, a six-storey 19th-century townhouse, is being totally refurbished: 32 flats, maisonettes and lofts are being created, many with high ceilings, elaborate cornices, original, intricately laid oak flooring and Kachelöfen, the tall, tiled ovens traditionally used for heating.

Kreuzberg is now well known for its multicultural society and cafe culture, as well as being the site of Designmai, a cutting-edge annual design exhibition. At Viktoria Park, a 50-square-metre one-bedder costs £69,000, with prices rising to £295,000. Many units will have balconies overlooking the park itself - a popular weekend leisure spot for Berliners, with its hillside views and cascading fountains. They are for sale with Norenva, a Berlin-based agency.

A very different feel is offered by Charlottenburg and Wilmersdorf, which lie further to the west, beyond the Tiergarten, the large park in the middle of the city. With their smart 19th-century Wilhelmine townhouses and wide, shop-lined boulevards, they have always been popular areas for the moneyed middle classes. As a result, homes in upmarket developments here can be more expensive: a 250-square-metre family flat can cost £600,000.

Whether former east or west, almost all the properties on offer are in refurbished buildings. Despite the construction of large numbers of offices and public buildings, which have transformed central Berlin over the past two decades, there have been few residential new-builds - largely because property prices have been so low, it has simply not been worth it. Potential buyers seem happy with that. “Most people prefer to buy something old, refurbished and with character,” says Sandra Rex, the managing director of Norenva.

So, once you’ve got the kudos of a Berlin pad, you’ll need to get the right lifestyle. And, in this city, whatever you’re into isn’t hard to find. If it’s high culture you want, leave behind the trendier areas, where many of the old tenement blocks are still rabbit warrens of artists’ studios, and hang out in Mitte. Here, Museum Island, on the Spree, has a collection of world-class museums and galleries that are undergoing a huge restoration, to be completed in 2015. At the Reichstag, Norman Foster’s glass cupola caps a building groaning under the weight of its history. Visit Daniel Libeskind’s famous zigzag Jewish Museum, too, for contemporary architecture at its most extreme - and symbolic.

And after dark? If your idea of Berlin nightlife stops at cabaret-style performances, think again. The city has three opera houses, as well as scores of theatres and cinemas. British media luvvies have given Berlin its seal of approval, with a branch of Soho House scheduled to open soon. The electropop and underground dance scene is thriving, too: iconic clubs such as the Panorama Bar, in Friedrichshain, and Weekend, on Alexanderplatz, still pack in the ravers. Ross Godfrey, founder member of the British trip-hop outfit Morcheeba, has just invested in a flat in town. “Visitors find that Berlin is a new town,” Smith says. “It is full of young people who have no hang-ups from the past.”

Wyndham Wallace, 36, a writer and music manager, moved to Berlin four years ago. He let out his two-bedroom flat in Brixton, south London, preferring to rent an 85-square-metre apartment in south Berlin, and is now looking to buy. With the cost of the living half that in London, Wallace has decided to make the German capital his permanent adopted home town.

“I could really make my finances stretch in Berlin,” says Wallace, who is writing a biography of the late country-music star Lee Hazlewood. “I was attracted by the quiet and the space - and, when people smile at you here, they really mean it.” He plans to sell up in Britain and spend up to £160,000 on a flat in Kreuzberg.

Wallace’s motivation to buy has been sheer love of the city. But is it a good bet for investors? After all, the fact that properties in Berlin are cheaper than their equivalents in Prague or Warsaw does not automatically mean they will rise any time soon; indeed, some British investors who have bought in recent years, hoping to make a killing, have been disappointed.

“House prices in Berlin have fallen by 15% since 1995,” says Tobias Just, a property analyst at Deutsche Bank. “They have stabilised in the past three years, but are moving slowly - about 1.5% a year since 2005. We expect prices to continue to rise, but not at a breathtaking pace. It’s a low-growth city.” Purchase costs, too, are prohibitive, adding up to 11% to the sale price.

Bill Blevins, an international investment and tax adviser, agrees with Just. “Berlin is still very much an emerging market,” he says. “But I’d say that you could make yourself a lot of money, in 10 years’ time, by investing there.”

Wallace, too, has words of caution. “Get to know the city before buying here,” he says. “People come in pursuit of this famous bohemian factor, thinking it is going to be a kind of debauched Valhalla. Actually, Berlin is very peaceful. It’s a big city with rustic charm.”

by Emma Wells

Where to buy in Berlin:

Mitte: With high-end luxury loft and flat developments, the heart of the city has been rapidly gentrified.

Prenzlauer Berg: In the former east, the city's "nappy valley" is full of converted factories and 19th-century houses.

Friedrichshain: The centre of the city's alternative scene is popular with families and students.

Kreuzberg: This trendy multicultural distrtict just south of the centre has cocktail bars, restaurants and refurbished factories, and Altbauten. This 19th-century monument in Kreuzberg - a former hospital set in parkland - has recently been converted.

Zehlendorf: An exclusive residential area of West Berlin full of classical-style mansions and scenic riverside landscapes.

Wilmersdorf: With its smart boutiques, this western district is popular with professionals.

Charlottenburg: A long-established residential area to the west of the centre with upmarket living and great shopping.

source: from the Sunday Times, June 8th, 2008

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