Montag, 9. Juni 2008

Wide open spaces, high in Berlin

For most of the past century - and even today - Berlin was a city struggling to rebuild itself and, later, a symbol of Cold War divisions. Now, however, the city is becoming known for something else entirely: sprawling lofts and apartments.

With an abundance of unused factories and warehouses and a wealth of Jugendstil, or Art Nouveau, houses available for renovation, Berlin developers are finding new ways to inject style into the city's high-end housing market.

"In the last two years, the luxury housing market has really taken off in the center of Berlin, as more and more people decide that they would rather live in the heart of the city than on the outskirts," said Sascha Hettrich, a managing partner of the real estate advisory agency King Sturge, based in Berlin.

"But there is a shortage of homes that are larger than 120 square meters, so loft spaces and converted apartments in houses built between 1880 and 1930 are becoming extremely sought-after," he said.

In particular, districts like Charlottenburg-Wilmersdorf, Dahlem and Zehlendorf in the western part of the city are popular because of their good transport links, fashionable boutiques and wide range of restaurants.

Over on the eastern side, Mitte and Prenzlauer Berg are being gentrified, with a lot of both residential and commercial real estate construction under way, said Roy Frydling, the Berlin-based managing director of the real estate advisory firm Savills in Germany.

Berlin is following in the footsteps of cities like London and Chicago, where loft living has long been popular. Now, warehouses and factories, some of them along the Havel and Spree rivers, are being converted into spacious lofts of 150 square meters to 250 square meters, or 1,615 square feet to 2,690 square feet, Hettrich said.

Among the conversions already under way is a range of luxury apartments and lofts in Prenzlauer Berg, Mitte and Charlottenburg by 213, the Berlin-based architectural firm and developer. The company has created three lofts on one floor of a 1960s-era apartment building in Prenzlauer Berg, said Markus Schell, 213's managing director.

One loft has just been completed and the remaining two will be finished in July, although all three already have been sold. They range from 140 square meters to 200 square meters, with price tags of €355,000 to €715,000, or $560,000 to $1.12 million, depending on factors like size and finishings, he said.

For Paul Landymore, a former British bus company owner who is moving in, his new loft "ticked all the right boxes" for him and his German partner, who relocated from Exeter, in Devon. "We wanted a top-floor apartment so that we wouldn't have noise from above, and being able to put our own mark on it was a real bonus. We wanted to be in Prenzlauer Berg, because it's an area we really like because of the mix of people, both German and foreign, as well as the bars and cafes," Landymore said. "For us, this is a home, a fresh start - it's not an investment."
In Charlottenburg, 213 is working on similar lofts. Next year, the developer also intends to start renovating an old factory in Prenzlauer Berg, which will be converted into about eight lofts, all with "hanging gardens," Schell said.

The lofts, which will average about 250 square meters, are likely to cost between €600,000 and €800,000, he added.

One of the largest conversions in the city has been the Paul-Lincke-Höfe project, designed by the Berlin-based architectural firm Langhof and developed by Realprojekt Bau-und-Boden.

For the project, an old factory in Kreuzberg, right in the heart of the city, has been converted into 116 lofts ranging from 80 square meters to 250 square meters. The lofts are grouped around five "Gardens of Paradise," which were inspired by the Brothers Grimm fairy tales, according to Martha Schwartz, the American artist and landscape architect who designed them.

Over in Zehlendorf, Vohl Immobilien Partner is converting an old electronics factory into loft spaces ranging from 66 square meters to 400 square meters, all with ceilings 4 meters, or 13 feet, high. They cost between €180,000 and €1.1 million, without kitchen fittings. Many of the lofts have been sold.

Loft spaces, excluding fittings, usually sell for €1,800 to €2,800 a square meter, which can increase to as much as €4,500 for finished warehouses, said Hettrich of King Sturge.
Apartments in older houses, including Art Nouveau properties, typically sell for €3,000 to €4,000 a square meter, or about €400,000, and prices have risen about 10 percent in the past five years, said Frydling of Savills. However, prices in the city are not likely to grow by more than 5 percent this year and could stay flat, according to Savills.
Such prices are low in comparison with those in other German cities: In Frankfurt, a luxury apartment in a good location typically sells for about €5,000 a square meter; in Munich, about €10,000 a square meter.

Demand for luxury homes in Berlin has increased since the German Parliament relocated to Berlin from Bonn in 1999, according to Thomas Scharf, chief executive of the Berlin-based real estate firm Renaissance Real: "We have seen a massive increase in the number of people looking for luxury homes here. In the past four years, we have had between 100 and 150 requests a month for such properties, up from 15 to 20 a month previously."

In addition to domestic demand, there is a lot of interest being shown by celebrities, Russians and Middle Easterners, who are typically willing to pay very high prices, Scharf said.

However, unlike the share in other world capitals like London and New York, the luxury housing sector in Berlin accounts for only about 4 percent of the total market, including rentals.

Because of local government caps on rentals in Berlin, which keeps many rents low, and because of little capital growth, there is little incentive for people to get on the housing ladder, said Andrew Groom, head of the German valuation advisory department at Jones Lang LaSalle real estate in Frankfurt.

As a result, just 13 percent of all residents in the western part of the city own their own homes, compared with 45 percent in the state of Hessen, where Frankfurt is located, and 49 percent in the Bavarian capital of Munich, according to BulwienGesa, the German real estate consultancy.

Published: May 29, 2008

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