Freitag, 17. Oktober 2008

Berlin is cool and property is remarkably affordable

by Lorna Blackwood

Apartments in the trendy parts of the German capital go for as little as £45,000





Berlin is pinning its hopes on the young. More than half its population is below the age of 35, media companies are flocking to the city and, with three excellent universities, it is establishing itself as the biotech and research capital of Germany.



The Government has invested €75billion (£59 billion) to improve the infrastructure of the city, enticing expatriates to find a home there or invest in residential properties. This, combined with numerous cultural and scientific places of interest, is only adding to the city's attraction.
The recent privatisation of the public housing stock has led to a small increase in the number of homeowners. However, the city has a strong rental culture - only 14 per cent of local people own their home - and with the rents low and laws heavily favouring the tenant, there is little to drive the domestic market.

Charles Peerless, a director of Winkworth's international department, concurs: “Berlin is exactly what the current housing market needs. With its huge rental market, it is a safe investment. The ‘less risk and less reward' strategy is what most long-term investors are choosing.”

The choice in Berlin ranges from the former East German high-rise blocks near Alexanderplatz and the experimental living communities of Kreuzberg to the Neo-Classical buildings of Prenzlauer Berg and Friedrichshain. The latter are the most popular with foreign investors.
These large apartment blocks, with their elegant stucco façades, were built in the early part of the 20th century and offer spacious, high-ceilinged accommodation that is usually ranged around an enclosed garden square. Most of these properties have been sold off in volume to investment companies that are extensively refurbishing, adding central heating, double glazing and modern kitchens and bathrooms. The buildings have been re-roofed, the communal gardens landscaped and all interiors redecorated, with the aim of increasing rents and, in turn, improving capital values.

Andreas Pichotta is one such developer. As a passionate Berliner and admirer of the city's architecture, he makes his projects as much a labour of love as an investment, although he knows what will make him money. “The most important part of the investment business is getting the right location,” he says. “There is an abundance of very cheap, unrefurbished property in the city but if you buy in the wrong place you are doomed.”

He uses his local knowledge to choose the buildings that he buys and refurbishes with great care. He has made good investments in Prenzlauer Berg and Friedrichshain. Prenzlauer Berg is an area of the city undergoing a renaissance. There is an abundance of restaurants, cafés, bars and eclectic boutiques. Many of Berlin's media, arts and student population live here. It was not bombed in the Second World War so there is a wealth of old-style apartment blocks. Many have been restored to enhance their traditional features, creating picturesque squares where regular farmers' markets attract affluent locals.

The area has the highest birth rate in Germany. It became very fashionable in the late 1990s and those who moved there then are now in their 30s, young professionals with families, looking for larger apartments. The location is perfect for commuting into the city and, accordingly, rents are beginning to rise. Dr Pichotta is refurbishing 6 Schönfliesser Strasse, pictured top right. One-bedroom flats there sell from €58,235 (£45,000). Such an outlay will earn him a monthly rental income of only €230. All his apartments are already pre-let to tenants, so his income is genuine and secure. The rental guarantee provided is for five years and has a yield of just over 4 per cent. The refurbishment of buildings is being undertaken throughout 2008, completing by the end of the year. The flats will be managed by the existing property manager and this is included in the fixed price. Investors are, however, liable for the sinking fund.

Winkworth also has a project in the area and is offering two-bedroom apartments in Thulestrasse. Almost all were snapped up after being released for rent after refurbishment. A two-bedroom flat of 62 square metres can cost as little as £66,584.

Perhaps an even better investment might be the slightly shabbier area of Friedrichshain, in East Berlin, which contrasts with the more gentrified and expensive areas of Prenzlauer Berg and Mitte. After the Berlin Wall came down, Friedrichshain began to develop a reputation as a young district. Its lower rents attracted artists and students; its multitude of empty flats also attracted the attention of West Berlin squatters. It retains its slightly run-down atmosphere - which gives it its character.

source: http://property.timesonline.co.uk/tol/life_and_style/property/overseas/article4954556.ece

Donnerstag, 16. Oktober 2008

Germany seen as a stable, long term option for property investors

Germany, which has always been regarded as having a stable but rather boring property market, is emerging as the number one target for cash-rich institutional investors who want to invest in the long term.


Few individual property investors have been tempted into the German property market. Many have been put off by the stringent rules for landlords and Germany has never been popular with holiday home owners.


But those who have bought property in Germany have not done so to make money quickly.

Prices have remained roughly stable in the residential sector over the last year.


Also in contrast to other European countries like the UK and Spain Germany did not experience a major housing boom in the late 1990s, early 2000s. Indeed just 42% of the population own their homes.


But there is strong evidence that companies and funds are already investing heavily in German property and that is about to expand.


Sales of commercial property in Germany surged to record levels last year but slumped in the first half of this year as the credit crunch began to bite and fears about the economic outlook dampened investor appetite.


But according to analysts this has opened the door for cash-rich investors like Sovereign Wealth Funds, banks and institutional funds to jump into the German real estate market.


In particular SWFs from China, Singapore and the Gulf are hovering. 'You have these big state funds considering acquisitions. The Russians may be making strategic investments too as Germany is still considered a stable option,' said Christine Schaefer, an analyst at DZ Bank.


These kinds of funds can be secretive and often buy via specially created holdings. Peter Starke, head of real estate firm Aengevelt's investment division, believes they are already investing in Germany.

'They don't exactly walk around with signs around their necks. But I can think of two players from the Gulf region whom I strongly suspect are backed by wealth funds,' he said.

Some analysts think the SWFs are more likely to buy stakes in property management firms rather than investing directly. Some of these firms are strapped for cash due to the credit crunch and may wish to sell assets.

'I think there will be deals with owner-occupier retailers who are pushing the margins and keen to sell their real estate,' said Iryna Pylypchuk, of CB Richard Ellis.

To understand the nature of property in Germany it is necessary to look at the country's history and try to understand the people, according to Jonty Crossick of Ready2Invest which specialises in spotting emerging markets and believes in analysing the market before recommending it.

'If you look at the history of Germany it was very fragmented before 1862 and even after re-unification it never lost its federal nature. Cities have their own economic power bases. From a property point of view it doesn't have one city dominating like London in the UK,' he said.

This means that prices and rental yields can vary from city to city and also that each city has different attractions. Frankfurt is regarded as the commercial and financial centre of the country whereas Munich is seen as the cultural capital.

'Also the mind set in Germany is less entrepreneurial and more cautious. The Germans are much more averse to risk and borrowing and more anti-inflation than other economies like the UK and the US,' added Crossick.

One result is that Germans tend to rent rather than buy. This has positive and negative outcomes for potential property investors.

The main negative is that rents are set by each municipality and rental contracts are often for indefinate periods. Germans think nothing of staying in the same rental for 10 years or more.
'There are plenty of rules and regulations that limit the potential of returns,' said Mark Bingham, managing director of Owner Invest, which specialises in buy-to-let investments and hotel rooms. 'The amount of rent you are able to charge is strictly enforced and landlords who go over the maximum rental value can face severe penalties. There are also limits to how much and often you can increase the rent.'

But there are plus sides too. 'Tenants are usually expected to pay the utilities bills, property taxes and most other costs associated with running the property and most are rented unfurnished. From an investment point of view yields of around 7% can be achieved,' added Bingham.

The company believes that one way into the German market for individual property investors is through the hotel industry. 'Germany is the largest country in the world when it comes to trade fairs, special events and festivals. It is the ideal place for attracting short term visitor,' said Bingham.

'In the domestic rental market you might be looking at a return of around 7%, with an hotel apartment you would be looking at around 14% based on 50% occupancy,' he added.

There is a healthy market in terms of German nationals buying property according to John Hitchcox, chairman of yoo, a design and investment company with projects in several German cities including Hamburg, Munich and Berlin.

Yoo project in BerlinIn development terms there are good investment opportunities. The company's project in Hamburg sold ahead of construction and it is looking at potential sites in Dusseldorf and another in Berlin for next year.

'Germany does have poor housing stock that needs re-furbishing, especially the stock in what was East Germany,' he said. As a result a number of institutions are buying up whole apartment blocks.

In terms of buying individual apartments it is the Germans themselves who are buying rather than foreign investors. Yoo has found that most buyers are Germans although a Fulham footballer has recently bought in Hamburg.

One thing for sure is that the Germany economy is suffering along with the rest of the developed world. A few days ago Jorg Decressin, chief of the International Monetary Fund's world economics division, said growth in Germany is now predicted at zero.

'Even though Germany has not experienced the same run up in house prices as other advanced economies, it has been an economy that has been flying pretty much on one engine and that engine was exports. With world growth now slowing that engine is now running out of gas,' he said.

Any changes in the Germany property market are likely to be slow and unspectacular. 'The real estate culture in Germany is changing but it will not be radical. The Germans are more likely to have investments in sectors other than housing because they have not had the level of property appreciation that has occurred in the UK or the US,' said Hitchcox.

source: http://www.propertywire.com/news/features/germany-stable-option-property-investors-200810151751.html

Donnerstag, 9. Oktober 2008

German property may soon lure sovereign wealth

By Dave Graham

BERLIN, Oct 9 (Reuters) - Sovereign wealth funds (SWFs) from Asia and oil-rich nations may be set to jump in to the German real estate market, helping to support a sector which has been knocked down but not out by the financial crisis.

Sales of commercial property surged to record levels in Europe's biggest economy last year, but they slumped in the first half of this year as bank losses, the credit crunch and fears about the economic outlook dampened investor appetite.

Banks and other institutional investors have scrambled to hoard cash as money markets froze, which should open the door for cash-rich funds from China, Singapore and oil producers in the Gulf region, said DZ Bank analyst Christine Schaefer.

"You have these big state funds considering acquisitions," she said. "And the Russians may be looking to make strategic investments here too. Germany is a stable option."

Peter Starke, head of the investment division at real estate firm Aengevelt, said the publicity-shy funds were probably already buying in Germany via specially created holdings.

"I can think of two players from the Arabian region whom I strongly suspect are backed by wealth funds," he said. "But the thing is, they don't exactly walk around with signs around their necks saying 'sovereign wealth fund ABC from country XY'."

If SWFs invest enough to support or even boost property prices, it should help stabilise investment and domestic consumption, said MM Warburg economist Carsten Klude.

In contrast to countries like Spain, Britain and Ireland, Germany did not experience a major housing boom in past years. As a result, its residential market has held steady in 2008, helping offset a big drop in commercial property transactions.

Marcus Lemli, capital markets chief for property services firm "I can think of two players from the Arabian region whom I strongly suspect are backed by wealth funds," he said. "But the thing is, they don't exactly walk around with signs around their necks saying 'sovereign wealth fund ABC from country XY'."

If SWFs invest enough to support or even boost property prices, it should help stabilise investment and domestic consumption, said MM Warburg economist Carsten Klude.

In contrast to countries like Spain, Britain and Ireland, Germany did not experience a major housing boom in past years. As a result, its residential market has held steady in 2008, helping offset a big drop in commercial property transactions.

Marcus Lemli, capital markets chief for property services firm Jones Lang LaSalle in Germany, says commercial turnover could drop to as little as 20 billion euros ($27.4 billion) in 2008 from a record 55 billion last year.

NO MORE LEVERAGING

The correction has been felt right across the country.

In the first half of 2008, revenue from sales of office, retail and other business premises were down by 75 percent in Berlin, the biggest single market, official data show.

Investment in offices in Cologne fell 82 percent over the same period, and by 68 percent in Munich. In Duesseldorf, spending on all types of real estate was down by half.

The drop in activity reflects the disappearance of highly leveraged foreign financial investors, who bought up big German portfolios before the credit crunch hit.

Even if liquidity returns to credit markets soon, some observers say investment will be tailored to long-term returns of the kind favoured by SWFs and German open-ended funds.

For now, though, investors remain cautious and prices may need to fall further before SWFs part with big sums of money.

"A lot of people also think we're heading for a recession, though we're not actually there yet," said Tobias Just, a property expert at Deutsche Bank in Frankfurt. "These new investors will need more certainty about this before they move."

A government source told Reuters on Wednesday that Berlin would soon cut its 2009 growth forecast for Germany to below 0.5 percent from a current estimate of 1.2 percent.

For now, the property market itself is giving little away, said Berlin estate agent Gottfried Kupsch.

"Basically nothing else will be sold this year," he said of the capital. "What we're hearing is that banks have closed their books for the year. It'll probably last till February at least."

INDIRECT STAKES

Germany's housing market, where the majority of homes are rented, is also seen as a safe, if unspectacular bet.

House prices fell in Britain by over 12 percent in August year-on-year, and in Spain by nearly 5 percent, industry figures show. German house prices, by contrast, were broadly flat this summer, according to data from financial services firm Hypoport.

JLL's Lemli said the SWFs which enter Germany are likely to buy stakes in property management firms rather than invest directly -- a strategy that is already underway in Europe.
On Tuesday, the Singapore government's wealth fund said it had raised its stake in U.K. real estate company British Land Co Plc to more than six percent.

SWFs could invest as much as $725 billion in global commercial real estate by end-2015, CBRE forecast last month.

One source of bargains may be asset sales by cash-strapped firms as the credit squeeze reaches the corporate sector.

"I think there will be more deals where owner-occupier retailers are pushing the margins and keen to sell their real estate," said Iryna Pylypchuk, an analyst at property consultancy CB Richard Ellis (CBRE).

"And I think there is going to be more pressure from the banks. So I think market activity will pick up later this year."

(Editing by Patrick Graham)


source: http://www.guardian.co.uk/business/feedarticle/7847453

Sonntag, 5. Oktober 2008

Italian Dolce Vita Meets Bavarian Quality Workmanship

Until a few years ago Giovanna Stefanel-Stoffel was enmeshed in the fashion world as the art director of her father's famous Venice-based Stefanel fashion designer company. After marrying a Bavarian, things have changed.

Today in Berlin, she's caught up in the world of real estate, as the wife and business partner of multi-millionaire Bavarian property developer Ludwig Maximilian Stoffel, 61, who along with his brother Manfred runs the German family's Stoffel Holding company.

"My husband has been active in the property development branch for 30 years," said the vivacious 53-year-old Italian. "When we first met I was deeply involved in the fashion industry. We decided we'd like to do something very special together. We fused our names, married three years ago, and created Stofanel Investment.

"We wanted to develop our own very special kind of art work. Planning started two years ago and now we're developing four big and very different-styled projects in the German capital."

Italy meets Bavaria

Projects, incidentally, that demand a 300-million-euro ($435-million) investment commitment on their part. "Italian Dolce Vita and Bavarian quality workmanship united in Prussia -- Giovanna Stefanel-Stoffel and Ludwig Maximilian Stoffel" -- proclaims a company press handout.

Last week, the cornerstone for the first Stofanel project was laid. Titled Marthashof Urban Village, it is to combine a mix of family-oriented town and garden-style houses, penthouses built around courtyards, as well as flats suitable for singles.

In all, 133 residential units will be built on a 12,380 square-meter (133,000 square-foot) site in Berlin's trendy Prenzlauer Berg district by 2010. "Forty percent of the accommodation has already been sold, which is better than we expected," said Giovanna.

Berlin site was once a women's home

The Marthashof site is a story in itself. In the 1850s a Christian-run hostel for maidservants was founded there after a number of young girls contracted syphilis after being lured to work in Berlin under false pretenses.

The "fallen" girls found refuge in the hostel and were given clean accommodations and medical help. Later, Marthashof became an officially recognized evangelical school for future maidservants, supported from 1903 onwards by wealthy Berliners.

By 1917 it had 450 pupils. But after Hitler rose to power, the school came under Nazi party rule, and ultimately closed. In 1943 it suffered a direct hit during an air raid and was destroyed, killing numerous women workers. Today a memorial remembers the former Marthashof on the city's Schwedter Strasse.

Germans look to Italy for good taste

Ludwig Maximilian Stoffel's eyes twinkle when he compares Italian and German characteristics. "Why do Germans go to Italy, wear Italian clothes, drink Italian wine? Because they're not sure of taste," he said. "The Germans usually don't know what is really trendy, what is fashionable.

The Italians are so sure: from clothes to glasses, from decoration to cars -- they made Ferrari.

"However, a Mercedes is also nice because you have no problems with it. If you buy from a reliable German estate company that has experience, that has a name and tradition, you can be sure you have something with quality," he added, noting his family's business in Straubing has "100 years of tradition."

Of her role in the Stofanel Investment company, Giovanna said: "I'm a shareholder and am on the supervisory board. As the art director I'm responsible for everything to do with aesthetics, lifestyle, coordination and integration.


"I watch the development of the undertaking very closely. After meeting my husband I realized I could bring my ideals into the property market business," she told the DPA news agency.
Her husband is impressed with the changes taking place in Berlin, which became reunited Germany's capital in 1990.

Recent change in new capital

"For investors in the 1990s, the biggest risk was the delay in deciding where the nation's capital was going to be -- Bonn or Berlin, but once that was decided things started falling into place.
"Big companies opened offices here, hotels were built, artists arrived, galleries opened and tourists flocked to the city again. But only in the past two years have the changes really become evident," he said.

His wife said she agreed. "What one can have in Berlin, one cannot get elsewhere. In Italy, many people want to buy small apartments in Prenzlauer Berg and other parts of this city because the prices are so reasonable.

"Berlin has sex appeal, offers a lot and is a relatively price worthy city. But the city does need entrepreneurs," she said.

Stoffel Holding has completed a multitude of buildings in various parts of Germany in the past 20 years, in addition to realizing projects at top addresses in Berlin.

Stofanel Investment employs some 25 architects, planners, and finance experts at its Berlin headquarters.

The couple, who have a house in Tyrol they escape to when in need of a break, are renowned for their warmth and generosity in Berlin. For several years now they have been acting as "parents" to 30 Nepalese orphans, paying for their education at an English private school in Katmandu, while offering supportive family environments.

Giovanna Stefanel-Stoffel, who has no children of her own, said she is grateful to her husband for creating the foundation that funds their Nepal activity. "Three times a year we travel to Kathmandu to see the children.

"We'll be going there again in October," she said. "Being with the youngsters, aged between five and 17, has become such an important part of our lives."

Donnerstag, 2. Oktober 2008

Gute Noten für Städte im Osten

Norbert Schwaldt 2. Oktober 2008, 10:19 Uhr

Feri-Rating bescheinigt Leipzig, Dresden und Berlin das größte Potenzial. Experten sorgen sich um die Abwanderung der Bevölkerung aus den ländlichen Gebieten

Leipzig, Dresden und Berlin sind für die Analysten der Rating-Agentur Feri die attraktivsten Märkte für Wohn- und Büroimmobilien in Ostdeutschland. Im gesamtdeutschen Vergleich liegen Leipzig und Dresden sogar unter den 15 besten Städten, wenn es um das Entwicklungspotenzial in den nächsten zehn Jahren geht.

Schlusslichter des Feri-Ratings von 15 ostdeutschen Städten mit mehr als 100 000 Einwohnern sind Chemnitz, Halle/Saale und Schwerin. Bei dem Rating werden wie bei Wertpapierprodukten Noten zwischen „AAA“ bis „E“ vergeben. Die Höchstnote „AAA“ hat in der Untersuchung des Bad Homburger Unternehmens allerdings keine ostdeutsche Großstadt erreicht.
Bei Büroimmobilien sehen die Feri-Experten Leipzig, Jena und Berlin an der Spitze. Die geringsten Erwartungen haben sie wie am Wohnungsmarkt bei Chemnitz, Magdeburg und Halle/Saale. Das Analyse-Haus berücksichtigt bei seiner Benotung unter anderem das Wertentwicklungspotenzial der Immobilien an den Standorten, die Bautätigkeit, das Wirtschaftswachstum, die Einkommen, die Zu- oder Abnahme der Bevölkerung und die Transaktionen mit Gebäuden. Es geht dabei um die künftige Profilierung der Städte, um ihre „ökonomische Schönheit“, wie Feri-Vorstand Knepel sagt.

„Wie in Westdeutschland wird sich der Zuzug in die Großstädte verstärken“, sagt Feri-Vorstand Helmut Knepel. Auch ein Ost-Westoder Nord-Süd-Gefälle werde es im alten wie im neuen Bundesgebiet in absehbarer Zukunft nicht mehr geben. Grund: „Die Menschen ziehen in Ost wie West der Arbeit nach und damit in die Großstädte“, sagt Knepel. „Damit wird die Landflucht bundesweit ein Problem.“ Vor allem die demografische Entwicklung und die wirtschaftliche Stärke einzelner Regionen würden zur Polarisierung beitragen.

Von den Zuzügen profitieren in Ostdeutschland vor allem Berlin, Potsdam, Leipzig und Dresden. Die größere Nachfrage werde sich auch in den Miet- und Kaufpreisen für Wohnimmobilien niederschlagen. Die seien, wie Knepel sagt, in den wichtigsten ostdeutschen Großstädten in den Jahren von 1995 bis 2001 rückläufig gewesen. Bis zum Jahr 2010 würden sie aller Voraussicht nach wieder ansteigen.

„In den Metropolregionen des Ostens werden gegenwärtig zu wenig Wohnungen gebaut, vor allem solche mit gehobener Qualität“, berichtet der Analyst. Dagegen werden in bestimmten Regionen noch auf lange Zeit Wohnungen abgerissen. „In der Folge wird es im Osten künftig nur noch einige überfüllte und prosperierende Städte geben“, sagt Knepel. „Und damit weitgehend entvölkerte Landschaften.“ Berlin wird nach seiner Ansicht aber weiter hinter den anderen europäischen Metropolen zurückbleiben. Daran werde sich auch in den nächsten zehn Jahren nichts ändern. Unter den sich am schlechtesten entwickelnden ostdeutschen Städten hebt Knepel Chemnitz hervor. Auch die bewerteten Standorte in Sachsen-Anhalt und Mecklenburg- Vorpommern bekamen schlechte Noten. Dagegen hält Analyst Knepel sehr viel vom Potenzial der Region Erfurt/Jena.

„Das Interesse für ostdeutsche Wohn- und Gewerbeimmobilien ist bei den Investoren mit Ausnahme gegenwärtig noch gering“, räumt Feri-Vorstand Knepel ein. Angesichts des niedrigen Preisniveaus sei das Desinteresse jedoch nicht zu verstehen. Für die Spitzenstandorte Leipzig, Dresden und Berlin ist der Analyst zuversichtlich. „Die besten ostdeutschen Städte haben gemeinsam, dass sie sich zu Wissenschaftsund Forschungszentren entwickelt haben“, hebt der Analyst hervor. Dadurch seien auch die Grundlagen für ein von Innovationen getriebenes Wachstum gegeben. Die gezielte Ansiedlung von wachstumsstarken Dienstleistern wie in Potsdam sowie von Hochtechnologien in Jena und Dresden gebe der regionalen Wirtschaft Impulse und belebe auch den Büro- und Wohnimmobilienmarkt.

quelle: http://www.welt.de/sonderveroeffentlichung/exporeal2008/article2513256/Gute-Noten-fuer-Staedte-im-Osten.html