Investing in Germany Want a morgue, a TV tower, or Goebbels' rundown wartime lakeside love-nest? Derek Scally on why Berlin is auctioning off, well, everything
Fancy living in the former lakeside love-nest of Nazi propaganda minister Joseph Goebbels?
Or how about owning Berlin's television tower, the city's most recognisable landmark after the Brandenburg Gate?
It's sale of the century in the German capital. The invasion of foreign investors into the property market has boosted confidence here to the point where even the city government is opening its property portfolio, filled with long-hidden jewels and one-of-a-kind development opportunities.
All are sold at public auction, without advance guide prices.
"The Irish are hugely interested in everything we have and our property portfolio is extremely varied," says Anette Mischler of the Berlin Real Estate Fund (Liegenschaftsfonds, LFB), a state body set up in 2001 to sell off property owned by the city state of Berlin.
"Until our body was created, an unlucky would-be investor had to talk to up to 26 different government bodies. Now there is just one point of contact."
Nearly 18 years after unification, Berlin remains a one-of-a-kind property market. Unlike other cities, like Munich where the state owns less than 5 per cent of city property, over half of property in the capital belongs to the Berlin state government, the senate.
This legacy of East German state ownership is a costly burden in a city with debts of over €40 billion and so the government has consolidated ownership of all its property into the LFB. Its mission: to auction it all off.
"We've got everything: empty hospitals, industrial buildings, disused wartime bunkers. We sold a morgue the other day," says Ms Mischler.
Until now, all that was lacking in this property pick n' mix were willing, solvent buyers.
But Germany's economic recovery in the last 12 months has taken care of that. Now foreign investors are arriving in the capital in huge numbers, attracted by the quality, location and value of the properties up for grabs.
Perhaps the most curious "fixer-upper" on the LFB books is the "Waldhof" villa 40kms north of Berlin, dubbed "Goebbels' love-nest".
The Nazi propaganda minister used the villa, completed in 1939, to entertain the German film industry's leading ladies until the war spoiled his fun and his family was forced to move here from Berlin in 1943. Two years later the Goebbels family left the villa for their notorious swansong in Hitler's bunker.
The 100sq m (1,076sq ft) villa, with a livingroom overlooking the Bogensee lake, was remodelled after the war into a youth hostel for scouts and regularly housed GDR bigwigs, including the later Politburo chief Erich Honecker.
Now empty and rather shabby, the villa will need a good makeover from its new owners. Thrown in with the villa is 15 hectares (37 acres) of forest grounds.
Back in central Berlin, and just about to come on the market, is the Alte Manze (Old Mint) located in the eastern city centre just behind Alexanderplatz and Berlin's landmark "Rotes Rathaus" town hall.
Another landmark building up for auction is the Lapidarium, located directly on the Landwehr Canal near Potsdamer Platz. The building has a varied history - it was Berlin's first pumping station in the 19th century and Andy Warhol held wild parties here in the 1980s. Today the building is home to city statues that are surplus to requirements.
The LFB has no shortage of undeveloped sites of interest to property developers.
Cream of the crop is the Humboldthafen (Humboldt Harbour), opposite Berlin's new main train station and just 200 metres from the Chancellery and the Reichstag.
Investors are being sought for a 110,000sq m (1,184,029sq ft) waterside mixed-use residential and commercial development surrounding the harbour basin and the LFB has just begun to release onto the market the first of nine sites, varying from 3,900-23,000sq m (41,979-247,569sq ft).
"There is no other city in Europe with such huge sites in a central location on the open market, only in Berlin," said Ms Mischler.
Another site about to come on the market is on Hausvogteiplatz, near the foreign ministry and just behind Unter den Linden boulevard. It's expected to be turned into a development of townhouses, similar to another popular development nearing completion on a neighbouring site. Perhaps the LFB's most sought-after sites at the moment are a 24,000sq m (258,333sq ft) area of development property in the embassy district facing the Tiergarten park.
"People are snatching those sites out of our hands," says Ms Mischler.
She warns that much of the agency's high-yield property has already been sold off, making the property on offer more suitable for mid-to-long-term investment.
But the ongoing inventory process of Berlin's state-owned property agency means that the LFB doesn't know what it will have to auction off in the months and years to come, and recommends that potential investors make contact.
Last year the agency sold property worth €280 million and already 2007 looks like it's going to be a record year.
One landmark object not being sold by LFB which has just come on the market is the landmark Television Tower, a Sputnik-like monument to superior Communist engineering built in 1969.
Paddy Power bookmakers is already speculating that Coca Cola will buy the tower, worth an estimated €40 million, from its current owner Deutsche Telekom.
"The television tower is the ideal advertising hoarding for the company," said Paddy Power, "high above the roofs of the city, popular with Berliners and a popular tourist attraction."
But Berlin officials have rejected the idea of using the 368-metre tower for advertising purposes, making it unclear what the new owners are expected to do exactly with their new plaything. But with a fantastic viewing deck, a retro bar and revolving restaurant, anything goes . . .
Werner Jenke
source: http://www.ireland.com/newspaper/property/2007/0329/1175003387366.html
00 49 30 22 33 69 72 werner.jenke@liegenschaftsfonds.deMr Kai Renken
00 49 30 22 33 66 95
Kai.Renken@liegenschaftsfonds.de© 2007 The Irish Times
Donnerstag, 29. März 2007
Dienstag, 20. März 2007
Walls of investment come down in Berlin
While property soars around the world, one country's prices are actually falling. So is this the time to snap up a bargain in Germany? Graham Norwood reports
Professional property investors say that if house prices have already risen in an area, they've missed the boat - and the bargains - and should move on to lower-priced locations. In which case, there must be an awful lot of investors staring at Germany.
At first sight, its feeble housing market performance seems inexplicable. Prices have fallen since 2000, while across the whole of western Europe values have risen by an average 90 per cent and those in Britain by 120 per cent.
Germany still limps along at the bottom of estate agent Knight Frank's Global Price Index, too, the latest results from which are revealed exclusively in The Sunday Telegraph.
Latvia tops the chart, with prices in the capital, Riga, rising by 66·6 per cent in a year. It is followed by Poland - a new entry because reliable figures were not previously available - and Denmark, up 33 per cent and 22 per cent, respectively.
Both are neighbours of Germany, yet there it sits at the bottom of the Global Price Index, with prices actually falling by 3·2 per cent. This is despite it having the EU's biggest economy and largest population, making it appear ripe for canny investors.
Three problems have held Germany back, at least until now. Firstly, supply of homes has far exceeded demand. After reunification between East and West in 1990, there was ferocious new house-building by developers, vying for buyers with hundreds of thousands of unloved Communist flats suddenly on sale.
Secondly, subsidised housing and strict rent controls have made renting much more attractive than buying on the open market. German owner-occupation is only 43 per cent (it is 72 per cent in the UK), while in Berlin it is a mere 12 per cent and in Hamburg 20 per cent.
Thirdly, the cost of buying is high (you pay about 12 per cent of the purchase price in fees) and it's not so easy to get a mortgage in Germany as in most of Europe.
As a result, prices remain low even in cities which have seen modest rises recently. One-bedroom apartments in Berlin, the country's capital and largest urban centre, range from £20,000 to £60,000. Frankfurt, the most commercially successful city in Germany and mainland Europe's finance capital, ranges from £40,000 to £70,000.
High-rolling investors can even buy whole blocks. For £1·2 million, the price of an apartment in prime central London, you can get 28 flats in a 100-year-old block in the Wedding suburb of Berlin, albeit in need of extensive refurbishment.
But there are changes appearing in the market. House-building levels have dropped from western Europe's highest to its lowest in seven years, some rent subsidies are being phased out to encourage more people to buy, and competing mortgage products are trying to woo investment buyers.
"Being at the foot of the table now is exactly why investors should look at Germany," says Knight Frank's head of research, Liam Bailey. "But they must select the right property in the right city. The East is a no-go area because of continuing massive over-supply and poor quality, but some cities in the West are expanding." The most promising investment markets are in Hamburg, Berlin, Dusseldorf, Frankfurt, Stuttgart and Munich.
A few pioneering British investors have already taken the plunge. London civil servant Simon Luker has bought a small Berlin studio apartment in a modernised period block in the suburb of Neukollen for only £21,000.
"I've been looking to invest overseas for some time," he says, "and was surprised to learn German property was considerably lower than even Riga or Prague." Ray Chapman, a business manager from Hastings, and Sue Hart, head of a health treatment centre in Hertfordshire, looked at Eastern Europe but decided against investing because the infrastructure was relatively undeveloped. Instead they bought a £35,000 one-bedroom apartment 15 minutes from Berlin city centre.
"Berlin has a superb infrastructure and is almost tailor-made for buy-to-let," Ray explains. "Our investment is long-term, as German law dictates that any property sold within 10 years attracts 25 per cent capital gains tax. Berlin is an attractive rental market that isn't based on seasons or low-cost airlines getting routed."
Estate agents are now beginning to sell properties to foreigners. "New builds have been decreasing at a record level," says Gregory Lu of Imoinvest, an agency selling property in Berlin and Leipzig. "This means those new schemes that have been available achieve high sales with little or no discount. This has knock-on effects with the refurbishment of old blocks and larger buildings spilt into condos."
But there are still some sceptics. "The idea that the German market is a sleeping giant which will roar into action with a burst of high price inflation remains an elusive dream," writes Professor Michael Ball in his annual European housing survey for the Royal Institution of Chartered Surveyors. He repeats the warning that East Germany has "substantial oversupply contributing to weak prices and rents" but says the West is picking up.
Knight Frank's Liam Bailey maintains that this is exactly the point, however. "Investors should go behind the headline figure and look more closely at the German sub-markets," he says.
"That's where the hot spots are."
source: http://www.telegraph.co.uk/property/main.jhtml?xml=/property/2007/03/20/pgermany120.xml
Professional property investors say that if house prices have already risen in an area, they've missed the boat - and the bargains - and should move on to lower-priced locations. In which case, there must be an awful lot of investors staring at Germany.
At first sight, its feeble housing market performance seems inexplicable. Prices have fallen since 2000, while across the whole of western Europe values have risen by an average 90 per cent and those in Britain by 120 per cent.
Germany still limps along at the bottom of estate agent Knight Frank's Global Price Index, too, the latest results from which are revealed exclusively in The Sunday Telegraph.
Latvia tops the chart, with prices in the capital, Riga, rising by 66·6 per cent in a year. It is followed by Poland - a new entry because reliable figures were not previously available - and Denmark, up 33 per cent and 22 per cent, respectively.
Both are neighbours of Germany, yet there it sits at the bottom of the Global Price Index, with prices actually falling by 3·2 per cent. This is despite it having the EU's biggest economy and largest population, making it appear ripe for canny investors.
Three problems have held Germany back, at least until now. Firstly, supply of homes has far exceeded demand. After reunification between East and West in 1990, there was ferocious new house-building by developers, vying for buyers with hundreds of thousands of unloved Communist flats suddenly on sale.
Secondly, subsidised housing and strict rent controls have made renting much more attractive than buying on the open market. German owner-occupation is only 43 per cent (it is 72 per cent in the UK), while in Berlin it is a mere 12 per cent and in Hamburg 20 per cent.
Thirdly, the cost of buying is high (you pay about 12 per cent of the purchase price in fees) and it's not so easy to get a mortgage in Germany as in most of Europe.
As a result, prices remain low even in cities which have seen modest rises recently. One-bedroom apartments in Berlin, the country's capital and largest urban centre, range from £20,000 to £60,000. Frankfurt, the most commercially successful city in Germany and mainland Europe's finance capital, ranges from £40,000 to £70,000.
High-rolling investors can even buy whole blocks. For £1·2 million, the price of an apartment in prime central London, you can get 28 flats in a 100-year-old block in the Wedding suburb of Berlin, albeit in need of extensive refurbishment.
But there are changes appearing in the market. House-building levels have dropped from western Europe's highest to its lowest in seven years, some rent subsidies are being phased out to encourage more people to buy, and competing mortgage products are trying to woo investment buyers.
"Being at the foot of the table now is exactly why investors should look at Germany," says Knight Frank's head of research, Liam Bailey. "But they must select the right property in the right city. The East is a no-go area because of continuing massive over-supply and poor quality, but some cities in the West are expanding." The most promising investment markets are in Hamburg, Berlin, Dusseldorf, Frankfurt, Stuttgart and Munich.
A few pioneering British investors have already taken the plunge. London civil servant Simon Luker has bought a small Berlin studio apartment in a modernised period block in the suburb of Neukollen for only £21,000.
"I've been looking to invest overseas for some time," he says, "and was surprised to learn German property was considerably lower than even Riga or Prague." Ray Chapman, a business manager from Hastings, and Sue Hart, head of a health treatment centre in Hertfordshire, looked at Eastern Europe but decided against investing because the infrastructure was relatively undeveloped. Instead they bought a £35,000 one-bedroom apartment 15 minutes from Berlin city centre.
"Berlin has a superb infrastructure and is almost tailor-made for buy-to-let," Ray explains. "Our investment is long-term, as German law dictates that any property sold within 10 years attracts 25 per cent capital gains tax. Berlin is an attractive rental market that isn't based on seasons or low-cost airlines getting routed."
Estate agents are now beginning to sell properties to foreigners. "New builds have been decreasing at a record level," says Gregory Lu of Imoinvest, an agency selling property in Berlin and Leipzig. "This means those new schemes that have been available achieve high sales with little or no discount. This has knock-on effects with the refurbishment of old blocks and larger buildings spilt into condos."
But there are still some sceptics. "The idea that the German market is a sleeping giant which will roar into action with a burst of high price inflation remains an elusive dream," writes Professor Michael Ball in his annual European housing survey for the Royal Institution of Chartered Surveyors. He repeats the warning that East Germany has "substantial oversupply contributing to weak prices and rents" but says the West is picking up.
Knight Frank's Liam Bailey maintains that this is exactly the point, however. "Investors should go behind the headline figure and look more closely at the German sub-markets," he says.
"That's where the hot spots are."
source: http://www.telegraph.co.uk/property/main.jhtml?xml=/property/2007/03/20/pgermany120.xml
Donnerstag, 15. März 2007
ORCO Germany erhält Baugenehmigung für FEHRBELLINER in Berlin
eierliche Übergabe durch Berliner Senatorin für Stadtentwicklung
Frau Junge-Reyer auf der MIPIM in Cannes
Die Berliner Senatorin für Stadtentwicklung Frau Junge-Reyer überreicht Rainer Bormann, Vorstandsvorsitzender der ORCO Germany, die Baugenehmigung für FEHRBELLINER in Berlin auf der internationalen Immobilienfachmesse MIPIM in Cannes.
Cannes, 15. März 2007 - „Wir sind stolz, dass mit der Baugenehmigung in dieser Woche alle Weichen für den Baubeginn Ende März gestellt sind und ein sehr ambitioniertes und echtes Wohn-Loft-Living-Projekt im Herzen der Stadt realisiert wird. Bis heute sind bereits 40 Prozent der Fläche reserviert.“ so Rainer Bormann.
Mit der Entwicklung der „FEHRBELLINER“ des Architekten Eike Becker entsteht ein Projekt, in dem die Identität Berlin Mitte, die Ambition individueller Lebensentwürfe und die Perspektive des Standortes aufeinander treffen. Architektonisch zeigt sich das in der
Verschmelzung von Gegensätzen und einer Vielfalt an Produkten. Äußerlich wird ein
Kontrast von Baustilen, Formen und Materialien entstehen. In der neuen Gebäudestruktur gruppieren sich verschiedene Wohnwelten für spezielle Lebensmodelle: Lofts, Flats, Townhouses, Penthouses – jedes mit ganz spezifischen Merkmalen in nach fünf verschiedenen Leitideen entworfenen Ausstattungen. Entstehende Freiräume auf den Dächern, in den Höfen und Gärten werden für individuelle Nutzungen konzipiert und ergänzen die Wohnangebote mit verschiedenen Services und Features. Bereits Anfang der Woche erhielt ORCO Germany – ebenfalls auf der MIPIM in Cannes – die Baugenehmigung für das geplante Sky Office in Düsseldorf.
Weitere Informationen finden Sie unter www.fehrbelliner.de.
ORCO Germany
ORCO Germany ist eine am Open Market der Frankfurter Wertpapierbörse notierte Immobiliengesellschaft. Das
Unternehmen ist seit dem Jahr 2004 in Deutschland tätig und konzentriert sich auf Wohn- und Gewerbeimmobilien
sowie auf Asset Management und Projektentwicklung. Im Bereich Projektentwicklung hat sich das Unternehmen
durch die Akquisition der Viterra Development im Jahr 2006 strategisch verstärkt. Derzeit beschäftigt ORCO in
Deutschland 87 Mitarbeiter.
Orco Property Group
Die Orco Property Group ist mit EUR 1.31 Milliarde (Stand: 31.12.2006) Asset under Management ein führender
Investor, Projektentwickler und Asset- und Fondsmanager im Real Estate- und Hospitality-Markt in Zentraleuropa.
Orco Property Group mit Sitz in Luxemburg ist an den Börsen Euronext and Prague Stock Exchange notiert und
bereits seit 1991 in Zentraleuropa aktiv. Das Beteiligungsportfolio umfasst IPB Real, MaMaison Apartments &
Hotels, Orco Real Estate und andere Gewerbeimmobilien.
Orco Property Group agiert in verschiedenen Ländern, darunter überwiegend in der Tschechischen Republik,
Ungarn, Polen, Russland, Kroatien, der Slowakei und Deutschland und analysiert permanent mögliche
Investments in weiteren Regionen.
Orco Property Group ist zudem Initiator und Manager des Endurance Real Estate Fund, ein in Luxemburg
regulierter so genannter “Closed-End and Umbrella Fund” für Immobilien in Zentral-Europa. Der geschlossene
Immobilienfonds richtet sich an institutionelle Investoren und beläuft sich derzeit auf EUR 141,6 Mio. Asset under
Management und verwaltet Assets in Höhe von EUR 160 Mio. ORCO hat innerhalb dieses Dachfonds einen
zweiten Subfonds mit einem Zielvolumen von 100 Mio. EUR aufgelegt. Das Hauptaugenmerk liegt dabei auf dem
Erwerb, der Entwicklung, dem Management und der Veräußerung von Wohnimmobilien im Mittelklasse- und
Luxussegment in Zentraleuropa, Deutschland, Kroatien und Russland.
AUSSENDER
Marcel Wiskow
Kirchhoff Consult AG
Ahrensburger Weg 2
22359 Hamburg
T +49 40 60 91 86 55
F +49 40 60 91 86 60
marcel.wiskow@kirchhoff.de
www.kirchhoff.de
quelle: http://www.pressemeldungen.at/bauenwohnen/d9f65e9ad7125f20f.html
Frau Junge-Reyer auf der MIPIM in Cannes
Die Berliner Senatorin für Stadtentwicklung Frau Junge-Reyer überreicht Rainer Bormann, Vorstandsvorsitzender der ORCO Germany, die Baugenehmigung für FEHRBELLINER in Berlin auf der internationalen Immobilienfachmesse MIPIM in Cannes.
Cannes, 15. März 2007 - „Wir sind stolz, dass mit der Baugenehmigung in dieser Woche alle Weichen für den Baubeginn Ende März gestellt sind und ein sehr ambitioniertes und echtes Wohn-Loft-Living-Projekt im Herzen der Stadt realisiert wird. Bis heute sind bereits 40 Prozent der Fläche reserviert.“ so Rainer Bormann.
Mit der Entwicklung der „FEHRBELLINER“ des Architekten Eike Becker entsteht ein Projekt, in dem die Identität Berlin Mitte, die Ambition individueller Lebensentwürfe und die Perspektive des Standortes aufeinander treffen. Architektonisch zeigt sich das in der
Verschmelzung von Gegensätzen und einer Vielfalt an Produkten. Äußerlich wird ein
Kontrast von Baustilen, Formen und Materialien entstehen. In der neuen Gebäudestruktur gruppieren sich verschiedene Wohnwelten für spezielle Lebensmodelle: Lofts, Flats, Townhouses, Penthouses – jedes mit ganz spezifischen Merkmalen in nach fünf verschiedenen Leitideen entworfenen Ausstattungen. Entstehende Freiräume auf den Dächern, in den Höfen und Gärten werden für individuelle Nutzungen konzipiert und ergänzen die Wohnangebote mit verschiedenen Services und Features. Bereits Anfang der Woche erhielt ORCO Germany – ebenfalls auf der MIPIM in Cannes – die Baugenehmigung für das geplante Sky Office in Düsseldorf.
Weitere Informationen finden Sie unter www.fehrbelliner.de.
ORCO Germany
ORCO Germany ist eine am Open Market der Frankfurter Wertpapierbörse notierte Immobiliengesellschaft. Das
Unternehmen ist seit dem Jahr 2004 in Deutschland tätig und konzentriert sich auf Wohn- und Gewerbeimmobilien
sowie auf Asset Management und Projektentwicklung. Im Bereich Projektentwicklung hat sich das Unternehmen
durch die Akquisition der Viterra Development im Jahr 2006 strategisch verstärkt. Derzeit beschäftigt ORCO in
Deutschland 87 Mitarbeiter.
Orco Property Group
Die Orco Property Group ist mit EUR 1.31 Milliarde (Stand: 31.12.2006) Asset under Management ein führender
Investor, Projektentwickler und Asset- und Fondsmanager im Real Estate- und Hospitality-Markt in Zentraleuropa.
Orco Property Group mit Sitz in Luxemburg ist an den Börsen Euronext and Prague Stock Exchange notiert und
bereits seit 1991 in Zentraleuropa aktiv. Das Beteiligungsportfolio umfasst IPB Real, MaMaison Apartments &
Hotels, Orco Real Estate und andere Gewerbeimmobilien.
Orco Property Group agiert in verschiedenen Ländern, darunter überwiegend in der Tschechischen Republik,
Ungarn, Polen, Russland, Kroatien, der Slowakei und Deutschland und analysiert permanent mögliche
Investments in weiteren Regionen.
Orco Property Group ist zudem Initiator und Manager des Endurance Real Estate Fund, ein in Luxemburg
regulierter so genannter “Closed-End and Umbrella Fund” für Immobilien in Zentral-Europa. Der geschlossene
Immobilienfonds richtet sich an institutionelle Investoren und beläuft sich derzeit auf EUR 141,6 Mio. Asset under
Management und verwaltet Assets in Höhe von EUR 160 Mio. ORCO hat innerhalb dieses Dachfonds einen
zweiten Subfonds mit einem Zielvolumen von 100 Mio. EUR aufgelegt. Das Hauptaugenmerk liegt dabei auf dem
Erwerb, der Entwicklung, dem Management und der Veräußerung von Wohnimmobilien im Mittelklasse- und
Luxussegment in Zentraleuropa, Deutschland, Kroatien und Russland.
AUSSENDER
Marcel Wiskow
Kirchhoff Consult AG
Ahrensburger Weg 2
22359 Hamburg
T +49 40 60 91 86 55
F +49 40 60 91 86 60
marcel.wiskow@kirchhoff.de
www.kirchhoff.de
quelle: http://www.pressemeldungen.at/bauenwohnen/d9f65e9ad7125f20f.html
Freitag, 12. Januar 2007
Lured by Property Bargains, Foreign Investors Flock to Berlin.
Drawn by some of the lowest property prices in Europe and signs of an economic revival in Germany, foreign investors are rushing to Berlin to get a piece of the hot real estate market.
Christine Munch, a 31-year-old graphic designer from Norway, last year bought an apartment in Berlin's Mitte neighbourhood for 157,000 euros ($203,000), or less than at least three times the amount she would have paid for a comparable place in Oslo.
"Owning an apartment that's really cheap in the middle of such a vibrant and culturally rich city is a dream come true," said Munch of her 100-square-meter (1,080-square-feet) home located on the 19th floor of a prefabricated high-rise close to where the Berlin Wall once stood.
The apartment, which offers sweeping views of the city, is five minutes away from a subway station in the city's centre.
Flood of foreign homebuyers
Notwithstanding Berlin's sluggish economy and high jobless rate, Munch is among a wave of foreign buyers lured to the German capital in recent years by some of the lowest property prices in Europe. Most of the investors are from Britain, Ireland and the US, followed by Spain, Norway, Sweden and France.
Jürgen Michael Schick, vice president of the IVD Real Estate Association of Germany said that over 10 billion euros were spent on Berlin properties in 2006. "Foreign investors accounted for more than 66 percent of those transactions," he said.
The surge in interest is fuelled by coverage in the international media with British dailies such as The Observer and The Daily Telegraph labelling Berlin a good place to buy a second home and the property pages of newspapers in France, Spain and Ireland routinely advertising real estate in the German capital.
"Cheapest metropolis in Europe"
"Berlin is the cheapest metropolis in Europe. Real estate values are significantly lower than those in London, New York or even Prague and Moscow," said Philipp C. Tabert, head of Berlin-based real estate consultancy Winters & Hirsch, whose firm generated annual revenue of 220 million euros last year. Almost 95 percent of Tabert's clients are from Britain, Ireland, America, Spain, Italy and France.
The dramatically low-cost nature of Berlin's property market is obvious when compared with other European cities.
According to statistics, real estate prices for Berlin dropped every year from 1996 to 2004. For that same period, real estate values in London climbed 80 percent. One estimate said a square meter for a renovated apartment in a prime area in Berlin today costs around 1,500 euros, while in London it's no less than 15,000 euros.
It's a difference that's hard to ignore.
Gary Savage, a teacher from London, said his 87-square-meter apartment in the heart of the coveted Mitte district -- for which he shelled out 145,000 euros -- was a real bargain.
"You couldn't even buy a garage or a shed in London today for that price," he said.
Eastern neighborhoods still popular.
Foreign homebuyers are attracted to the neighbourhoods of Friedrichshain, Prenzlauer Berg and Mitte in former Communist-ruled East Berlin -- famed for their fashionable cafes, lively clubs and central locations. But investors are also increasingly shopping around in districts in western Berlin such as Zehlendorf and Steglitz and other outlying neighbourhoods, experts say.
In recent years, not only private homebuyershave been flocking to Berlin but also increasingly private equity funds, such as New York-based Cerberus Capital Management and Goldman Sachs Group's Whitehall investment fund. In 2004, the two together bought 65,700 units of Berlin's public housing for 2.1 billion euros.
In 2006, other big investors included Swedish insurance company Akelius and GE Real Estate.
"Today foreign investors aren't just looking for high yields and quick profits but are more interested in sustainability with a long-term commitment of 10 to 15 years," Schick said, adding that Berlin's home-ownership rate of just 13 percent also meant that the market still had potential to grow.
Experts point out that foreign investors are also emboldened by signs of an overall economic revival in Germany as rising consumer confidence drives demand for housing. The country's economy is expected to increase by 2.5 percent this year, unemployment fell to the lowest in four years in November and business confidence surged to a 15-month high.
Most agree that Berlin's present property boom is here to stay as opposed to the upswing of the 1990s, which was marked by a spectacular crash when a state-owned bank had to be bailed out by the city as a result of failed real-estate investments.
"In the long-term, Berlin property investments will turn out to be very positive," Schick said.
"We're expecting them to reach a new record in 2007."
Christine Munch, a 31-year-old graphic designer from Norway, last year bought an apartment in Berlin's Mitte neighbourhood for 157,000 euros ($203,000), or less than at least three times the amount she would have paid for a comparable place in Oslo.
"Owning an apartment that's really cheap in the middle of such a vibrant and culturally rich city is a dream come true," said Munch of her 100-square-meter (1,080-square-feet) home located on the 19th floor of a prefabricated high-rise close to where the Berlin Wall once stood.
The apartment, which offers sweeping views of the city, is five minutes away from a subway station in the city's centre.
Flood of foreign homebuyers
Notwithstanding Berlin's sluggish economy and high jobless rate, Munch is among a wave of foreign buyers lured to the German capital in recent years by some of the lowest property prices in Europe. Most of the investors are from Britain, Ireland and the US, followed by Spain, Norway, Sweden and France.
Jürgen Michael Schick, vice president of the IVD Real Estate Association of Germany said that over 10 billion euros were spent on Berlin properties in 2006. "Foreign investors accounted for more than 66 percent of those transactions," he said.
The surge in interest is fuelled by coverage in the international media with British dailies such as The Observer and The Daily Telegraph labelling Berlin a good place to buy a second home and the property pages of newspapers in France, Spain and Ireland routinely advertising real estate in the German capital.
"Cheapest metropolis in Europe"
"Berlin is the cheapest metropolis in Europe. Real estate values are significantly lower than those in London, New York or even Prague and Moscow," said Philipp C. Tabert, head of Berlin-based real estate consultancy Winters & Hirsch, whose firm generated annual revenue of 220 million euros last year. Almost 95 percent of Tabert's clients are from Britain, Ireland, America, Spain, Italy and France.
The dramatically low-cost nature of Berlin's property market is obvious when compared with other European cities.
According to statistics, real estate prices for Berlin dropped every year from 1996 to 2004. For that same period, real estate values in London climbed 80 percent. One estimate said a square meter for a renovated apartment in a prime area in Berlin today costs around 1,500 euros, while in London it's no less than 15,000 euros.
It's a difference that's hard to ignore.
Gary Savage, a teacher from London, said his 87-square-meter apartment in the heart of the coveted Mitte district -- for which he shelled out 145,000 euros -- was a real bargain.
"You couldn't even buy a garage or a shed in London today for that price," he said.
Eastern neighborhoods still popular.
Foreign homebuyers are attracted to the neighbourhoods of Friedrichshain, Prenzlauer Berg and Mitte in former Communist-ruled East Berlin -- famed for their fashionable cafes, lively clubs and central locations. But investors are also increasingly shopping around in districts in western Berlin such as Zehlendorf and Steglitz and other outlying neighbourhoods, experts say.
In recent years, not only private homebuyershave been flocking to Berlin but also increasingly private equity funds, such as New York-based Cerberus Capital Management and Goldman Sachs Group's Whitehall investment fund. In 2004, the two together bought 65,700 units of Berlin's public housing for 2.1 billion euros.
In 2006, other big investors included Swedish insurance company Akelius and GE Real Estate.
"Today foreign investors aren't just looking for high yields and quick profits but are more interested in sustainability with a long-term commitment of 10 to 15 years," Schick said, adding that Berlin's home-ownership rate of just 13 percent also meant that the market still had potential to grow.
Experts point out that foreign investors are also emboldened by signs of an overall economic revival in Germany as rising consumer confidence drives demand for housing. The country's economy is expected to increase by 2.5 percent this year, unemployment fell to the lowest in four years in November and business confidence surged to a 15-month high.
Most agree that Berlin's present property boom is here to stay as opposed to the upswing of the 1990s, which was marked by a spectacular crash when a state-owned bank had to be bailed out by the city as a result of failed real-estate investments.
"In the long-term, Berlin property investments will turn out to be very positive," Schick said.
"We're expecting them to reach a new record in 2007."
by Sonia Phalnikar
Mittwoch, 3. Januar 2007
Letter from Berlin: Boom Time for Revamped Economy
The German economy, written off in the last five years as fat, lazy and condemned to long-term decline, is bouncing back thanks to corporate cost-cutting, surging demand for its cars and machinery and the reforms of former Chancellor Gerhard Schröder.
By David Crossland in Berlin
DPA
Shoppers crowded into the new Karstadt department store in Leipzig ahead of Christmas. Chancellor Angela Merkel, who declared in June that Germany was a "basket case" in need of a radical restructuring, must be eating her words. Seven months on, the world's third-largest economy behind the United States and Japan is powering ahead as fast-growing economies in eastern Europe and Asia clamour for just the kind of goods Germany specializes in -- autos, industrial equipment and chemicals.
The "sick man of Europe" tag that stuck to Germany for half a decade after 2000 has disappeared. Germany is now regarded as the most competitive economy in the 13-nation euro single currency area, according to a survey of 1,175 European top executives published by business daily Handelsblatt this week.
Its perceived competitiveness even matches that of the United Kingdom, long cited as a model for Europe after the radical privatization and welfare cutbacks imposed by Margaret Thatcher in the 1980s.
The speed of the recovery has surprised the government which in the spring was predicting growth of 1.6 percent this year -- it has since revised that up to 2.5 percent. Until a few months ago, some economists were warning that the €25 billion in tax hikes coming into force in 2007 could choke off the upturn.
They too have changed their minds. After an expected dip to below 2 percent in 2007, growth is widely expected to pick up again in 2008.
The upturn was evident during the buoyant Christmas shopping season which delighted retailers, even though part of their higher sales was attributed to advance purchases to avoid the three-point hike in the VAT (sales tax) to 19 percent at the start of 2007.
A stream of good news has washed away the gloom and self-doubt which prompted former German President Johannes Rau to declare in 2004 that the country was in a state of "collective depression."
Southern German toy manufacturer Playmobil ran extra shifts but still couldn't keep up with Christmas demand for its biggest seller, a €120 hospital. December saw MTU Aero Engines win a €110 million contract to supply engines to China. And Siemens together with IBM clinched a €7.1 billion deal to modernize the entire IT network of the German army.
Figures out on Wednesday showed that unemployment, Germany's biggest headache for over a decade, fell by a seasonally adjusted 108,000 in December, the ninth consecutive monthly decline, to 4.115 million or 9.8 percent of the workforce.
"This appears to be a sustained upturn," Gernot Nerb, chief economist at the Munich-based Ifo economic research institute, told SPIEGEL ONLINE. "Germany has become more competitive in recent years, unit labor costs have fallen here while they've increased in rival economies such as Italy."
"It's primarily been due to painful restructuring by companies, but the government has done things too," said Nerb. Top companies such as industrial group Siemens or Volkswagen have been outsourcing production to lower-cost countries in eastern Europe and have pushed through cost-cutting deals with their employees in Germany. In many cases workers have been agreeing to work longer hours for lower pay to avoid threatened plant closures.
Ifo expects GDP growth to slow to 1.9 percent in 2007 from a projected 2.5 percent in 2006, and sees it accelerating back to 2.3 percent in 2008. The DIW economic institute projects 1.7 percent growth in 2007.
Jobless benefit cuts and tougher rules for the long-term unemployed implemented in 2003 and 2004 proved so unpopular that they effectively brought down former Chancellor Gerhard Schröder, defeated in a 2005 general election he called early after a string of regional election routs.
But to Merkel's delight, they now seem to be having an effect. "People are under much more pressure to find work now," said Lothar Hessler, an economist at HSBC Trinkaus. "Germany makes just the kind of investment goods that are in strong demand in growth markets like Asia," said Hessler, who said he saw no major risks to the economy in 2007.
Even the slowdown in the US economy, which sucks in 20 percent of German auto exports, is expected to be so soft and temporary that it won't do huge harm, say economists.
With everything looking hunky dory, powerful voices in the government seem tempted to spare the country further reforms. Kurt Beck, the leader of the center-left Social Democrat party which shares power with Merkel's conservatives, said the government's current program of measures had taken Germans to "the limit of what they can take."
While Merkel responded by stressing that her government would push forward with further reforms, Beck's comments were widely interpreted as a signal that the grand coalition isn't going to venture far beyond the health service cutbacks, tax and labor market reforms it has decided over the last year.
The problem is that there's so much still to do. Germany's rate of long-term unemployed people at 5 percent in 2005 was among the highest in the European Union. Few of them are qualified for the thousands of vacancies for skilled jobs in top industries. Industrial firms reported in December that they had vacancies for more than 20,000 engineers.
Meanwhile, eastern Germany continues to fall further behind the far more prosperous west. And red tape still represents a major obstacle to business start-ups. Examples of bureaucratic folly abound, such as the building firm that was almost shut down because its ceiling was two centimeters too low, or the photographer who was told to install a window in his darkroom so that his staff had access to natural light.
And despite the recovery, Germany can't yet be described as an engine of growth for the continent, said Ifo's Nerb. "Germany remains very strongly reliant on its exports. It won't be a real engine of growth until its domestic demand really takes off, which would suck in imports from elsewhere in Europe."
By David Crossland in Berlin
DPA
Shoppers crowded into the new Karstadt department store in Leipzig ahead of Christmas. Chancellor Angela Merkel, who declared in June that Germany was a "basket case" in need of a radical restructuring, must be eating her words. Seven months on, the world's third-largest economy behind the United States and Japan is powering ahead as fast-growing economies in eastern Europe and Asia clamour for just the kind of goods Germany specializes in -- autos, industrial equipment and chemicals.
The "sick man of Europe" tag that stuck to Germany for half a decade after 2000 has disappeared. Germany is now regarded as the most competitive economy in the 13-nation euro single currency area, according to a survey of 1,175 European top executives published by business daily Handelsblatt this week.
Its perceived competitiveness even matches that of the United Kingdom, long cited as a model for Europe after the radical privatization and welfare cutbacks imposed by Margaret Thatcher in the 1980s.
The speed of the recovery has surprised the government which in the spring was predicting growth of 1.6 percent this year -- it has since revised that up to 2.5 percent. Until a few months ago, some economists were warning that the €25 billion in tax hikes coming into force in 2007 could choke off the upturn.
They too have changed their minds. After an expected dip to below 2 percent in 2007, growth is widely expected to pick up again in 2008.
The upturn was evident during the buoyant Christmas shopping season which delighted retailers, even though part of their higher sales was attributed to advance purchases to avoid the three-point hike in the VAT (sales tax) to 19 percent at the start of 2007.
A stream of good news has washed away the gloom and self-doubt which prompted former German President Johannes Rau to declare in 2004 that the country was in a state of "collective depression."
Southern German toy manufacturer Playmobil ran extra shifts but still couldn't keep up with Christmas demand for its biggest seller, a €120 hospital. December saw MTU Aero Engines win a €110 million contract to supply engines to China. And Siemens together with IBM clinched a €7.1 billion deal to modernize the entire IT network of the German army.
Figures out on Wednesday showed that unemployment, Germany's biggest headache for over a decade, fell by a seasonally adjusted 108,000 in December, the ninth consecutive monthly decline, to 4.115 million or 9.8 percent of the workforce.
"This appears to be a sustained upturn," Gernot Nerb, chief economist at the Munich-based Ifo economic research institute, told SPIEGEL ONLINE. "Germany has become more competitive in recent years, unit labor costs have fallen here while they've increased in rival economies such as Italy."
"It's primarily been due to painful restructuring by companies, but the government has done things too," said Nerb. Top companies such as industrial group Siemens or Volkswagen have been outsourcing production to lower-cost countries in eastern Europe and have pushed through cost-cutting deals with their employees in Germany. In many cases workers have been agreeing to work longer hours for lower pay to avoid threatened plant closures.
Ifo expects GDP growth to slow to 1.9 percent in 2007 from a projected 2.5 percent in 2006, and sees it accelerating back to 2.3 percent in 2008. The DIW economic institute projects 1.7 percent growth in 2007.
Jobless benefit cuts and tougher rules for the long-term unemployed implemented in 2003 and 2004 proved so unpopular that they effectively brought down former Chancellor Gerhard Schröder, defeated in a 2005 general election he called early after a string of regional election routs.
But to Merkel's delight, they now seem to be having an effect. "People are under much more pressure to find work now," said Lothar Hessler, an economist at HSBC Trinkaus. "Germany makes just the kind of investment goods that are in strong demand in growth markets like Asia," said Hessler, who said he saw no major risks to the economy in 2007.
Even the slowdown in the US economy, which sucks in 20 percent of German auto exports, is expected to be so soft and temporary that it won't do huge harm, say economists.
With everything looking hunky dory, powerful voices in the government seem tempted to spare the country further reforms. Kurt Beck, the leader of the center-left Social Democrat party which shares power with Merkel's conservatives, said the government's current program of measures had taken Germans to "the limit of what they can take."
While Merkel responded by stressing that her government would push forward with further reforms, Beck's comments were widely interpreted as a signal that the grand coalition isn't going to venture far beyond the health service cutbacks, tax and labor market reforms it has decided over the last year.
The problem is that there's so much still to do. Germany's rate of long-term unemployed people at 5 percent in 2005 was among the highest in the European Union. Few of them are qualified for the thousands of vacancies for skilled jobs in top industries. Industrial firms reported in December that they had vacancies for more than 20,000 engineers.
Meanwhile, eastern Germany continues to fall further behind the far more prosperous west. And red tape still represents a major obstacle to business start-ups. Examples of bureaucratic folly abound, such as the building firm that was almost shut down because its ceiling was two centimeters too low, or the photographer who was told to install a window in his darkroom so that his staff had access to natural light.
And despite the recovery, Germany can't yet be described as an engine of growth for the continent, said Ifo's Nerb. "Germany remains very strongly reliant on its exports. It won't be a real engine of growth until its domestic demand really takes off, which would suck in imports from elsewhere in Europe."
Dienstag, 2. Januar 2007
Investors Bet on German Property Boom
Investment in German commercial property is at a record high, boosted by the flood of foreign investors who are betting that the recovery in Europe's largest economy will at last trigger rising demand for offices and shops.
The volume of German commercial property transactions more than doubled to € 47,45bn ($59.8bn) last year from 2005, according to figures by Jones Lang Lasalle, the property consultant and investor. Activity is at an all-time high and foreign investors account for 79 per cent of the deal volume.
"We have seen extreme inflows of money in the German property market, mostly from the US," said Wolfhard Leichnitz, chief executive of IVG Immobilien.
"The big question now is when we will see fundamentals catching up with expectations," said Christian Ulbrich, managing director at Jones Lang LaSalle in Frankfurt. Mr Ulbrich expects the combination of economic growth and lower supply of offices to drive rents up. JLL forecasts average rent in the big five cities to rise between 1.8 and 4.6 per cent a year until 2009.
The introduction of real estate investment trusts in Germany this year is expected to boost investor interest in property assets further. Mr Leichnitz said IVG was considering whether to turn the company into a Reit.
source: FINANCIAL TIMES
The volume of German commercial property transactions more than doubled to € 47,45bn ($59.8bn) last year from 2005, according to figures by Jones Lang Lasalle, the property consultant and investor. Activity is at an all-time high and foreign investors account for 79 per cent of the deal volume.
"We have seen extreme inflows of money in the German property market, mostly from the US," said Wolfhard Leichnitz, chief executive of IVG Immobilien.
"The big question now is when we will see fundamentals catching up with expectations," said Christian Ulbrich, managing director at Jones Lang LaSalle in Frankfurt. Mr Ulbrich expects the combination of economic growth and lower supply of offices to drive rents up. JLL forecasts average rent in the big five cities to rise between 1.8 and 4.6 per cent a year until 2009.
The introduction of real estate investment trusts in Germany this year is expected to boost investor interest in property assets further. Mr Leichnitz said IVG was considering whether to turn the company into a Reit.
source: FINANCIAL TIMES
Mittwoch, 27. Dezember 2006
Berlin realty finally waking up
Foreigners enter the market after 8 years of price declines
By Patrick Donahue Bloomberg News
Wednesday, December 27, 2006
BERLIN: Yngve Fredheim, a 60-year- old civil engineer from Norway, bought an apartment in the Prenzlauer Berg district of Berlin last year for €300,000, or about 60 percent less than a comparable apartment back home in Oslo.
He is among a wave of foreign buyers lured by some of the lowest property prices in Europe and signs of an economic revival in Germany. Real estate pages of British newspapers, including The Times and The Telegraph, have labeled Berlin a good market for buying a second home.
"It's really cheap, and it's one of the best locations in Berlin," Fredheim said of his four-room residence, which measures 112 square meters, or 1,200 square feet, and has been renovated for the first time since the reign of Kaiser Wilhelm II. "It's a metropolis. It has something similar to Paris and London, so if the Germans get the economy going, it'll be a good investment."
Berlin, a city of 3.4 million people, is an anomaly among European capitals: It has the country's biggest population but is not the financial or industrial center. After hopes of becoming the hub for European trade and politics after the collapse of the Berlin Wall 17 years ago were not realized, residential real estate prices dropped every year from 1996 to 2004. Real estate values in London climbed 80 percent during that time.
The tide may be turning. A total of €6.33 billion, or $8.36 billion, was spent on Berlin properties in the first nine months of 2006, up from €2.95 billion a year earlier, according to the local government's Web site. By the end of the year, the figure may reach a record of more than €10.8 billion, the newspaper Tagesspiegel reported last week, citing a member of the government's survey board.
One destination for homebuyers is the eastern neighborhood of Prenzlauer Berg -- prized for its leafy, cobbled streets, trendy cafés and proximity to the city center. Apartments cost about €2,500 to €3,000 a square meter, 20 percent to 25 percent of London prices, said Wolf-Dieter Lahmann, director of the real estate agency BIST Immobilien.
Other districts where foreigners are shopping include Köpenick, one of the most prosperous in the eastern part of the city, and the western areas of Wilmersdorf, Zehlendorf and Steglitz.
"Last year it really took off," said Lahmann, whose agency concentrates on Prenzlauer Berg. About 25 percent of its sales are to non-Germans --mostly Americans, Britons, Italians, Irish, Scandinavians and Greeks.
Many of the investors have jobs that bring them to Berlin regularly and want to avoid staying in hotels, Lahmann said. Others buy apartments for children who are studying at Berlin universities. Still others are moving to the German capital.
Quick profits may not be on the horizon, though. Lahmann said that investing in Berlin real estate required a 10- to 20-year commitment.
Tobias Just of Deutsche Bank said: "In the long term, Berlin is very positive because it has a good infrastructure. It's not as much so in the midterm. In the short term, you'd have to think twice about it."
For foreign investors who rent out their apartments, the current prices may bring higher returns.
Berlin landlords are able to charge annual rents that yield 6.5 percent to 7 percent of the purchase price, said Frank Schollenberger of Jones Lang LaSalle, a realty agency based in Chicago. Yields in London and Dublin are half that, he said.
"You couldn't even imagine such a thing in London," Schollenberger said.
The German economy is also helping, as rising consumer confidence drives demand for housing. Gross domestic product is expected to increase 2.3 percent this year, the strongest result since 2000. Unemployment fell in November to the lowest level in four years, while business confidence surged to match a 15-year high.
Private equity funds are interested in Berlin real estate. Cerberus Capital Management and Goldman Sachs's Whitehall investment fund bought 65,700 units of public housing in the city in 2004, mostly in lower-rent districts, for €2.1 billion, an early bet on climbing prices.
Such purchases have started to affect prices, according to David Milleker of Allianz Dresdner Economic Research. He said the trend would continue nationwide.
Because of the stagnant prices, he noted, rental yields are up 2 percent since 1995. In Britain, yields are 40 percent of their 1995 level, Milleker said.
"The appearance of big buyers from abroad can thus certainly be seen as tending to have a positive impact on price developments," Milleker wrote in a report.
By Patrick Donahue Bloomberg News
Wednesday, December 27, 2006
BERLIN: Yngve Fredheim, a 60-year- old civil engineer from Norway, bought an apartment in the Prenzlauer Berg district of Berlin last year for €300,000, or about 60 percent less than a comparable apartment back home in Oslo.
He is among a wave of foreign buyers lured by some of the lowest property prices in Europe and signs of an economic revival in Germany. Real estate pages of British newspapers, including The Times and The Telegraph, have labeled Berlin a good market for buying a second home.
"It's really cheap, and it's one of the best locations in Berlin," Fredheim said of his four-room residence, which measures 112 square meters, or 1,200 square feet, and has been renovated for the first time since the reign of Kaiser Wilhelm II. "It's a metropolis. It has something similar to Paris and London, so if the Germans get the economy going, it'll be a good investment."
Berlin, a city of 3.4 million people, is an anomaly among European capitals: It has the country's biggest population but is not the financial or industrial center. After hopes of becoming the hub for European trade and politics after the collapse of the Berlin Wall 17 years ago were not realized, residential real estate prices dropped every year from 1996 to 2004. Real estate values in London climbed 80 percent during that time.
The tide may be turning. A total of €6.33 billion, or $8.36 billion, was spent on Berlin properties in the first nine months of 2006, up from €2.95 billion a year earlier, according to the local government's Web site. By the end of the year, the figure may reach a record of more than €10.8 billion, the newspaper Tagesspiegel reported last week, citing a member of the government's survey board.
One destination for homebuyers is the eastern neighborhood of Prenzlauer Berg -- prized for its leafy, cobbled streets, trendy cafés and proximity to the city center. Apartments cost about €2,500 to €3,000 a square meter, 20 percent to 25 percent of London prices, said Wolf-Dieter Lahmann, director of the real estate agency BIST Immobilien.
Other districts where foreigners are shopping include Köpenick, one of the most prosperous in the eastern part of the city, and the western areas of Wilmersdorf, Zehlendorf and Steglitz.
"Last year it really took off," said Lahmann, whose agency concentrates on Prenzlauer Berg. About 25 percent of its sales are to non-Germans --mostly Americans, Britons, Italians, Irish, Scandinavians and Greeks.
Many of the investors have jobs that bring them to Berlin regularly and want to avoid staying in hotels, Lahmann said. Others buy apartments for children who are studying at Berlin universities. Still others are moving to the German capital.
Quick profits may not be on the horizon, though. Lahmann said that investing in Berlin real estate required a 10- to 20-year commitment.
Tobias Just of Deutsche Bank said: "In the long term, Berlin is very positive because it has a good infrastructure. It's not as much so in the midterm. In the short term, you'd have to think twice about it."
For foreign investors who rent out their apartments, the current prices may bring higher returns.
Berlin landlords are able to charge annual rents that yield 6.5 percent to 7 percent of the purchase price, said Frank Schollenberger of Jones Lang LaSalle, a realty agency based in Chicago. Yields in London and Dublin are half that, he said.
"You couldn't even imagine such a thing in London," Schollenberger said.
The German economy is also helping, as rising consumer confidence drives demand for housing. Gross domestic product is expected to increase 2.3 percent this year, the strongest result since 2000. Unemployment fell in November to the lowest level in four years, while business confidence surged to match a 15-year high.
Private equity funds are interested in Berlin real estate. Cerberus Capital Management and Goldman Sachs's Whitehall investment fund bought 65,700 units of public housing in the city in 2004, mostly in lower-rent districts, for €2.1 billion, an early bet on climbing prices.
Such purchases have started to affect prices, according to David Milleker of Allianz Dresdner Economic Research. He said the trend would continue nationwide.
Because of the stagnant prices, he noted, rental yields are up 2 percent since 1995. In Britain, yields are 40 percent of their 1995 level, Milleker said.
"The appearance of big buyers from abroad can thus certainly be seen as tending to have a positive impact on price developments," Milleker wrote in a report.
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