Diamona & Harnisch - Life's Finest Values
Menu
Blog | 30. March 2017

DIAMONA & HARNISCH’s BLOG

TODAY’S SMART HOME IS TOMORROW’S STANDARD HOME

The electronics company Schneider Electric and the Berlin startup KIWI.KI had a great idea – why not combine our products? No sooner said than done. They have combined KIWI.KI’s keyless door technology with Schneider Electric’s building communication systems and have made the lives of property managers everywhere a great deal easier. Access rights can now be changed far more easily when tenants move in or out. The significant costs incurred when someone loses their keys are also a thing of the past. And service providers who need access to the property, such as delivery companies, garbage companies, suppliers, meter readers and workmen, no longer need to carry big bunches of keys around with them as they can now be granted access to the building remotely. Such systems are set to adopted widely in Berlin and a large number of housing companies have already implemented the technology – one percent of the front doors in Berlin will soon open without a key (says KIWI.KI). And the figure will only grow.

SMART HOME = INTUITIVE HOME

Apps for tenants and virtual notice boards in apartment buildings have become commonplace. Complaints, suggestions, notification of defects – all of these can be communicated to property managers via apps. When tenants need something repaired, their message goes directly to their landlord’s emergency hotline day or night, and tenants can even attach two photos to their message, and suggest two potential appointments for a workman to come and carry out the repairs. The benefits: There is often no need for any advance inspections and it is far easier to arrange appointments.
All of these new possibilities rely on the smartphone. Nowadays, nothing is possible without our multi-purpose devices, and, at least in theory, they make anything and everything possible. Unfortunately, technical innovations are not yet always the order of the day in our day-to-day lives. Many people still dismiss such developments as pipe dreams, and some are even suspicious or dismayed at the fast pace of change. On top of this, there are concerns that too much private data could end up in the wrong hands. This is one of the major reasons why Smart Homes are still the exception, rather than the rule. Intelligently regulated heating, turning the washing machine on, keeping track of what’s in the fridge or deciding whether a light should be switched off in order to save energy – no problem for the smartphone-controlled, intuitive smart home.

MORE COMFORT, LESS RISK

Smart Home systems that efficiently network people and technology can actually protect us and our homes from danger. If a smouldering fire breaks out, an intelligent smoke detector can send an automatic warning to the user’s smartphone. No one will ever have to go on vacation again worrying about whether they remembered to switch off their iron or coffee machine. Just one click and we’ll be able to check up on things at home and, if necessary, switch off an individual plug socket remotely. What might seem alien to many tenants, landlords and homeowners today will become the standard of tomorrow. Home automation will ensure that our homes become more comfortable and – despite a number of concerns – safer.
Only half of those who took part in a recent survey carried out by Bitkom, Germany’s digital association, could explain what a “Smart Home” is – a network of household technologies, appliances and consumer electronics. The survey found that, among those who are already taking advantage of Smart Home technologies, enhanced security is the number one factor. Approximately 61 percent of users have installed intelligent technologies to protect their homes. The survey also showed that Smart Home systems are being used in combination with mechanical security systems to help scare intruders away or secure their subsequent conviction.
... See MoreSee Less

2 weeks ago  ·  

View on Facebook

BERLIN: CAPITAL OF ELECTROMOBILITY

Every now and then a red e-scooter zips down a narrow street, whizzing past a car-sharing company’s electric car as it charges in an on-street parking bay outside a classic, Wilhelminian Berlin apartment building. At the same time a teacher exits the building opposite and swings his legs over the crossbar of an electric bike, setting off on his four-kilometer ride to school through the city’s morning rush hour. Welcome to Berlin – Germany’s biggest testing ground for electromobility.

CAR-SHARING, E-SCOOTERS, ELECTRIC BIKES – BERLIN IS TURNING THE VOLUME DOWN

No other region in Germany has as many low-noise electric vehicles on its streets as the Berlin-Brandenburg metropolitan region. Roughly 3,500 electric vehicles are in operation every single day, and by 2025 the Berlin Agency for Electromobility predicts that the number of electric vehicles registered in the city will increase by a further 30 percent. And it’s the city’s businesses that are taking the lead in the use of battery-powered vehicles – they own and operate 75 percent of the electric vehicles on Berlin’s roads. The local water company, for example, has 21 electric vehicles – almost ten percent of its entire fleet. And the car-sharing company, Multicity, has an impressive 250 Citroen C-Zeros, all powered by renewable energy. Then there’s the joint venture between Sixt DE and BMW, which has now added BMW’s I3 electric model to its DriveNow fleet. The I3 is the Munich car company’s first ever electric vehicle. Opel’s response to BMW, the Ampera-e, is coming this year, and Mercedes has launched a new model, based on its mid-sized SUV GLC, powered by a combination of battery-power and hydrogen.

Other forms of battery-powered transportation are also gaining in popularity. The e-scooter company Emio in Schöneberg has 150 bright red scooters spread around the city’s commuter rail stations, all of which can be located and rented via smartphone app. The major benefit for users – at 19 cents per kilometer, the scooters are even cheaper than car-sharing. Electric power is also playing an increasingly important role in the logistics sector, especially when it comes to the so-called last mile, the final leg of a route to a consumer’s delivery address. In order to reach customers from its distribution center on Kurfürstendamm, the US retail giant Amazon is increasingly dispatching couriers on electric cargo bikes. Berlin’s Senate is convinced that electric bikes have a great future in the consumer sector, and points to the large number of commuters already using them to cover the distances between home and work and the city’s rail stations. Right now, the Berlin metropolitan region proudly boasts between 80,000 and 100,000 e-bikes across the region.

So what are Berlin’s public transport companies doing to improve the environment? The BVG, which runs the city’s subway, bus and tram lines, has been testing Solaris Urbino 12 electric buses on its 204 bus route between Zoologischer Garten and Südkreuz for the past 12 months. The buses operate with a cable-free, inductive charging system. And this is just one of the many projects in Berlin-Brandenburg that are currently being funded by the International Electromobility Showcase program. Federal and state governments, along with businesses, have pumped a great deal money into the program since 2013 – and total funding has now reached €76 million.

BERLIN’S ROAD TO A GREEN FUTURE

Drivers who decide to buy an electric car are not only making a significant contribution to the environmental future of their city – they are also securing long-term savings for their households’ budgets. The federal government currently subsidizes the purchase of an electric car to the tune of EUR 4,000, and offers additional financial support every time a vehicle is charged. Cars can easily be powered by renewable energy, at a cost of less then €4.00 per 100 kilometers, according to calculations published by the Federal Ministry of the Environment. Berlin’s Senate is also digging deep into its pockets as it promotes electromobility. The city’s politicians have approved €6.5 million of funding to set up 1,100 new charging stations, adding to the 636 that are already available across Berlin. For drivers in a hurry, there are even seven charging stations in Berlin that offer “fast charging.” They can charge their cars to 80 percent capacity In just 30 minutes – more than enough power for a trip to the shops.
... See MoreSee Less

4 weeks ago  ·  

View on Facebook

STRONG BUSINESS LOCATION, ATTRACTIVE METROPOLIS

Berlin is an incredibly popular tourist destination – the number of holidaymakers is constantly on the rise and has now reached twelve million per year. More than ever before, Germany’s capital is an attractive destination for international guests – around 4.6 million overseas visitors came to the city last year to gain firsthand experience of Berlin’s vibrancy and color and its multi-facetted cultural offerings. In addition to these tourists, more and more people are also coming to Berlin to make the city their new home. The population of Germany’s largest city has risen to 3.52 million – roughly 150,000 more than just five years ago.

BERLIN IS GERMANY’S OFFICE CAPITAL

It’s not only a great place to live, there are more and more jobs in Berlin too. The city’s economy has been delivering strong growth for a number of years now. For the fourth quarter in a row, the Spree metropolis defended its crown as Germany’s most popular office market. Neither Munich, nor Hamburg or Frankfurt am Main were able to wrestle the title from Berlin. BNP Paribas Real Estate recently announced that a total of just under 840,000 square meters of office space was let in the city in 2016. Not even the Bavarian capital, Munich, managed to match this impressive total, and had to settle for a full-year total of less than 800,000 square meters; Frankfurt and Hamburg didn’t even manage to top 600,000 square meters.

The strong demand for commercial property reflects the growing importance of Berlin as an economic motor. According to Colliers International, transactions involving commercial real estate in Berlin totaled EUR 4.9 billion in 2016. This placed Berlin third in the national rankings, trailing Munich (EUR 6.86 billion) and hot on the heels of Hamburg (EUR 4.91 billion).

Berlin’s ascension has been underway for years – more tourists, more inhabitants, more businesses. The amount of available on Berlin’s office market has become steadily scarcer. In comparison with the previous year, the volume of office space available at short notice fell by almost one third. According to BNP, the office vacancy rate has dropped to just 2.8 percent. The most drastic declines in vacancies were registered in Berlin’s central districts. This is where large numbers of people want to combine both living and working. Offices, apartments, schools, bars, restaurants and shops – Berliners love their neighborhoods because they provide every convenience of a booming metropolis within easy reach.

RESIDENTIAL REAL ESTATE ON THE SPREE IS A SAFE INVESTMENT

As a result, the housing market is becoming ever tighter. A recent analysis from Aengevelt estimated that roughly 248,000 new residential units need to be built by 2030. This means that 17,500 new apartments must be developed every single year. Unfortunately, this total has only ever been achieved in one year, namely 2016. Over the last ten years, an average of 5,000 new apartments have come to market. This is nowhere near enough to meet the rapid growth in demand. The latest population forecasts from Berlin’s Senate Department for Urban Development and the Environment predict that the city’s population will increase to four million by 2030, excluding refugees. Housing will become an even more scarce commodity. Anyone who buys an apartment in Berlin right now will certainly be sitting pretty – especially given the historically low interest rates.

Buying an apartment is well worth it, especially as rental prices will continue to increase. Berliners are already paying seven to eight per cent more in rent each time they move, the local Tenants’ Association has reported. And that’s not set to change this year – the shortage of available housing will see to that. As a result, citizens and business representatives are demanding more and quicker building permits, increased housing density in central urban districts, and additional investment in IT infrastructure to support the city’s businesses. Christian Wiesenhütter, boss of Berlin’s Chamber of Commerce, says that Berlin is, “Number one for job growth,” not least because of its booming IT sector, and that “The chances of finding a job in Germany’s capital city are good and demand for skilled workers is higher than ever before.” And long may it continue.
... See MoreSee Less

1 month ago  ·  

View on Facebook

GOING GLOBAL: FOREIGN INVESTORS TARGET BERLIN’S PREMIUM REAL ESTATE

Whether the new residential quarter at Leipziger Platz, the Palais Theising at the Brandenburg Gate or the exceptional project "Sapphire" on Chausseestraße – Berlin can also do luxury. In the past few years, more and more apartments have been created for more sophisticated buyers. Interest in exclusive objects is growing steadily. In the first six months of 2016 alone, the demand for exceptional properties has risen by a whopping 14 percent, according to an evaluation by the portal LuxuryEstate.com. This makes Berlin Germany's largest market for premium residential properties (evaluation of the online portal LuxuryEstate.com).

CAPITAL GAINS VS. INITIAL YIELDS

Especially foreign investors have discovered Berlin for themselves. They come from Turkey, the Arab Emirates and the USA. The share of US-American buyers in the first half-year of 2016 rose by eleven percent compared to the previous year’s period. In contrast to many institutional investors, these private buyers have long since bid farewell to excessive yield expectations, and now accept three percent instead of five. There are others things that are more important than the initial return: the prospect of long-term capital gains, security, and a stable economic environment in times of volatile international markets. And that is exactly what Berlin premium properties offer.

LONDON, PARIS, NEW YORK − AND BERLIN

Some premium residential properties sell for more than three times the average market price, the brokerages report. At the top end of the market, buyers were already paying up to EUR 19,000 per square meter as early as 2015. The most expensive apartment changed owners for |EUR 4.3 million. In the "Sapphire" development from the US star architect Daniel Libeskind, which was completed in 2016, the recommended price for the most luxurious apartments started at EUR 15,000 per square meter. Market observers are therefore certain: Berlin has long played in the top league, alongside London, Paris and New York – without having reached the same price level. In these metropolises, buyers sometimes pay three times as much for an equivalent property. Advantage Berlin: On the Spree, there is still much potential for value growth.

In addition to the district of Berlin-Mitte, sophisticated buyers have been able to find what they are looking for in Charlottenburg-Wilmersdorf and Friedrichshain-Kreuzberg. For a luxury object with future-oriented prospects simply everything must be right. 1A-location, central and yet quiet, maybe a park view, modern architecture, generous room sizes, high ceilings, quality finishes, chic details, such as a dressing rooms, underground parking and an elevator directly into the apartment.
... See MoreSee Less

2 months ago  ·  

View on Facebook

BERLIN’S SOUTHWEST – IN THE MIDST OF NATURE, IN THE MIDST OF THE CITY

Steglitz, Zehlendorf, Dahlem – The southwest of Berlin is among the top locations in the city. Upscale flair, waterways and green areas, chic homes and stylish villas on park-like grounds dominate this part of Berlin. And yet the hustle and bustle of the city is only ten minutes away by subway, which makes it an expensive place to live. While rents and residential property prices have risen dramatically, especially in Berlin-Mitte, the city’s southwest districts are now catching up. Rents in good locations range between EUR 14 and 16/sqm per month; detached and semi-detached houses sold for an average of EUR 575,000 in 2016. Even in less desirable locations, such as near large traffic intersections, prices of almost EUR 400,000 are to be expected, according to the IVD real estate association. Thus Steglitz-Zehlendorf is Berlin’s second most expensive district after Charlottenburg-Wilmersdorf.

The popularity boom in the southwest of Berlin is mainly due to the fact that more and more condominiums are being built here. Where aging detached and semi-detached houses or single villas once dominated the cityscape, today, the district’s development land is used to create high-quality housing to accommodate the growing number of inhabitants. The consequence: A noticeable upsurge in prices. In Dahlem, the square meter price reached EUR 6,200 last year. In comparison, an average of EUR 3,200/sqm is the current norm in Berlin.

CHINESE INVESTORS ARE ATTRACTED TO DAHLEM, STEGLITZ AND ZEHLENDORF

This development is bringing more and more investors on board. And, for some time now, they have not just been coming from Berlin or the rest of Germany. Asian investors in particular have discovered the capital for themselves, Chinese investors are the second largest buyers of residential property after the Americans and the Russians. In October alone, the largest Chinese sovereign wealth fund invested EUR 1.2 billion in Germany – 40 per cent of the 16,000 apartments are located in the metropolis on the Spree.

Private Chinese investors are also flocking to Berlin, which is regarded as “Europe’s new capital of investment” in China (Info: China correspondent for German newspaper, taz). Transparent structures, economic stability and a favorable exchange rate have earned Berlin this title over the past few years. With average purchase prices between EUR 2,500 and 4,000, property is also affordable by Chinese standards. In Peking a condominium costs more than twice as much. Since Chinese people are allowed to have only one home in their home country, several families sometimes pool their resources to raise enough money to purchase larger properties, market observers report.

LARGE APARTMENTS FOR RENT

Above all, Chinese private investors appreciate large apartments, which in most cases they do not use themselves, but prefer to rent out. On average, they will pay around EUR 500,000 for such a property. In their search for suitable luxury properties, they are focussing ever more on Berlin’s southwest. Dahlem is especially popular because it has the district’s largest apartments, averaging 105 square meters.
... See MoreSee Less

2 months ago  ·  

View on Facebook

GROWING NUMBERS OF FOREIGN INVESTORS ARE BUYING RESIDENTIAL REAL ESTATE IN BERLIN

Berlin has become one of the most attractive investment destinations in all of Germany. And it has done so in the space of just a few years. Foreign investors have long been casting interested eyes over the city on the Spree. Which is not at all surprising, for things are looking very good in Berlin: The population is growing, the economy is ticking along nicely, and the real estate market is booming. For the coming year, the Berlin Investment Bank (IBB) has forecast that the German capital’s economy will grow by 2.2 percent – which will make this the fourth year of above-average growth in a row. The forecasts for Germany as a whole indicate growth of just around one percent.

BRIGHT PROSPECTS

The IBB’s economic analysts predict that employment will grow at an even faster pace than Berlin’s economy, with 3.2 percent more jobs in the city by the end of this year. (For Germany, jobs are forecast to increase by just 1.5 percent.) Over the last three years, a total of 130,000 new jobs have been created in Berlin; during 2017 the number of jobs subject to full-time jobs could well increase by a further 30,000 to 40,000. This jobs growth is largely being driven by the huge number of new start-ups and young companies who have made Berlin their home. According to a study from the Institute for Strategy Development, start-ups are now the city’s fifth biggest employer – ahead of Siemens, Deutsche Telekom and Daimler. In the first six months of 2016 alone, EUR 957 million of venture capital flooded into the Berlin’s start-up scene.

INTERNATIONAL CAPITAL FLOWS INTO BERLIN

It has been some time since investors discovered Berlin’s real estate markets: During 2016 initial figures indicate that around EUR 6 billion of investment was pumped into commercial real estate in Berlin. By spring 2016, the investment total had already exceeded EUR 2 billion. And 74 percent of these investors were foreign investors – more than in any other major German city. Residential real estate has also risen up international investors’ agendas, which is entirely understandable given the growing demand for housing in Berlin, the natural consequence of the city’s sustained population growth. Investors certainly appreciate the opportunity to combine low investment risks with stable yields.

TOP DOG FOR ONLINE RESIDENTIAL REAL ESTATE LISTINGS

More and more frequently it is the international middle-classes from Asia, the Middle East and the USA who are interested in buying condominiums in Berlin. The highest demand is for upmarket apartments costing EUR 4,000 per square meter and more. Market observers are certain that the United Kingdom’s planned exit from the European Union will drive demand for residential real estate even higher. Private and institutional investors who have previously focused their investments on London are set to step up their activities in Germany. And it goes without saying that Berlin’s real estate market will be one of the biggest winners fro such a shift, especially as the German capital is already top dog when it comes to online real estate listings – which means that foreign buyers who are searching online for residential real estate in Germany are most likely to find what they are looking for in Berlin.
... See MoreSee Less

3 months ago  ·  

View on Facebook

BERLIN’S EVOLVING NEIGHBORHOODS

Like no other city in Germany, Berlin stands for revolution and evolution, and for the juxtaposition of opposites. For a long time these have been an inherent part of the city’s topography – after all, for decades the Spree metropolis was divided into East and West by the Wall. Today, there is not that much left to remind us of this fact. The Wall was torn down, the city’s districts are now growing together, and the last strips of no man’s land in the inner-city are being developed to construct new apartments, which are still in very short supply in Berlin.

OPPORTUNITIES FOR APARTMENT BUYERS

The quarter between Potsdamer Straße, Bülowstraße and Schöneberger Ufer is a perfect example. This is an outstanding downtown location – just a stone’s throw from Potsdamer Platz, Friedrichstraße and Kuʼdamm, and home to large numbers of companies, associations and charitable foundations, and the workplace of thousands of Berliners. Right now, 550 new apartments are being developed, along with countless restaurants, cafés and shops. Many of the new apartments are condominiums and, given their location close to central Berlin, they are of great interest to both owner-occupiers and investors.

CENTRAL LOCATION, SOPHISTICATED AMENITIES

Here, on an undeveloped site at the junction of Kurfürstenstraße and Else-Lasker-Schüler-Straße, “Carré Voltaire” is currently under construction. At a cost of EUR 58 million, 127 exclusive condominiums are being developed, offering a total of 12,000 square meters of living space across eight storeys. In addition, the development includes 200 square meters of commercial space, which has been earmarked for a café and retail boutique, and an underground parking facility with approximately 88 double-width parking spaces, a charging station for electric vehicles and E-Bikes, and storage space for 180 bicycles. The one- to five-room apartments will cost between EUR 4,200 and 7,400 per square meter.

Construction is well underway in many other parts of the neighborhood. In Tiergarten-Süd, on the furniture store car park on the corner of Genthiner and Kurfürstenstraße, 170 apartments and an organic supermarket are being built. At Genthiner Straße 40, 113 apartments and 1,950 square meters of commercial space are being developed in a chic, industrial-loft style. And between Genthiner and Derfflingerstraße, 88 apartments, in combination with space for start-ups and creative companies is planned. The new development has been designed to offer a mix of compact rental units and condominiums. The apartments are available for purchase from EUR 4,500 per square meter.
... See MoreSee Less

3 months ago  ·  

View on Facebook

IN BERLIN, HOME OWNERSHIP IS GETTING MORE EXPENSIVE – AND PRICES ARE RISING FASTER THAN EVER

The German real estate boom continues – and with far-reaching consequences. Prices are rising constantly, especially in major cities such as Berlin. Beyond the most sought-after central districts, the price of development land has now risen to €200 per square metre – an increase of more than 11 percent in comparison with autumn/winter last year. The only cities that have seen land prices accelerate at a faster rate are Frankfurt/Main, Munich and Bremen, as confirmed by the IVD real estate association. The average asking price for a new condominium in Berlin has now climbed to €4,100 per square metre. Older apartments now cost an average of €1,950 per square metre – an increase of 5.41 percent.

One reason that prices continue to rise is the shortage of housing in Germany’s major cities. In Berlin, despite an increase in construction activity, there is still too little housing – and demand is strong thanks to the influx of new Berliners. And it looks as if the situation is not about to change any time soon. The real estate agents’ association, IVD, assumes that inward migration and the shortfall in supply will drive real estate prices 25 percent higher in Berlin over the next five years.

MAKE THE MOST OF THE BOOM ON THE BANKS OF THE SPREE

For buyers and investors there has never been a better time to enter the Berlin real estate market. Above all, condominiums are in high demand and prices have surged as a result. According to a new Postbank study, “House Price Atlas 2016 – Living in the City,” condominium prices have risen by 44 percent over the last 15 years. Given the city’s strong population growth, real estate experts are confident that prices in Berlin will continue to rise.

Would-be buyers shouldn’t wait too long before they take advantage of this situation – otherwise their dream home will be even more expensive. In Dahlem (in the district of Steglitz-Zehlendorf), the square metre price had already climbed to €4,759 in 2015, in Berlin-Mitte buyers had to budget €4,538 per square metre and in Kreuzberg prices had reached €3,420 per square metre. The IVD identifies Spandau and Reinickendorf as offering comparatively low prices. In these two districts a square metre costs between €2,500 and €2,700.

TAKE ADVANTAGE OF LOW INTEREST RATES FOR AFFORDABLE FINANCING

There is another very good reason not to delay a property purchase too much longer: The current low interest rate climate won’t be with us forever. After a number of lenders increased their construction loan interest rates in November, FMH-Finanzberatung forecasts that mortgage interest rates (whether for 5, 10, 15 or 20-year fixed-rate mortgages) are going to climb. It is still the case that developers and buyers with strong credit records can secure ten-year loans at less than one percent interest per annum. And those who are looking for 15-year fixed-rate loans, which are still a good option as long as interest rates remain so low, can find lenders willing to finance their property purchase at interest rates below 1.5 percent – an opportunity that buyers should certainly take advantage of.
... See MoreSee Less

4 months ago  ·  

View on Facebook

MORE AND MORE BERLINERS ARE BUYING APARTMENTS

Berlin has long since been more than just a first-class tourist destination. And once they have experienced the city, a short stay just isn’t enough for a growing number of people. People are moving to the pulsating Spree metropolis from all over, drawn by the city’s trend-setting cultural and entertainment scenes, multi-facetted shopping and eclectic restaurants, all of which mirror Berlin’s well-established internationality. Then there’s the city’s strong employment growth, which is also drawing large numbers of people, above all young people, to the German capital.

So, the fact that space in the city on the banks of the Spree River is at a premium should come as no surprise. According to official forecasts, by 2030, there will be roughly 266,000 more people living in Berlin than there are today. This makes living space extremely valuable. Even today, the supply of housing can hardly satisfy current levels of demand. And rents are still rising rapidly, despite rent controls. This year alone, the IVD real estate federation reports that rents have risen by between 5.5 and 6.7 percent – depending on location.

BERLIN’S HOMEOWNERSHIP RATE IS JUST 15 PERCENT

Given all of these developments, more and more Berliners are seriously considering buying their own apartments. Anyone who can afford it is investing now, before prices increase further. After all, the condominium prices are also rising strongly: Existing condominiums now cost an average of € 2,100 per square metre, roughly 13.5 percent more than in 2015; and newbuild apartments cost an average of € 3,600 per square metre – a year-over-year increase of 12.5 percent. In sought-after neighbourhoods in Berlin-Mitte, Charlottenburg and Friedrichshain, the prices are much higher still. And there’s no end in sight.

But all of this is good news for buyers – both for owner-occupiers, and for investors hoping to make capital gains. In the long-term, owning your own home is cheaper than paying years of rent. Especially as mortgage interest rates are lower than ever: According to data compiled by FMH-Finanzberatung in Frankfurt am Main, banks are currently charging an average of 1.07 percent on a fixed-rate, 10-year mortgage. A 20-year mortgage now costs an average of 1.74 percent (as of 18.10.2016).

CONDOMINIUMS ARE A SECURE INVESTMENT

The same is just as true for buy-to-let investors. As Berlin booms, the city’s chronic housing shortage, especially in central districts, continues to make housing a much sought-after commodity – and a secure investment. Average rents in Charlottenburg-Wilmersdorf have already climbed to € 11.50 per square metre. Berlin-Mitte has the next highest average rent, at € 11.25/sqm. Steglitz-Zehlendorf and Tempelhof-Schöneberg share third place, at € 10.25/sqm. Even tenants in less affluent residential neighbourhoods are paying an average of € 9.50 per square metre.
... See MoreSee Less

4 months ago  ·  

View on Facebook

PRICES FOR BERLIN’S LUXURY APARTMENTS ARE SURGING – AS IS INTEREST FROM INVESTORS

As investment vehicles, luxury apartments are as popular as ever for high net worth individuals (HNWIs) around the world. Within the next decade, almost fifty percent of HNWIs will have made investments in buy-to-let residential property. The most lucrative investment destinations include Vancouver, Sydney, Shanghai, and two German cities. For high-end residential property investments, Berlin ranks just behind Munich. This was revealed by a survey of 400 leading private bankers and investment advisors who work with ultra-high-net-worth (UHNWI) clients, i.e. individuals with assets worth at least US$30 million.

JUST AS COSMOPOLITAN, BUT MORE AFFORDABLE THAN PARIS OR LONDON

The fact that Berlin is attracting so much interest from international investors has a simple, but very good reason: In many of the most popular real estate centers in Europe and North America, property has become scarce and extremely expensive. The last inner-city building lots have been filled, the number of new, luxury developments is in decline, and property prices remain fairly stagnant. All of this has added to the attractiveness of Germany’s capital. Berlin has finally drawn level with London, Paris and New York City in the elite group of world cities, but it still holds one very important card: Berlin’s property prices are just a fraction of the prices found in other major metropolises. In international comparison, the differences are stark. Whereas prices for high-end real estate in Berlin increased by 9.0 percent in 2015, the global average was a paltry 1.8 percent.

SPREE METROPOLIS OFFERS FANTASTIC PRICE GROWTH POTENTIAL

Berlin’s luxury apartments cost an average of €7,000 per square meter; penthouse prices average €10,000. At the top end of the market, buyers paid €19,000 per square meter for premium apartments in the city on the Spree River. These prices are similar to the level found in Hamburg, and double the prices in Cologne. A glance at the prices paid in other major European cities reveals just how affordable Berlin still is. In London or Paris, today’s buyers are paying up to three times as much for luxury apartments.

As a result, many market observers have identified the greatest price growth potentials in Berlin’s “high-end” residential segment – especially as Berlin’s ongoing tourist boom means that the city is becoming more famous every day. Just last year, the city attracted twelve million visitors – a new record. With more than 30 million overnight stays, 2015 was the best year for Berlin’s hoteliers since records began. Almost two-thirds of these were international visitors, with the largest contingent coming from Great Britain. There were also significant rises in the number of visitors from the United States, Italy and the Netherlands.

BERLIN-MITTE IN FOCUS

Traditionally, real estate investors have followed the paths beaten by tourists. After all, it’s not just tourists, but also tenants and buyers who want to be close to the action – preferably with a clear view of the Reichstag or Museum Island, or in close proximity to landmarks such as Potsdamer or Pariser Platz. It’s therefore no surprise that a majority of “high-end” residential developments are concentrated in the district of Berlin-Mitte. Developers have moved beyond mere construction and refurbishment projects; here they are creating the kind of visionary residences that also appeal to sophisticated international buyers – including en suite bathrooms and full-service concierges. So, buyers can now feel just as much at home here in Berlin as they do in London, Paris or New York.
... See MoreSee Less

5 months ago  ·  

View on Facebook

FAMILY, FILM, FREE-TIME – LIFE IN THE CITY IS COLORFUL AND VIBRANT

Berlin is currently trending. The number of inhabitants has been growing for years – 45,000 new residents arrived in 2015 alone. The capital has enormous pull. However, it is not the only city that is following this national trend: the return to urbanity.
Everywhere in the country, people from the periphery are moving into the bigger cities. Where at first young families were escaping to the countryside to raise their children far away from the tumultuous city, now they are returning in growing numbers – particularly to the pulsating city centers. After all, this is where it’s closest to their jobs, day-care centers and shopping. In the evening, cinemas, restaurants or fitness studios are also nearby.

DIVERSE DISTRICTS, VARIED LIVING

Urban living is not just attractive for younger people. Ever more seniors are moving from the countryside to the city or from far-flung districts into the prosperous city center, where they will find a senior-friendly infrastructure. Bus and rail connections, doctors and shopping are just around the corner. Residents can meet up on the ground floor to savor company, coffee and cake.

When it comes to satisfying the varied demands of urban residents, urban planners and real estate developers face enormous challenges. It’s time to rethink the situation. In future, experts will not only need to develop different real estate concepts for different communities; their concepts will also have to accommodate residents in all of life’s various phases – while working with limited space. Everyone appreciates the diversity of inner cities and wants to live at the heart of the action.

SAY GOOD-BYE TO STANDARDIZED APARTMENTS

The result should be city districts where single household apartments can co-exist with large family apartments or senior-friendly residences. The age of the one-size-fits-all apartment is well and truly over. To satisfy all these diverse needs, the housing industry has started employing many strategies, such as joining smaller units to make larger, more comfortable properties, or repurposing vacant office buildings into residential space. In addition, there has been an increase in new construction on brownfield sites and inner-city commercial parks. This is already happening in many places. Completely new districts are conceived with this flexibility in mind.

LIFE IN THE NEIGHBORHOOD: LIVING, WORKING, ENJOYING

Urban living has long blurred the strict lines between work life and home life. Businesses, offices, apartments, restaurants, cultural centers, nurseries and schools are all next to each other and not zoned into separate areas. This tendency can already be seen in many of Berlin’s districts. It matches the ideals of big city dwellers – life and work in healthy balance without time-consuming commutes.

The city of today and tomorrow won’t be a place of anonymity. Ideally, it will offer a combination of diversity and openness. Periodic surveys of city dwellers confirm that urban living for most people means the chance to live in a community. Berlin’s districts, such as Kreuzberg, Wedding or Prenzlauer Berg, are prime examples of the successful mixture of social milieus, cultures and age groups.
... See MoreSee Less

5 months ago  ·  

View on Facebook

NEW STANDARDS IN URBAN DEVELOPMENT ARE BEING SET AT BERLIN’S OSTBAHNHOF

Living, working, leisure – all in one neighborhood. With the end of urban flight, city planners have had to face up to new challenges arising from the growing number of people who are flocking back to city centre districts. Planners need to create new, high quality urban districts; quarters that are more than just business parks or exclusively residential neighborhoods. Right now in Berlin, new standards are being set in the development of just such urban spaces: Between now and Fall 2018, the US-based Anschutz Entertainment Group (AEG) is investing €200 million to transform the area around Ostbahnof into an inner-city entertainment district.

This major construction project includes a 14-screen, 2,500-seat, multiplex cinema, and the “Music Box”, an event arena for up to 4,000 visitors, which will provide the perfect setting for concerts, theater and gala dinners. On top of all this, there will also be a 28-lane bowling center and an extensive range of cafés and restaurants.

CONSTRUCTION BOOM ON FORMER RAILWAY LAND

The new entertainment district encompasses an area of 6,500 square meters and is being developed on the site known affectionately by every Berliner as “Mercedes Platz”. The American company has been hatching its plans for more than 15 years, having bought the railway wasteland near Ostbahnhof in Berlin-Friedrichshain with the intention of transforming it into a vibrant, modern metropolitan district.

The first project launched by the group’s CEO Phil Anschutz in Berlin was the large-scale event arena O2 World, since rebranded as the “Mercedes-Benz-Arena”, which offers 150 sporting attractions and concerts each year and has become a firm fixture in Berlin’s events calendar. The arena has also served as a magnet to draw a large number of other companies to the former railway hub. Daimler is one of the biggest names to be attracted to the area and moved its German headquarters to an adjacent site in 2013. The online retail giant Zalando is also developing its new headquarters nearby, aiming to house a majority of its 3,500 employees in its new offices to the east of the Mercedes sales HQ from 2017.

ENTERTAINMENT DISTRICT À LA “LAS VEGAS”

Just last year, a new “Holiday Inn” opened its doors, providing the district with its first hotel. And two new hotels are on their way: The Anschutz Entertainment Group is creating a total of 380 new hotel rooms – along with a generous amount of open space and attractive water features to create the perfect ambience for visitors to enjoy a relaxing stroll. The water features include a 1,000 sqm field of fountains, which, as well as providing dramatically choreographed water displays has also been designed to function as a children’s water playground. Entering fully into the Las Vegas spirit, the fountain’s columns of water will be illuminated in a variety of spectacular colors to deliver stunning evening aquatic displays, accompanied by advertising on large screens.

The area to the east of the arena is also the site of much activity. Right next to the iconic Warschauer Brücke, Freo Group is also investing €200 million, in this case in a shopping center. The futuristic, five-story “East Side Mall” is due to welcome shoppers from 2018. Across 25,000 square meters, the center will be home to more than 100 retailers, plus cafés, restaurants and leisure facilities – another cornerstone in the district’s evolution into a vibrant, urban quarter. The vision of the AEG CEO Phil Anschutz, that guests can head from one of his company’s entertainment events to a café, bar or restaurant, or stroll back home, or even head to work, is soon to become a reality. By 2020, approximately 20,000 new jobs will have been created – along with new apartments for around 4,000 Berliners.
... See MoreSee Less

6 months ago  ·  

View on Facebook

GERMANY’S FOUNDATIONS TARGET RESIDENTIAL REAL ESTATE IN BIG CITIES

One in three charitable foundations in Germany are looking to increase their investments in real estate, especially in the residential sector. This is the result of a survey carried out in Spring 2016 by the Maecenata Institute for Philanthropy and Civil Society, which interviewed representatives from 288 charitable foundations. The foundations’ investment strategies prioritize stable yields, consistent rental incomes, stable value appreciation – and the chance to diversify risk. The volume of individual rental agreements within a residential real estate portfolio means that concentration risks can be avoided and other investment-related risks reduced.

German foundations are subject to a set of strict regulations, designed to protect the assets they hold from mismanagement and fraud. Almost two-thirds of them manage assets worth more than 2.5 million euros, which the foundations use to provide a wide range of charitable services. Foundations make a valuable contribution to German society, and their engagement often picks up where state institutions and private sponsors reach their limits. In order to grow their capital, foundations need to generate suitable returns on investment, without placing their capital reserves at risk. As interest rates have remained low for such an extended period of time, thanks to the European Central Bank (ECB), it has become more and more difficult to achieve these returns with investments in stocks and bonds.

GROWTH REGIONS AND MAJOR CITIES

As a result, charitable foundations have been steadily increasing their investments in real estate. Real estate investments currently account for an average of 39 per cent of their investment portfolios. A sizable majority of foundations have already invested in domestic and foreign real estate, and over the next five years they want to step up their investments, especially in German property. Above all, foundations are prioritizing direct investments in low-risk assets in the core sector. They are planning investments in growth regions and big cities, such as Cologne, Stuttgart and Berlin.

YIELDS IN BERLIN ARE IN LINE WITH TARGETS

The opportunities for investors are strong wherever housing is in short supply. Take a city like Berlin, for example, where the economy is growing by an average of 2.1 per cent per year, where real GDP grew by 3 per cent last year – and where the population is constantly growing. 3.5 million people already live in Germany’s capital city, but by 2030 the figure is set to rise to 3.7 million. Growth like this has an impact on the housing market: Over the last ten years, rents have increased by more than 55 per cent and the average square meter price for a condominium has surged by 73 per cent. The average yield in the residential investment market now stands at 4.5 per cent – and that is exactly in line with the earnings required by Germany’s foundations. Almost two-thirds of the surveyed foundations revealed that they generate yields of between two and five per cent from their real estate investments. For 70 per cent of the foundations, this is well within the range of their target returns.
... See MoreSee Less

6 months ago  ·  

View on Facebook

Archiv

 
Blog | 30. March 2017

DIAMONA & HARNISCH’s BLOG

TODAY’S SMART HOME IS TOMORROW’S STANDARD HOME

The electronics company Schneider Electric and the Berlin startup KIWI.KI had a great idea – why not combine our products? No sooner said than done. They have combined KIWI.KI’s keyless door technology with Schneider Electric’s building communication systems and have made the lives of property managers everywhere a great deal easier. Access rights can now be changed far more easily when tenants move in or out. The significant costs incurred when someone loses their keys are also a thing of the past. And service providers who need access to the property, such as delivery companies, garbage companies, suppliers, meter readers and workmen, no longer need to carry big bunches of keys around with them as they can now be granted access to the building remotely. Such systems are set to adopted widely in Berlin and a large number of housing companies have already implemented the technology – one percent of the front doors in Berlin will soon open without a key (says KIWI.KI). And the figure will only grow.

SMART HOME = INTUITIVE HOME

Apps for tenants and virtual notice boards in apartment buildings have become commonplace. Complaints, suggestions, notification of defects – all of these can be communicated to property managers via apps. When tenants need something repaired, their message goes directly to their landlord’s emergency hotline day or night, and tenants can even attach two photos to their message, and suggest two potential appointments for a workman to come and carry out the repairs. The benefits: There is often no need for any advance inspections and it is far easier to arrange appointments.
All of these new possibilities rely on the smartphone. Nowadays, nothing is possible without our multi-purpose devices, and, at least in theory, they make anything and everything possible. Unfortunately, technical innovations are not yet always the order of the day in our day-to-day lives. Many people still dismiss such developments as pipe dreams, and some are even suspicious or dismayed at the fast pace of change. On top of this, there are concerns that too much private data could end up in the wrong hands. This is one of the major reasons why Smart Homes are still the exception, rather than the rule. Intelligently regulated heating, turning the washing machine on, keeping track of what’s in the fridge or deciding whether a light should be switched off in order to save energy – no problem for the smartphone-controlled, intuitive smart home.

MORE COMFORT, LESS RISK

Smart Home systems that efficiently network people and technology can actually protect us and our homes from danger. If a smouldering fire breaks out, an intelligent smoke detector can send an automatic warning to the user’s smartphone. No one will ever have to go on vacation again worrying about whether they remembered to switch off their iron or coffee machine. Just one click and we’ll be able to check up on things at home and, if necessary, switch off an individual plug socket remotely. What might seem alien to many tenants, landlords and homeowners today will become the standard of tomorrow. Home automation will ensure that our homes become more comfortable and – despite a number of concerns – safer.
Only half of those who took part in a recent survey carried out by Bitkom, Germany’s digital association, could explain what a “Smart Home” is – a network of household technologies, appliances and consumer electronics. The survey found that, among those who are already taking advantage of Smart Home technologies, enhanced security is the number one factor. Approximately 61 percent of users have installed intelligent technologies to protect their homes. The survey also showed that Smart Home systems are being used in combination with mechanical security systems to help scare intruders away or secure their subsequent conviction.
... See MoreSee Less

2 weeks ago  ·  

View on Facebook

BERLIN: CAPITAL OF ELECTROMOBILITY

Every now and then a red e-scooter zips down a narrow street, whizzing past a car-sharing company’s electric car as it charges in an on-street parking bay outside a classic, Wilhelminian Berlin apartment building. At the same time a teacher exits the building opposite and swings his legs over the crossbar of an electric bike, setting off on his four-kilometer ride to school through the city’s morning rush hour. Welcome to Berlin – Germany’s biggest testing ground for electromobility.

CAR-SHARING, E-SCOOTERS, ELECTRIC BIKES – BERLIN IS TURNING THE VOLUME DOWN

No other region in Germany has as many low-noise electric vehicles on its streets as the Berlin-Brandenburg metropolitan region. Roughly 3,500 electric vehicles are in operation every single day, and by 2025 the Berlin Agency for Electromobility predicts that the number of electric vehicles registered in the city will increase by a further 30 percent. And it’s the city’s businesses that are taking the lead in the use of battery-powered vehicles – they own and operate 75 percent of the electric vehicles on Berlin’s roads. The local water company, for example, has 21 electric vehicles – almost ten percent of its entire fleet. And the car-sharing company, Multicity, has an impressive 250 Citroen C-Zeros, all powered by renewable energy. Then there’s the joint venture between Sixt DE and BMW, which has now added BMW’s I3 electric model to its DriveNow fleet. The I3 is the Munich car company’s first ever electric vehicle. Opel’s response to BMW, the Ampera-e, is coming this year, and Mercedes has launched a new model, based on its mid-sized SUV GLC, powered by a combination of battery-power and hydrogen.

Other forms of battery-powered transportation are also gaining in popularity. The e-scooter company Emio in Schöneberg has 150 bright red scooters spread around the city’s commuter rail stations, all of which can be located and rented via smartphone app. The major benefit for users – at 19 cents per kilometer, the scooters are even cheaper than car-sharing. Electric power is also playing an increasingly important role in the logistics sector, especially when it comes to the so-called last mile, the final leg of a route to a consumer’s delivery address. In order to reach customers from its distribution center on Kurfürstendamm, the US retail giant Amazon is increasingly dispatching couriers on electric cargo bikes. Berlin’s Senate is convinced that electric bikes have a great future in the consumer sector, and points to the large number of commuters already using them to cover the distances between home and work and the city’s rail stations. Right now, the Berlin metropolitan region proudly boasts between 80,000 and 100,000 e-bikes across the region.

So what are Berlin’s public transport companies doing to improve the environment? The BVG, which runs the city’s subway, bus and tram lines, has been testing Solaris Urbino 12 electric buses on its 204 bus route between Zoologischer Garten and Südkreuz for the past 12 months. The buses operate with a cable-free, inductive charging system. And this is just one of the many projects in Berlin-Brandenburg that are currently being funded by the International Electromobility Showcase program. Federal and state governments, along with businesses, have pumped a great deal money into the program since 2013 – and total funding has now reached €76 million.

BERLIN’S ROAD TO A GREEN FUTURE

Drivers who decide to buy an electric car are not only making a significant contribution to the environmental future of their city – they are also securing long-term savings for their households’ budgets. The federal government currently subsidizes the purchase of an electric car to the tune of EUR 4,000, and offers additional financial support every time a vehicle is charged. Cars can easily be powered by renewable energy, at a cost of less then €4.00 per 100 kilometers, according to calculations published by the Federal Ministry of the Environment. Berlin’s Senate is also digging deep into its pockets as it promotes electromobility. The city’s politicians have approved €6.5 million of funding to set up 1,100 new charging stations, adding to the 636 that are already available across Berlin. For drivers in a hurry, there are even seven charging stations in Berlin that offer “fast charging.” They can charge their cars to 80 percent capacity In just 30 minutes – more than enough power for a trip to the shops.
... See MoreSee Less

4 weeks ago  ·  

View on Facebook

STRONG BUSINESS LOCATION, ATTRACTIVE METROPOLIS

Berlin is an incredibly popular tourist destination – the number of holidaymakers is constantly on the rise and has now reached twelve million per year. More than ever before, Germany’s capital is an attractive destination for international guests – around 4.6 million overseas visitors came to the city last year to gain firsthand experience of Berlin’s vibrancy and color and its multi-facetted cultural offerings. In addition to these tourists, more and more people are also coming to Berlin to make the city their new home. The population of Germany’s largest city has risen to 3.52 million – roughly 150,000 more than just five years ago.

BERLIN IS GERMANY’S OFFICE CAPITAL

It’s not only a great place to live, there are more and more jobs in Berlin too. The city’s economy has been delivering strong growth for a number of years now. For the fourth quarter in a row, the Spree metropolis defended its crown as Germany’s most popular office market. Neither Munich, nor Hamburg or Frankfurt am Main were able to wrestle the title from Berlin. BNP Paribas Real Estate recently announced that a total of just under 840,000 square meters of office space was let in the city in 2016. Not even the Bavarian capital, Munich, managed to match this impressive total, and had to settle for a full-year total of less than 800,000 square meters; Frankfurt and Hamburg didn’t even manage to top 600,000 square meters.

The strong demand for commercial property reflects the growing importance of Berlin as an economic motor. According to Colliers International, transactions involving commercial real estate in Berlin totaled EUR 4.9 billion in 2016. This placed Berlin third in the national rankings, trailing Munich (EUR 6.86 billion) and hot on the heels of Hamburg (EUR 4.91 billion).

Berlin’s ascension has been underway for years – more tourists, more inhabitants, more businesses. The amount of available on Berlin’s office market has become steadily scarcer. In comparison with the previous year, the volume of office space available at short notice fell by almost one third. According to BNP, the office vacancy rate has dropped to just 2.8 percent. The most drastic declines in vacancies were registered in Berlin’s central districts. This is where large numbers of people want to combine both living and working. Offices, apartments, schools, bars, restaurants and shops – Berliners love their neighborhoods because they provide every convenience of a booming metropolis within easy reach.

RESIDENTIAL REAL ESTATE ON THE SPREE IS A SAFE INVESTMENT

As a result, the housing market is becoming ever tighter. A recent analysis from Aengevelt estimated that roughly 248,000 new residential units need to be built by 2030. This means that 17,500 new apartments must be developed every single year. Unfortunately, this total has only ever been achieved in one year, namely 2016. Over the last ten years, an average of 5,000 new apartments have come to market. This is nowhere near enough to meet the rapid growth in demand. The latest population forecasts from Berlin’s Senate Department for Urban Development and the Environment predict that the city’s population will increase to four million by 2030, excluding refugees. Housing will become an even more scarce commodity. Anyone who buys an apartment in Berlin right now will certainly be sitting pretty – especially given the historically low interest rates.

Buying an apartment is well worth it, especially as rental prices will continue to increase. Berliners are already paying seven to eight per cent more in rent each time they move, the local Tenants’ Association has reported. And that’s not set to change this year – the shortage of available housing will see to that. As a result, citizens and business representatives are demanding more and quicker building permits, increased housing density in central urban districts, and additional investment in IT infrastructure to support the city’s businesses. Christian Wiesenhütter, boss of Berlin’s Chamber of Commerce, says that Berlin is, “Number one for job growth,” not least because of its booming IT sector, and that “The chances of finding a job in Germany’s capital city are good and demand for skilled workers is higher than ever before.” And long may it continue.
... See MoreSee Less

1 month ago  ·  

View on Facebook

GOING GLOBAL: FOREIGN INVESTORS TARGET BERLIN’S PREMIUM REAL ESTATE

Whether the new residential quarter at Leipziger Platz, the Palais Theising at the Brandenburg Gate or the exceptional project "Sapphire" on Chausseestraße – Berlin can also do luxury. In the past few years, more and more apartments have been created for more sophisticated buyers. Interest in exclusive objects is growing steadily. In the first six months of 2016 alone, the demand for exceptional properties has risen by a whopping 14 percent, according to an evaluation by the portal LuxuryEstate.com. This makes Berlin Germany's largest market for premium residential properties (evaluation of the online portal LuxuryEstate.com).

CAPITAL GAINS VS. INITIAL YIELDS

Especially foreign investors have discovered Berlin for themselves. They come from Turkey, the Arab Emirates and the USA. The share of US-American buyers in the first half-year of 2016 rose by eleven percent compared to the previous year’s period. In contrast to many institutional investors, these private buyers have long since bid farewell to excessive yield expectations, and now accept three percent instead of five. There are others things that are more important than the initial return: the prospect of long-term capital gains, security, and a stable economic environment in times of volatile international markets. And that is exactly what Berlin premium properties offer.

LONDON, PARIS, NEW YORK − AND BERLIN

Some premium residential properties sell for more than three times the average market price, the brokerages report. At the top end of the market, buyers were already paying up to EUR 19,000 per square meter as early as 2015. The most expensive apartment changed owners for |EUR 4.3 million. In the "Sapphire" development from the US star architect Daniel Libeskind, which was completed in 2016, the recommended price for the most luxurious apartments started at EUR 15,000 per square meter. Market observers are therefore certain: Berlin has long played in the top league, alongside London, Paris and New York – without having reached the same price level. In these metropolises, buyers sometimes pay three times as much for an equivalent property. Advantage Berlin: On the Spree, there is still much potential for value growth.

In addition to the district of Berlin-Mitte, sophisticated buyers have been able to find what they are looking for in Charlottenburg-Wilmersdorf and Friedrichshain-Kreuzberg. For a luxury object with future-oriented prospects simply everything must be right. 1A-location, central and yet quiet, maybe a park view, modern architecture, generous room sizes, high ceilings, quality finishes, chic details, such as a dressing rooms, underground parking and an elevator directly into the apartment.
... See MoreSee Less

2 months ago  ·  

View on Facebook

BERLIN’S SOUTHWEST – IN THE MIDST OF NATURE, IN THE MIDST OF THE CITY

Steglitz, Zehlendorf, Dahlem – The southwest of Berlin is among the top locations in the city. Upscale flair, waterways and green areas, chic homes and stylish villas on park-like grounds dominate this part of Berlin. And yet the hustle and bustle of the city is only ten minutes away by subway, which makes it an expensive place to live. While rents and residential property prices have risen dramatically, especially in Berlin-Mitte, the city’s southwest districts are now catching up. Rents in good locations range between EUR 14 and 16/sqm per month; detached and semi-detached houses sold for an average of EUR 575,000 in 2016. Even in less desirable locations, such as near large traffic intersections, prices of almost EUR 400,000 are to be expected, according to the IVD real estate association. Thus Steglitz-Zehlendorf is Berlin’s second most expensive district after Charlottenburg-Wilmersdorf.

The popularity boom in the southwest of Berlin is mainly due to the fact that more and more condominiums are being built here. Where aging detached and semi-detached houses or single villas once dominated the cityscape, today, the district’s development land is used to create high-quality housing to accommodate the growing number of inhabitants. The consequence: A noticeable upsurge in prices. In Dahlem, the square meter price reached EUR 6,200 last year. In comparison, an average of EUR 3,200/sqm is the current norm in Berlin.

CHINESE INVESTORS ARE ATTRACTED TO DAHLEM, STEGLITZ AND ZEHLENDORF

This development is bringing more and more investors on board. And, for some time now, they have not just been coming from Berlin or the rest of Germany. Asian investors in particular have discovered the capital for themselves, Chinese investors are the second largest buyers of residential property after the Americans and the Russians. In October alone, the largest Chinese sovereign wealth fund invested EUR 1.2 billion in Germany – 40 per cent of the 16,000 apartments are located in the metropolis on the Spree.

Private Chinese investors are also flocking to Berlin, which is regarded as “Europe’s new capital of investment” in China (Info: China correspondent for German newspaper, taz). Transparent structures, economic stability and a favorable exchange rate have earned Berlin this title over the past few years. With average purchase prices between EUR 2,500 and 4,000, property is also affordable by Chinese standards. In Peking a condominium costs more than twice as much. Since Chinese people are allowed to have only one home in their home country, several families sometimes pool their resources to raise enough money to purchase larger properties, market observers report.

LARGE APARTMENTS FOR RENT

Above all, Chinese private investors appreciate large apartments, which in most cases they do not use themselves, but prefer to rent out. On average, they will pay around EUR 500,000 for such a property. In their search for suitable luxury properties, they are focussing ever more on Berlin’s southwest. Dahlem is especially popular because it has the district’s largest apartments, averaging 105 square meters.
... See MoreSee Less

2 months ago  ·  

View on Facebook

GROWING NUMBERS OF FOREIGN INVESTORS ARE BUYING RESIDENTIAL REAL ESTATE IN BERLIN

Berlin has become one of the most attractive investment destinations in all of Germany. And it has done so in the space of just a few years. Foreign investors have long been casting interested eyes over the city on the Spree. Which is not at all surprising, for things are looking very good in Berlin: The population is growing, the economy is ticking along nicely, and the real estate market is booming. For the coming year, the Berlin Investment Bank (IBB) has forecast that the German capital’s economy will grow by 2.2 percent – which will make this the fourth year of above-average growth in a row. The forecasts for Germany as a whole indicate growth of just around one percent.

BRIGHT PROSPECTS

The IBB’s economic analysts predict that employment will grow at an even faster pace than Berlin’s economy, with 3.2 percent more jobs in the city by the end of this year. (For Germany, jobs are forecast to increase by just 1.5 percent.) Over the last three years, a total of 130,000 new jobs have been created in Berlin; during 2017 the number of jobs subject to full-time jobs could well increase by a further 30,000 to 40,000. This jobs growth is largely being driven by the huge number of new start-ups and young companies who have made Berlin their home. According to a study from the Institute for Strategy Development, start-ups are now the city’s fifth biggest employer – ahead of Siemens, Deutsche Telekom and Daimler. In the first six months of 2016 alone, EUR 957 million of venture capital flooded into the Berlin’s start-up scene.

INTERNATIONAL CAPITAL FLOWS INTO BERLIN

It has been some time since investors discovered Berlin’s real estate markets: During 2016 initial figures indicate that around EUR 6 billion of investment was pumped into commercial real estate in Berlin. By spring 2016, the investment total had already exceeded EUR 2 billion. And 74 percent of these investors were foreign investors – more than in any other major German city. Residential real estate has also risen up international investors’ agendas, which is entirely understandable given the growing demand for housing in Berlin, the natural consequence of the city’s sustained population growth. Investors certainly appreciate the opportunity to combine low investment risks with stable yields.

TOP DOG FOR ONLINE RESIDENTIAL REAL ESTATE LISTINGS

More and more frequently it is the international middle-classes from Asia, the Middle East and the USA who are interested in buying condominiums in Berlin. The highest demand is for upmarket apartments costing EUR 4,000 per square meter and more. Market observers are certain that the United Kingdom’s planned exit from the European Union will drive demand for residential real estate even higher. Private and institutional investors who have previously focused their investments on London are set to step up their activities in Germany. And it goes without saying that Berlin’s real estate market will be one of the biggest winners fro such a shift, especially as the German capital is already top dog when it comes to online real estate listings – which means that foreign buyers who are searching online for residential real estate in Germany are most likely to find what they are looking for in Berlin.
... See MoreSee Less

3 months ago  ·  

View on Facebook

BERLIN’S EVOLVING NEIGHBORHOODS

Like no other city in Germany, Berlin stands for revolution and evolution, and for the juxtaposition of opposites. For a long time these have been an inherent part of the city’s topography – after all, for decades the Spree metropolis was divided into East and West by the Wall. Today, there is not that much left to remind us of this fact. The Wall was torn down, the city’s districts are now growing together, and the last strips of no man’s land in the inner-city are being developed to construct new apartments, which are still in very short supply in Berlin.

OPPORTUNITIES FOR APARTMENT BUYERS

The quarter between Potsdamer Straße, Bülowstraße and Schöneberger Ufer is a perfect example. This is an outstanding downtown location – just a stone’s throw from Potsdamer Platz, Friedrichstraße and Kuʼdamm, and home to large numbers of companies, associations and charitable foundations, and the workplace of thousands of Berliners. Right now, 550 new apartments are being developed, along with countless restaurants, cafés and shops. Many of the new apartments are condominiums and, given their location close to central Berlin, they are of great interest to both owner-occupiers and investors.

CENTRAL LOCATION, SOPHISTICATED AMENITIES

Here, on an undeveloped site at the junction of Kurfürstenstraße and Else-Lasker-Schüler-Straße, “Carré Voltaire” is currently under construction. At a cost of EUR 58 million, 127 exclusive condominiums are being developed, offering a total of 12,000 square meters of living space across eight storeys. In addition, the development includes 200 square meters of commercial space, which has been earmarked for a café and retail boutique, and an underground parking facility with approximately 88 double-width parking spaces, a charging station for electric vehicles and E-Bikes, and storage space for 180 bicycles. The one- to five-room apartments will cost between EUR 4,200 and 7,400 per square meter.

Construction is well underway in many other parts of the neighborhood. In Tiergarten-Süd, on the furniture store car park on the corner of Genthiner and Kurfürstenstraße, 170 apartments and an organic supermarket are being built. At Genthiner Straße 40, 113 apartments and 1,950 square meters of commercial space are being developed in a chic, industrial-loft style. And between Genthiner and Derfflingerstraße, 88 apartments, in combination with space for start-ups and creative companies is planned. The new development has been designed to offer a mix of compact rental units and condominiums. The apartments are available for purchase from EUR 4,500 per square meter.
... See MoreSee Less

3 months ago  ·  

View on Facebook

IN BERLIN, HOME OWNERSHIP IS GETTING MORE EXPENSIVE – AND PRICES ARE RISING FASTER THAN EVER

The German real estate boom continues – and with far-reaching consequences. Prices are rising constantly, especially in major cities such as Berlin. Beyond the most sought-after central districts, the price of development land has now risen to €200 per square metre – an increase of more than 11 percent in comparison with autumn/winter last year. The only cities that have seen land prices accelerate at a faster rate are Frankfurt/Main, Munich and Bremen, as confirmed by the IVD real estate association. The average asking price for a new condominium in Berlin has now climbed to €4,100 per square metre. Older apartments now cost an average of €1,950 per square metre – an increase of 5.41 percent.

One reason that prices continue to rise is the shortage of housing in Germany’s major cities. In Berlin, despite an increase in construction activity, there is still too little housing – and demand is strong thanks to the influx of new Berliners. And it looks as if the situation is not about to change any time soon. The real estate agents’ association, IVD, assumes that inward migration and the shortfall in supply will drive real estate prices 25 percent higher in Berlin over the next five years.

MAKE THE MOST OF THE BOOM ON THE BANKS OF THE SPREE

For buyers and investors there has never been a better time to enter the Berlin real estate market. Above all, condominiums are in high demand and prices have surged as a result. According to a new Postbank study, “House Price Atlas 2016 – Living in the City,” condominium prices have risen by 44 percent over the last 15 years. Given the city’s strong population growth, real estate experts are confident that prices in Berlin will continue to rise.

Would-be buyers shouldn’t wait too long before they take advantage of this situation – otherwise their dream home will be even more expensive. In Dahlem (in the district of Steglitz-Zehlendorf), the square metre price had already climbed to €4,759 in 2015, in Berlin-Mitte buyers had to budget €4,538 per square metre and in Kreuzberg prices had reached €3,420 per square metre. The IVD identifies Spandau and Reinickendorf as offering comparatively low prices. In these two districts a square metre costs between €2,500 and €2,700.

TAKE ADVANTAGE OF LOW INTEREST RATES FOR AFFORDABLE FINANCING

There is another very good reason not to delay a property purchase too much longer: The current low interest rate climate won’t be with us forever. After a number of lenders increased their construction loan interest rates in November, FMH-Finanzberatung forecasts that mortgage interest rates (whether for 5, 10, 15 or 20-year fixed-rate mortgages) are going to climb. It is still the case that developers and buyers with strong credit records can secure ten-year loans at less than one percent interest per annum. And those who are looking for 15-year fixed-rate loans, which are still a good option as long as interest rates remain so low, can find lenders willing to finance their property purchase at interest rates below 1.5 percent – an opportunity that buyers should certainly take advantage of.
... See MoreSee Less

4 months ago  ·  

View on Facebook

MORE AND MORE BERLINERS ARE BUYING APARTMENTS

Berlin has long since been more than just a first-class tourist destination. And once they have experienced the city, a short stay just isn’t enough for a growing number of people. People are moving to the pulsating Spree metropolis from all over, drawn by the city’s trend-setting cultural and entertainment scenes, multi-facetted shopping and eclectic restaurants, all of which mirror Berlin’s well-established internationality. Then there’s the city’s strong employment growth, which is also drawing large numbers of people, above all young people, to the German capital.

So, the fact that space in the city on the banks of the Spree River is at a premium should come as no surprise. According to official forecasts, by 2030, there will be roughly 266,000 more people living in Berlin than there are today. This makes living space extremely valuable. Even today, the supply of housing can hardly satisfy current levels of demand. And rents are still rising rapidly, despite rent controls. This year alone, the IVD real estate federation reports that rents have risen by between 5.5 and 6.7 percent – depending on location.

BERLIN’S HOMEOWNERSHIP RATE IS JUST 15 PERCENT

Given all of these developments, more and more Berliners are seriously considering buying their own apartments. Anyone who can afford it is investing now, before prices increase further. After all, the condominium prices are also rising strongly: Existing condominiums now cost an average of € 2,100 per square metre, roughly 13.5 percent more than in 2015; and newbuild apartments cost an average of € 3,600 per square metre – a year-over-year increase of 12.5 percent. In sought-after neighbourhoods in Berlin-Mitte, Charlottenburg and Friedrichshain, the prices are much higher still. And there’s no end in sight.

But all of this is good news for buyers – both for owner-occupiers, and for investors hoping to make capital gains. In the long-term, owning your own home is cheaper than paying years of rent. Especially as mortgage interest rates are lower than ever: According to data compiled by FMH-Finanzberatung in Frankfurt am Main, banks are currently charging an average of 1.07 percent on a fixed-rate, 10-year mortgage. A 20-year mortgage now costs an average of 1.74 percent (as of 18.10.2016).

CONDOMINIUMS ARE A SECURE INVESTMENT

The same is just as true for buy-to-let investors. As Berlin booms, the city’s chronic housing shortage, especially in central districts, continues to make housing a much sought-after commodity – and a secure investment. Average rents in Charlottenburg-Wilmersdorf have already climbed to € 11.50 per square metre. Berlin-Mitte has the next highest average rent, at € 11.25/sqm. Steglitz-Zehlendorf and Tempelhof-Schöneberg share third place, at € 10.25/sqm. Even tenants in less affluent residential neighbourhoods are paying an average of € 9.50 per square metre.
... See MoreSee Less

4 months ago  ·  

View on Facebook

PRICES FOR BERLIN’S LUXURY APARTMENTS ARE SURGING – AS IS INTEREST FROM INVESTORS

As investment vehicles, luxury apartments are as popular as ever for high net worth individuals (HNWIs) around the world. Within the next decade, almost fifty percent of HNWIs will have made investments in buy-to-let residential property. The most lucrative investment destinations include Vancouver, Sydney, Shanghai, and two German cities. For high-end residential property investments, Berlin ranks just behind Munich. This was revealed by a survey of 400 leading private bankers and investment advisors who work with ultra-high-net-worth (UHNWI) clients, i.e. individuals with assets worth at least US$30 million.

JUST AS COSMOPOLITAN, BUT MORE AFFORDABLE THAN PARIS OR LONDON

The fact that Berlin is attracting so much interest from international investors has a simple, but very good reason: In many of the most popular real estate centers in Europe and North America, property has become scarce and extremely expensive. The last inner-city building lots have been filled, the number of new, luxury developments is in decline, and property prices remain fairly stagnant. All of this has added to the attractiveness of Germany’s capital. Berlin has finally drawn level with London, Paris and New York City in the elite group of world cities, but it still holds one very important card: Berlin’s property prices are just a fraction of the prices found in other major metropolises. In international comparison, the differences are stark. Whereas prices for high-end real estate in Berlin increased by 9.0 percent in 2015, the global average was a paltry 1.8 percent.

SPREE METROPOLIS OFFERS FANTASTIC PRICE GROWTH POTENTIAL

Berlin’s luxury apartments cost an average of €7,000 per square meter; penthouse prices average €10,000. At the top end of the market, buyers paid €19,000 per square meter for premium apartments in the city on the Spree River. These prices are similar to the level found in Hamburg, and double the prices in Cologne. A glance at the prices paid in other major European cities reveals just how affordable Berlin still is. In London or Paris, today’s buyers are paying up to three times as much for luxury apartments.

As a result, many market observers have identified the greatest price growth potentials in Berlin’s “high-end” residential segment – especially as Berlin’s ongoing tourist boom means that the city is becoming more famous every day. Just last year, the city attracted twelve million visitors – a new record. With more than 30 million overnight stays, 2015 was the best year for Berlin’s hoteliers since records began. Almost two-thirds of these were international visitors, with the largest contingent coming from Great Britain. There were also significant rises in the number of visitors from the United States, Italy and the Netherlands.

BERLIN-MITTE IN FOCUS

Traditionally, real estate investors have followed the paths beaten by tourists. After all, it’s not just tourists, but also tenants and buyers who want to be close to the action – preferably with a clear view of the Reichstag or Museum Island, or in close proximity to landmarks such as Potsdamer or Pariser Platz. It’s therefore no surprise that a majority of “high-end” residential developments are concentrated in the district of Berlin-Mitte. Developers have moved beyond mere construction and refurbishment projects; here they are creating the kind of visionary residences that also appeal to sophisticated international buyers – including en suite bathrooms and full-service concierges. So, buyers can now feel just as much at home here in Berlin as they do in London, Paris or New York.
... See MoreSee Less

5 months ago  ·  

View on Facebook

FAMILY, FILM, FREE-TIME – LIFE IN THE CITY IS COLORFUL AND VIBRANT

Berlin is currently trending. The number of inhabitants has been growing for years – 45,000 new residents arrived in 2015 alone. The capital has enormous pull. However, it is not the only city that is following this national trend: the return to urbanity.
Everywhere in the country, people from the periphery are moving into the bigger cities. Where at first young families were escaping to the countryside to raise their children far away from the tumultuous city, now they are returning in growing numbers – particularly to the pulsating city centers. After all, this is where it’s closest to their jobs, day-care centers and shopping. In the evening, cinemas, restaurants or fitness studios are also nearby.

DIVERSE DISTRICTS, VARIED LIVING

Urban living is not just attractive for younger people. Ever more seniors are moving from the countryside to the city or from far-flung districts into the prosperous city center, where they will find a senior-friendly infrastructure. Bus and rail connections, doctors and shopping are just around the corner. Residents can meet up on the ground floor to savor company, coffee and cake.

When it comes to satisfying the varied demands of urban residents, urban planners and real estate developers face enormous challenges. It’s time to rethink the situation. In future, experts will not only need to develop different real estate concepts for different communities; their concepts will also have to accommodate residents in all of life’s various phases – while working with limited space. Everyone appreciates the diversity of inner cities and wants to live at the heart of the action.

SAY GOOD-BYE TO STANDARDIZED APARTMENTS

The result should be city districts where single household apartments can co-exist with large family apartments or senior-friendly residences. The age of the one-size-fits-all apartment is well and truly over. To satisfy all these diverse needs, the housing industry has started employing many strategies, such as joining smaller units to make larger, more comfortable properties, or repurposing vacant office buildings into residential space. In addition, there has been an increase in new construction on brownfield sites and inner-city commercial parks. This is already happening in many places. Completely new districts are conceived with this flexibility in mind.

LIFE IN THE NEIGHBORHOOD: LIVING, WORKING, ENJOYING

Urban living has long blurred the strict lines between work life and home life. Businesses, offices, apartments, restaurants, cultural centers, nurseries and schools are all next to each other and not zoned into separate areas. This tendency can already be seen in many of Berlin’s districts. It matches the ideals of big city dwellers – life and work in healthy balance without time-consuming commutes.

The city of today and tomorrow won’t be a place of anonymity. Ideally, it will offer a combination of diversity and openness. Periodic surveys of city dwellers confirm that urban living for most people means the chance to live in a community. Berlin’s districts, such as Kreuzberg, Wedding or Prenzlauer Berg, are prime examples of the successful mixture of social milieus, cultures and age groups.
... See MoreSee Less

5 months ago  ·  

View on Facebook

NEW STANDARDS IN URBAN DEVELOPMENT ARE BEING SET AT BERLIN’S OSTBAHNHOF

Living, working, leisure – all in one neighborhood. With the end of urban flight, city planners have had to face up to new challenges arising from the growing number of people who are flocking back to city centre districts. Planners need to create new, high quality urban districts; quarters that are more than just business parks or exclusively residential neighborhoods. Right now in Berlin, new standards are being set in the development of just such urban spaces: Between now and Fall 2018, the US-based Anschutz Entertainment Group (AEG) is investing €200 million to transform the area around Ostbahnof into an inner-city entertainment district.

This major construction project includes a 14-screen, 2,500-seat, multiplex cinema, and the “Music Box”, an event arena for up to 4,000 visitors, which will provide the perfect setting for concerts, theater and gala dinners. On top of all this, there will also be a 28-lane bowling center and an extensive range of cafés and restaurants.

CONSTRUCTION BOOM ON FORMER RAILWAY LAND

The new entertainment district encompasses an area of 6,500 square meters and is being developed on the site known affectionately by every Berliner as “Mercedes Platz”. The American company has been hatching its plans for more than 15 years, having bought the railway wasteland near Ostbahnhof in Berlin-Friedrichshain with the intention of transforming it into a vibrant, modern metropolitan district.

The first project launched by the group’s CEO Phil Anschutz in Berlin was the large-scale event arena O2 World, since rebranded as the “Mercedes-Benz-Arena”, which offers 150 sporting attractions and concerts each year and has become a firm fixture in Berlin’s events calendar. The arena has also served as a magnet to draw a large number of other companies to the former railway hub. Daimler is one of the biggest names to be attracted to the area and moved its German headquarters to an adjacent site in 2013. The online retail giant Zalando is also developing its new headquarters nearby, aiming to house a majority of its 3,500 employees in its new offices to the east of the Mercedes sales HQ from 2017.

ENTERTAINMENT DISTRICT À LA “LAS VEGAS”

Just last year, a new “Holiday Inn” opened its doors, providing the district with its first hotel. And two new hotels are on their way: The Anschutz Entertainment Group is creating a total of 380 new hotel rooms – along with a generous amount of open space and attractive water features to create the perfect ambience for visitors to enjoy a relaxing stroll. The water features include a 1,000 sqm field of fountains, which, as well as providing dramatically choreographed water displays has also been designed to function as a children’s water playground. Entering fully into the Las Vegas spirit, the fountain’s columns of water will be illuminated in a variety of spectacular colors to deliver stunning evening aquatic displays, accompanied by advertising on large screens.

The area to the east of the arena is also the site of much activity. Right next to the iconic Warschauer Brücke, Freo Group is also investing €200 million, in this case in a shopping center. The futuristic, five-story “East Side Mall” is due to welcome shoppers from 2018. Across 25,000 square meters, the center will be home to more than 100 retailers, plus cafés, restaurants and leisure facilities – another cornerstone in the district’s evolution into a vibrant, urban quarter. The vision of the AEG CEO Phil Anschutz, that guests can head from one of his company’s entertainment events to a café, bar or restaurant, or stroll back home, or even head to work, is soon to become a reality. By 2020, approximately 20,000 new jobs will have been created – along with new apartments for around 4,000 Berliners.
... See MoreSee Less

6 months ago  ·  

View on Facebook

GERMANY’S FOUNDATIONS TARGET RESIDENTIAL REAL ESTATE IN BIG CITIES

One in three charitable foundations in Germany are looking to increase their investments in real estate, especially in the residential sector. This is the result of a survey carried out in Spring 2016 by the Maecenata Institute for Philanthropy and Civil Society, which interviewed representatives from 288 charitable foundations. The foundations’ investment strategies prioritize stable yields, consistent rental incomes, stable value appreciation – and the chance to diversify risk. The volume of individual rental agreements within a residential real estate portfolio means that concentration risks can be avoided and other investment-related risks reduced.

German foundations are subject to a set of strict regulations, designed to protect the assets they hold from mismanagement and fraud. Almost two-thirds of them manage assets worth more than 2.5 million euros, which the foundations use to provide a wide range of charitable services. Foundations make a valuable contribution to German society, and their engagement often picks up where state institutions and private sponsors reach their limits. In order to grow their capital, foundations need to generate suitable returns on investment, without placing their capital reserves at risk. As interest rates have remained low for such an extended period of time, thanks to the European Central Bank (ECB), it has become more and more difficult to achieve these returns with investments in stocks and bonds.

GROWTH REGIONS AND MAJOR CITIES

As a result, charitable foundations have been steadily increasing their investments in real estate. Real estate investments currently account for an average of 39 per cent of their investment portfolios. A sizable majority of foundations have already invested in domestic and foreign real estate, and over the next five years they want to step up their investments, especially in German property. Above all, foundations are prioritizing direct investments in low-risk assets in the core sector. They are planning investments in growth regions and big cities, such as Cologne, Stuttgart and Berlin.

YIELDS IN BERLIN ARE IN LINE WITH TARGETS

The opportunities for investors are strong wherever housing is in short supply. Take a city like Berlin, for example, where the economy is growing by an average of 2.1 per cent per year, where real GDP grew by 3 per cent last year – and where the population is constantly growing. 3.5 million people already live in Germany’s capital city, but by 2030 the figure is set to rise to 3.7 million. Growth like this has an impact on the housing market: Over the last ten years, rents have increased by more than 55 per cent and the average square meter price for a condominium has surged by 73 per cent. The average yield in the residential investment market now stands at 4.5 per cent – and that is exactly in line with the earnings required by Germany’s foundations. Almost two-thirds of the surveyed foundations revealed that they generate yields of between two and five per cent from their real estate investments. For 70 per cent of the foundations, this is well within the range of their target returns.
... See MoreSee Less

6 months ago  ·  

View on Facebook

Archiv

 

© 2016 Diamona & Harnisch Development GmbH | Leipziger Platz 14 | 10117 Berlin | T. 030. 89 38 46 0 | info@diamona-harnisch.com | Montag – Freitag: 09:00 – 18:00 Uhr
Impressum & Haftungsausschluss

Instagram

© 2015 Diamona & Harnisch Development GmbH
Leipziger Platz 14 | 10117 Berlin | T. 030 89 38 46 0 | info@diamona-harnisch.com

Impressum & Haftungsausschluss