Yet more evidence that the Berlin property market is the place to be, and this is not even our video!!
Property worth around €8.5 billion found new owners in Berlin last year (2010) in fgurest to be confirmed by the City’s Committee on real Estate Assest, the previous year (2009) the sum was 6.5€ billion.
Completion transactions on dewllings saw the biggest rise of 53% to some €2.9 billion, with prices rising from €680 m2 to €730 m2, apartment transactions saw a 30% increase to a total of 16,764 apartments, but that represents less than 1% of the total apartments in Berlin, which is perhaps why prices are rising overall in Berlin.
Prices in Mitte & Prenzlauer Berg saw rises of around 20% and 10% in Kreuzberg.
The UK’s largest property portal for overseas property web ‘Rightmove Overseas’ reported a 50% rise in searches for German property last month, perhaps generated by the increase press coverage on Berlin and it’s property.
News this week German insurance giant Allianz reports Q4 2010 showed an increase of 11% in profits, partly due to increased income from property, and from Germany’s Bundesbank that Germany has bucked the European trend of falling prices and actually seen prices rise, it’s reported that apartment prices in some cities have risen as much as 5% in 2010, as reported in the Financial Times, one of the reasons given in the rise in the monthly report for February 2011 were pretty good fixed 10 year interest rates of as low as 3.6% in some cases, with interest rate rises inevitable at some point that’s going to have an effect on 2100 prices…that’s all well for owner occupiers of apartment but what about investors with buy to let’s?
These investors fall into two camps, firstly people who have purchased single apartments as buy to let investment with a single source of income from the property so little scope to optimize the rent, the second is more the professional investor who has purchased a building full of apartments, that’s a very different opportunity, with multi apartments in a building there is plenty of scope to optimize the potential of a building, the report compares 2005 as it’s datum to current values in 2011, so how do buildings compare to single apartments?
A building of say 20 apartments in 2005 in Neukolln would have had tenants renting for between €3m2 and €5m2 so an average of about €4m2, 20110 is a very different picture, trendy Neukolln has rents of more like €6m2 – €10m2 on average for a good apartment being about €8m2 so double in 6 years, and in terms of property price increases that’s obviously had an impact, although it’s still possible to source buildings with rents around €5m as tenants who have been in a property for say 10 or more years will be paying about half the current open market rental value or less.
So it’s not only owner occupier properties that have increased in value in Berlin, and with banks still happy to lend up to 85% of the purchase price of a property to overseas investors, with net yields in the 8% range, loans with 10 years fixed rates it’s a very stable and safe city to invest in, tenants even pay all the service charges for a building you purchase, worth peeping over the wall from the West to check out the East side of Berlin’s vibrant property market.
John Aitken
An unloved, underprivileged district south of the River Spree has become a magnet for Berlin scenesters. DW’s reporter offers a homeboy view of an area usually dismissed as a ghetto.
Fries Neukolln, Weserstr's original hip bar.
Recently, while eating a taco at a joint near where I live in Berlin’s Neukoelln neighborhood, I overheard a telling conversation. Two young English-speaking women, probably around 20 and obviously recent arrivals to our fair city, were talking about the difficulty of finding a suitably located apartment.
“It sucks being in Prenzlauer Berg,” sighed one. “I have to travel 30 minutes to get to a decent bar.”
I nearly blew mole sauce through my nostrils laughing. Eleven years ago, when I permanently moved to Berlin, my entire circle of friends lived in the Prenzlauer Berg and Mitte districts in the former East and would draw air circles beside their temples upon learning I’d chosen to invest in property south of the River Spree.
Back then, Neukoelln existed in the popular imagination only as a kind of forbidden zone for lower-class alcoholics, people who chronically forgot to take their Lithium and double-digit Turkish families roasting whole lambs in three-room tenement flats.
But times change, and cities with them. These days, most parts of Prenzlauer Berg offer all the charm and excitement of a PTA meeting, whereas it’s virtually impossible to spit across the street in the northern section Neukoelln without hitting an independent fashion designer’s studio or a bar staffed by people who look like occasional members of The Arcade Fire.
As recently as 2006, Neukoelln attracted the opprobrium of the nation, after teachers at a neighborhood high school wrote to the mayor complaining that it was too dangerous to hold any kind of instruction in. Fast forward to now and hipsters sport t-shirts reading “I’m a Ruetli student.”
Gentrification happens elsewhere
The first step toward gentrification? I’ll never know exactly what the term means, other than a place someone liked being taken over by people whom that person doesn’t like. What I do know is that in the past 10 years the value of my apartment has roughly doubled, and I can get reasonably authentic Mexican food without having to inflict undue wear and tear on the soles of my Adidas.
Walk down Weserstrasse, which has become the street of choice for many 20-somethings to get hammered, and most of the bars still feel like they’re being run by students on the very edge of legality.
Moreover, I doubt Neukoelln could go the Prenzlauer Berg-Mitte route, even if it wanted to. First of all, it’s much bigger, and over 20 percent of its 300,000-plus inhabitants are foreigners – the vast majority working-class Turkish people, and not ex-pat computer programmers from New York or London.
Ironically, one reason student-types first begin moving in was because the U8 subway line was an easy connection up to the then-trendy districts in the East. They’ve since discovered that it’s more fun to stay in their own neighborhood to party.
And for the time being, at least, I’m having fun watching them do it.
Wall Street Journal, Berlin a buying Opportunity.
BERLIN—When the iconic Sony Center was completed on the former no-man’s land dividing East and West Berlin on Potsdamer Platz in 2000, it represented the rebirth of the German capital.
Now, after the National Pension Service, the South Korean pension fund, ponied up nearly $700 million to buy the offices, museums, luxury apartments, restaurants and cinemas at the popular tourist and commercial site, Sony Center may come to symbolize the recovery of continental European commercial-property markets.
The transaction was done as a share deal. Instead of buying the asset outright, NPS has effectively bought the complex by buying shares in the special-purpose vehicle that owns the asset, according to people familiar with the transaction.
Sony Center originally was built as Sony Corp.’s European headquarters for €750 million ($922.8 million) and was designed by German architect Helmut Jahn, who also designed the CitySpire Center near Carnegie Hall in New York and Bangkok’s Suvarnabhumi International Airport.
Sony Deutschland GmbH sold the complex of seven buildings for €600 million in 2008 to a consortium of Morgan Stanley’s MSREF VI International fund; the John Buck Co., a Chicago fund manager; and Corpus Sireo, an asset manager in Cologne, Germany. The 2008 sale was financed by German bank Landesbank Baden-Württemberg. People familiar with the transaction said the remaining debt on the complex matures in three years, adding that the loan-to-value ratio is “less than 70%” and that the special-purpose vehicle never has breached a covenant. When Morgan Stanley purchased the complex in 2008, vacancy was nearly 30% and now stands at less than 3%. continue to rest of article
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