The German capital will continue being a magnet for domestic as well as international investors, experts told The Real Estate Day.
‘I fully believe that Berlin will be a big capital like Paris or London,’ said Sven Henkes, CEO, ZIEGERT. ‘Keep in mind that it is only 30 years old, and there was no investment for decades. It has been catching up in the last ten years and that process will continue’.
If the city were a building in construction, he said, ‘it would be between the ground and the first floor, but it will soon reach those top floors’. There is still a lot of land, both public and private, that has not been released to the market for development, so ‘the growth potential is huge’.
Demand outstrips supply in the office as well as the residential sector.
‘In Berlin we have 50% local buyers, 25% national and 25% international, which is good because it is balanced,’ Henkes said. ‘But in the residential sector the vacancy rate is 1.4% which makes moving very difficult, and the office sector is in a similar situation’.
Demand has caused prices to increase, but ‘from an international perspective Berlin is still cheap compared to London or Paris, even if at present they cannot be compared,’ said Rainer Schorr, Founder & Owner, PRS Family Trust. ‘None of Germany’s top 30 listed companies has its headquarters in the capital, which is an unusual and indeed unique situation’.
Investors’ concerns about the imposition of rental caps in the residential sector can be exaggerated. ‘Rent controls are a political trend that is Europe-wide and not limited to Berlin and Vienna for example has much more drastic plans,’ he said. ‘In Berlin in any case if a rental cap were to be imposed it would not affect new –builds. But I don’t think that in the end these regulations will be brought in’.
The Germany Property Federation is challenging the law introduced by Berlin’s local government last October, which introduces a rent freeze for 5 years and rent caps. If the law were found not to comply with the Constitution it would have to be amended.
Contact the editor: mail