Germany’s federal structure has meant that the country is polycentric and major cities such as Hamburg, Frankfurt, Dusseldorf, Cologne have comparable strength, in the last few years Berlin has taken off and is measuring itself instead against Paris and London.
“We’ve been waiting for the capital to actually claim its capital status for more than 20 years. We had this boom phase right after The Wall came down in the early 90s and for a long time nothing really happened in Berlin,” said Inga Schwarz, Head of Research, BNP Paribas Real Estate Consult GmbH.
“We had expected to see corporates move their headquarters into Berlin,” she said but that did not happen until 2015.
“All of a sudden you had this big group of students coming into the market, you had comparatively cheap labour, you had comparatively cheap rents, and that in combination with great culture made it all of a sudden kick in and Berlin was this ‘must-be’ place for people to live,” Schwartz told Real Asset Insight’s Richard Betts.
She added that it is not an accident that electric car manufacturer Tesla is establishing itself on Berlin’s outskirts.
“Berlin is trying to move closer to Paris and London, rather than to Munich and Frankfurt,” she said.
Click on the video to watch the full interview or listen to the podcast below.