Berlin rates among the top in European residential property

Property markets around the world might be cooling but Berlin’s remains stable, according to a recent and highly regarded real estate forecast, Emerging Trends in Real Estate® Europe 2008. Berlin climbed 16 places within the space of a year and now ranks among the top ten investment markets along with three other German cities – Hamburg, Munich and Frankfurt. The report states, “Despite all the turbulence in the international markets, the German property market is still on the upturn.” Philip Barker, managing director of Overseas Homesearch who is currently selling three residential developments in Germany’s capital city, says “New apartment and hotel projects begin on an almost weekly basis in Berlin and media enterprises, innovative industries, the pharmaceutical industry and tourism are currently booming. Berlin offers great opportunity for residential investment properties, as rental yield is strong and demand for long-term rental properties is high. Property prices have already doubled since 2000 and further substantial capital growth in house prices is predicted over the next ten years.” Current average property values in Berlin sit at around €1,000-2,000 per sq m, compared with London’s average of around €5,500 plus. In the 1990’s, rents averaged €3.50 per sq m and new rental agreements made in 2005 rose to an average of €5.50 per sq m. Current agreements can now reach €7.50, with average rental agreements in some cases providing a guaranteed long-term rental income yield of up to 8% gross per annum. Currently, less than 20 per cent of Berliners own their own homes, with the majority of the stock still owned by the government. However, the authorities are currently selling a number of these properties, with some available through Overseas Homesearch priced from around €35,000. Initially, the state has declared that 15% of their housing stock will be sold and it is anticipated that such stock will be available for another two years. Berlin is split into 12 districts, each with their own character that will suit different buyers. The new projects underway, along with international businesses moving to Berlin, are helping to create a significant increase in both office and residential rents. Berlin is now the headquarters for more than 40 major international companies and others are moving in, such as the Swedish bank SEB and the US global financial services firm Morgan Stanley which have both recently acquired property in Berlin for €1.4 billion and €600 million respectively, with an initial rental yield of 5%. In 2006 and 2007 investors bought property in Berlin to a value in excess of €29.8 billion. Published on March 11th by the Urban Land Institute (ULI) and PricewaterhouseCoopers LLP, the fifth annual report covers 27 markets in countries throughout Europe and is based on surveys and interviews with nearly 500 of the industry’s leading authorities. An example of an apartment for sale in Berlin includes a studio of 34.44 sq m in the Marzhan district of Berlin, priced at €35,473 (approx. £27,285) with a 10 year guaranteed rental yield. For further information about properties for sale, please visit www.overseashomesearch.co.uk or phone 0800 652 0769. -Ends- For media information and/or images, please contact Nicola Preston, BlueIce Communications, Tel: +44 (0) 20 7937 7537, Email: npreston@blueicecom.com