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Berlin is booming as the German capital enjoys its time to shine
November 9, 2015Article by Charlotte Ashton
The face of Berlin is changing. The German capital is increasingly becoming seen as Europe’s go-to city for bright young things, creative start-ups and anyone who’s anyone in the tech sector. In addition to its business offering, it has a thriving social scene, a great retail offering and a vast array of cultural attractions.
Investors flock to Berlin
Such a dynamic business environment with strong demand for rental properties has begun to attract serious numbers of investors to Berlin. According to the PWC Emerging Trends in Real Estate Europe 2015 report, the city was rated the top for investment prospect in 2015. Such is the popularity of Berlin’s combination of inexpensive assets and development opportunities that it has knocked Munich off the top spot. Furthermore, Berlin now stands as Europe’s third most active real estate market, according to the PWC data.
Ray Withers, CEO of specialist property investment company Property Frontiers, spotted Berlin’s potential some time ago. Property Frontiers is offering investment at Stadtpark Steglitz, located in one of south west Berlin’s affluent areas. The residential apartments are perfectly suited to Berlin’s young, ambitious population, offering modern living solutions with open plan, spacious living areas. Prices start from €153,670, with gross yields up to 5.6% realistically expected and no capital gains tax if the property is held from more than 10 years.
Ray Withers comments,
“Berlin is racing ahead of other European cities in terms of its ability to attract young, talented entrepreneurs and the impact of these bright young things on the city’s demographics is far from negligible. They’re breathing new life into Berlin and drawing in investment capital from around the globe.”
Strong demand for new homes
According to JLL, residential properties in Berlin attracted more than €2.2 billion of investment during H1 2015, up more than four times on the same period in 2014. Demand for property is high as a result of the city’s growing population. According to the Federal Institute for Research on Building, Urban Affairs and Spatial Development, 20,000 new homes are needed this year in order to keep up with demand. Yet in Berlin, as in many other cities in Germany and across Europe, supply is struggling to keep pace with demand.
The situation presents one of those fantastic investment opportunities that is perfect for real estate investors looking for a hands-off property investment in a hotspot that is packed with potential. The volume of new start-ups, tech and media companies in Berlin promises big things for the city’s future and savyy investors are racing to be part of the action.