Luxury property boosts Berlin investment market
The property market in Berlin is defying the wider global credit crunch with trendy parts of the city now sought after, it is claimed.
In the heart of East Berlin, once famous for its grafitti covered squats and prefabricated Soviet style cement blocks, luxury lofts with swimming pools, spas and concierge services are indications of a new trend.
'The whole concept is new for Berlin. All of a sudden we are seeing a large number of high-end projects being built or in the pipeline,' said Roman Heidrich, leader of the residential property team at Jones Lang LaSalle's Berlin office which was opened earlier this year in response to changes in the market.
The marketing seems to tick all the right boxes. With names like Fellini and Oxford, these luxury developments have asking prices of €10,000 a square metre, more than double the cost of similar property in Berlin two years ago.
But analysts are unsure where this surge will go. The property market in Berlin has confounded investors since the Berlin Wall came down 20 years ago. While property prices in other European capitals like Madrid, London and Paris, soared, Berlin prices stayed low.
Now the trendy areas are very much in demand according to property developer Maik Uwe Hinkel. 'We have Spanish, Italian, Polish and French buyers as well as Germans,' he said.
Indeed the number of new development is rocketing. There are about 30 new projects in the Mitte area between the Germany foreign ministry and the picturesque Gendarmenmarkt square. More are planned. A massive residential and commercial complex is due to start construction next year based on design ideas taken from the iconic Dakota building in New York.
But as Heidrich points out; 'It remains to be seen whether they will all find buyers.'