1 Investment �
Investing in Berlin :
An Engaged Relationship
Berlin has become Europe ’ s third most popular destination after London and Paris . This ever-growing interest in the German capital , and immigration to it , has led to increased demands for property to rent and buy , mainly from foreign investors . Despite this , real estate prices in Berlin remain almost too good to be true .
Berlin - “ die Perle an der Spree ” or the Pearl on the banks of the River Spree - has been attracting foreign investment in real estate since its reunification in 1989 . This is due to the fact that an investment in Berlin real estate still represents no real financial risk , high leverage , and stability .
German financial practice is conservative and the country remained relatively unscathed by the financial crisis that swept Europe in 2008 . With its chequered past , Berlin is a lively vibrant city . It has an area of around 900 km ² with a population of around 3.5 million . It is one of Europe ’ s greenest cities as well as a cultural , political and creative centre . A new airport , opening in the southeast , will enhance the German capital ’ s role as a gateway to eastern and western Europe even more so .
The first requests began for joint venture investments from the Middle East from pioneers looking to invest in cities less obvious than London
Dr . Marc Schulten , founder and CEO at FFIRE , a financial management firm based in Berlin specializing in real estate investment , says that the German tradition of spending more on travel and cars , as opposed to property , means that the market is more open to investors from countries where home ownership is traditionally prioritized , most notably Italy , Spain , and Greece .
In fact , Berlin really began luring international investors in 2005 when Italian and Scandinavian investors bought up large amounts of residential real estate in former East Germany for refurbishment and subleasing .
Opportunists were deterred by the fact that a building owner may not , without significant tax loss , resell a building within ten years of buying it . So , the prospect of the bubble bursting , as in the US , is unlikely due to the stable and sustained nature of price increases .
The difference in real estate prices between Berlin and other German cities , like Munich and Hamburg , is remarkable . Dr . Schulten explains that historically , Munich ’ s Marc Schulten
26 DORCHESTER April - 2013