Berlin Workers seeking Home away from Home

Short term employment contracts on the rise as Berlin booms
Millenial contract workers seeking home comforts face reduced options since AirBnB ban

An interesting survey was recently conducted by a travel expenses company showing that alternative options for business travel were becoming increasingly popular and that Berlin was the fifth most popular business travel destination across all cities in the UK, France and Germany.

Given that we are in a day of disruptive innovation, it is no surprise that workers, as much as tourists, want to stay in less conventional accommodation or locations when they travel and use platforms such as AirBnB to find them.

It might be for the home comforts of a bedroom, lounge and kitchen or to get a better sense of the area in which they’re staying. It may simply be to save money. Unfortunately for Berlin, these options have been on the decline since the restrictions brought in last year, making it harder for short term contractors looking for a home away from home.

There is a real possibility that the city of Berlin will become the victim of this change. It’s a burgeoning city with falling unemployment, a rising population, strong educational facilities and significant investment into the city’s infrastructure. The tech companies are arriving and booming, new industries are opening up; as a united city it is still in its infancy, but we mustn’t forget that it is a capital city and to fuel its growth it needs to provide flexible solutions to maintain social mobility and give entrepreneurial companies the opportunity to grow.

This means, as much as anything, providing affordable accommodation for short term workers, often drafted in to fill skills gaps for specific projects or corporate objectives. The recent survey made it clear that whilst hotels were still popular, the demand for alternatives from Millenials in particular, is driving a booming market in alternative business accommodation.

Hotels, as much as they try to evolve, still lack basic home comforts. Hotels will forever sit firmly on the side of tourism and short-term travel, not residence, and many young contract workers want to feel as if they are living in the real Berlin, in a comfortable apartment that has been furnished like home, with their own food in the fridge, neighbours to speak to and local amenities to enjoy. If Berlin doesn’t fill the gap in supply for such accommodation, Berlin’s industries will struggle to bring in the talent they need for the time they need it. Six months of living in a hotel is not what many workers want these days, not to mention the exorbitant cost for the company.

Companies like AirBnB have launched into business travel successfully but Berlin’s restrictions are making it harder for the city’s companies to house short term workers. The situation is exacerbated by the fact that many landlords are seemingly unaware of the option available to them to provide short term, furnished accommodation to the city’s workers through alternative means, such as Buy Berlin’s Corporate Furnished Service.

If landlords fully furnish their apartments, they can be rented out to companies seeking fixed, short term rental contracts for their employees. The tenancy agreement is different to your standard tenancy, allowing landlords to have more control over their property and the rental price. It is a highly successful model that benefits all parties involved and is proving particularly popular in city centre districts and those located near to major project hubs, such as the airport.

BuyBerlin

Buy Berlin Investments is an independent property company that provides turnkey services to global investors, both individual and institutional, who wish to purchase real estate in Germany’s capital city, Berlin.

Established over ten years ago, the company recently expanded into Asia with the opening of its Hong Kong office, providing on the ground customer service in English, German and Chinese.

BuyBerlin supports its clients every step of the way – it seeks the very best properties, assists investors through the intricacies of financing, taxation and German legalities, and provides ongoing asset management in the form of property management, rentals, furnishings and eventual resale.

Berlin’s AirBnB landlords find alternative option for lettings

Corporate furnished letting service is ideal for landlords with city centre apartments affected by the crackdown on short term rentals
Tenancy contracts from three months plus higher yields make this an attractive alternative


It has been nearly nine months since the Berlin government initiated a ban on the majority of short term rentals in the country’s capital. The ban was deemed necessary to help manage what was seen to be Berlin’s escalating rental prices and to support the city’s hotel industry, for which the likes of AirBnB and Wimdu were getting the blame.

With approximately 12,000 rooms available at the time, the vast majority were concentrated in the most popular districts of Berlin, the same areas where many short term workers seek convenient apartments whist working in the city.

Darrell Smith, founder and director of estate agency Buy Berlin, explains that workers who are forced to stay in hotels or serviced apartments for the duration of their contract are the ones suffering the most from this change. “Having a place to stay that feels like home when you’re working in different cities around the world is what online platforms such as AirBnB were so effective at supplying. Despite the new legislation, these apartments can still be made available. What many landlords do not realise is that they can offer their furnished apartments to professional tenants on a short-term basis without facing the rental price restrictions of long-term contracts and can earn considerably more income as a result.”

There are significant benefits to this model; landlords can charge whatever rent they feel is appropriate. As an example, a typical one bedroom apartment of 55 square metres would generate EUR1,375 per month, nearly double what an equivalent unfurnished apartment would fetch. The contracts can be from three months to one year and the rent is packaged with a mandatory monthly clean, which the tenant must pay for.

Buy Berlin has seen a sharp increase in enquiries for corporate lets as Berlin continues to grow as an economic powerhouse, drawing in more business and more people. Smith continues, “Expatriates are looking for centrally located properties which are renovated or in very good condition and vary in size from 30 square metres to 100 square metres. Typically they work for multinational companies (CAC 40, Fortune 500) that often pay the rent for the tenants. We also work with relocation companies on behalf of their clients, and film companies are frequently in contact given that Babelsburg film studio is so near to Berlin.”

The most popular apartments are those found in the most centrally located districts such as Mitte, Prenzlauer Berg, Friedrichshain, Kreuzberg, Charlottenburg and Wilmersdorf.

Berlin’s AirBnB Vermieter finden eine Alternative

Möblierter Vermietungsservice für Berufstätige ist ideal für Vermieter mit City-Center-Wohnungen, die von der Regulierung kurzfristiger Vermietungen betroffen sind.
Mietverträge ab drei Monaten und höhere Erträge machen dies zu einer attraktiven Alternative.


Es ist nun fast neun Monate her, seitdem die Berliner Regierung ein Verbot fast aller kurzfristigen Vermietungen in der Bundeshauptstadt ausgesprochen hat (Zweckentfremdungsgesetz). Dieses Verbot wurde als notwendig angesehen, um dabei zu helfen, die Hotelindustrie der Stadt zu stützen und die Berliner Mietpreise zu regulieren. Hierbei wurde in der Hauptsache die Nutzung von bereits jetzt schon zu knappen Wohnraum für kurzfristige Vermietungen, z.B. an Touristen unterbunden, für deren Eskalation unter anderem die Vermietungsportale AirBnB und Wimdu mitverantwortlich gemacht wurden. Das große Ziel dieses Gesetzes soll sein, den vorhandenen Wohnraum auch allen Mietern langfristig zur Verfügung zu stellen, um so den chronischen Wohnraummangel in Berlin einzudämmen.

Die überwiegende Mehrheit der zur damaligen Zeit etwa 12.000 verfügbaren Zimmer konzentrierte sich auf die beliebtesten Bezirke Berlins und wurde größtenteils an Touristen vermietet. Diese Gebiete sind die Gleichen, in denen viele Pendler möblierte Wohnungen während ihrer Beschäftigung in der Stadt suchen.

Darrell Smith, Gründer und Direktor des Immobilienbüros BuyBerlin Investments, erklärt, dass Berufstätige, die für die Dauer ihres Arbeitsverhältnisses gezwungen sind, in Hotels oder möblierten Wohnungen unterzukommen, diejenigen sind, die am meisten unter dieser Veränderung leiden. “Einen Raum zu haben, der sich wie ein zu Hause anfühlt, wenn man in verschiedenen Städten auf der ganzen Welt arbeitet, ist, was Online-Plattformen wie AirBnB so gezielt anbieten können. Trotz der neuen Gesetzgebung können diese Wohnungen noch verfügbar gemacht werden. Was viele Vermieter nicht wissen, ist, dass sie deutlich mehr Einnahmen erzielen können, indem sie ihre möblierten Wohnungen kurzfristig berufstätigen Mietern anbieten, ohne dabei von Mietpreisbeschränkungen langfristiger Verträge betroffen zu sein.”

Es gibt erhebliche Vorteile für dieses Modell, unter anderem können Vermieter jegliche Miete verlangen, die sie als angemessen betrachten. Als Beispiel würde eine typische Ein-Zimmer-Wohnung mit einem 55m² Schlafzimmer EUR 1.375,00 pro Monat Miete kosten; fast doppelt so viel als eine gleichwertige unmöblierte Wohnung kosten würde. Die Verträge können von drei Monaten bis zu einem Jahr dauern und der Mietvertrag kann auch eventuelle Service-Leistungen, wie z.B. eine obligatorische monatliche Wohnungsreinigung, für die der Mieter zu zahlen hat, enthalten.

BuyBerlin Investments verzeichnet einen starken Anstieg von Anfragen für Vermietungen an Berufstätige, während Berlin weiterhin als wirtschaftliches Zentrum wächst, welches immer mehr Unternehmen und Menschen anzieht. Smith fährt fort: “Auch Auswanderer suchen nach zentral gelegenen Immobilien, die renoviert oder in sehr gutem Zustand sind und in der Größe zwischen 30m² bis 100m² variieren. Meist arbeiten diese für multinationale Unternehmen (CAC 40, Fortune 500), die oft die Miete für Ihre auswärtigen Angestellten zahlen. Wir arbeiten hier z.B. mit Umsiedlungsgesellschaften, die im Namen ihrer Kunden agieren, aber auch Filmfirmen sind häufig mit uns in Kontakt, da das Babelsberger Filmstudio so nah an Berlin ist.”

Die beliebtesten Appartements liegen in den zentral gelegenen Bezirken wie Mitte, Prenzlauer Berg, Friedrichshain, Kreuzberg, Charlottenburg oder Wilmersdorf.

Rent rises turning investors to German property, says agency

As demand for German property shifts with more renters looking to buy, international investors are also showing more interest in the market, says a top overseas agency.

With rents in Berlin rising 9% in and low purchase options of around €100,000, there is interest from worldwide buy-to-let investment, says Property Frontiers.

“We’re experiencing a real upturn in demand from investors for property in Germany and in particular in the capital. As the Berlin market shifts its focus, international investors are seeing a new and realistic exit strategy open up before them. Combined with the stability of Germany as an investment prospect, Berlin has quickly become one of the most exciting residential property investment destinations in Europe.”

Germany – and in particular Berlin – has been a nation of renters for decades. Just 18% of the city’s residents are owner-occupiers due to the housing subsidy legacy of the old East German government, according to agent, Buy Berlin.

Across the country, ownership remains low, with only around half of Germans owning a home. The only country with a lower home ownership rate in Europe is Switzerland.

A national shift in perspective means increasing numbers of renters are becoming buyers, giving the property market a new lease of life.

Berlin2As the housing market takes on a new dynamic, buy-to-let properties like Stadtpark Steglitz, pictured,  have become increasingly appealing, with the more active market offering a realistic exit strategy says Frontiers’ Ray Withers. Studio, one, two and three bedroom apartments there start from €109,600, with gross yields of up to 5.6%.Rent rises are one of the factors behind the new German interest in buying property. According to Jones Lang LaSalle, rents in Berlin have risen from €5.50 per square metre in 2005 to €9 per square metre in 2014. From 2013 to 2014 alone, rents rose by more than 9%. While Berlin has responded by introducing a rent cap, many tenants have already had their heads turned by the prospect of property ownership.

Continuing low interest rates across Europe and Eurozone-related uncertainties have also caused many Germans to look at buying property, as they seek out the best ways to make their savings work for them in this post-Great Recession world.

Andrew Groom, of JLL, says, “We’re at the start of a re-pricing period of anywhere between two to five years. Prices in Germany have tended to be stable for long periods of time, and have then been driven by bigger macro-economic political events. We’re going through a macro-economic situation now, which is driving Germans back into bricks and mortar.”
Read more at http://www.opp.today/rent-rises-turning-investors-to-german-property-says-agency/#w67AtTjRAd4L7IIu.99

The Secrets of Soho House Berlin: Lessons in Colorful Real Estate

In the five years since its 2010 opening, Berlin’s iteration of Soho House has become a major Central European roadhouse. The signature loungy-luxe details honed by Soho House founder Nick Jones, 52, since he opened his first Soho House in 1995—in Berlin’s case, the tidy little roof pool, the fireplace with its art-directed logs, the Vegas-style couches and day beds for extra-louche group lounging—all conspire mischievously to imply that the authorities, such as your momma, your significant other, or, in a celebrity’s case, a howling pack of street-dog paparazzi would have a really hard time finding you enjoying the place with whomever you choose.

This is a very profitable and fantastically marketable lodging idea. Although the traditions of it hark back to the 12th century Knights Templar and the London guilds and clubs, its authors in the late 20th century in the U.S. are the disco-magnate-turned-hotelier Ian Schrager (Morgans) and the dater-of-Uma-Thurman Andre Balasz (The Mercer, The Standard). In this market, Mr. Jones, of the UK, is a relative latecomer. (read more here…)

IREIT Global buys Berlin property for S$217.7m; undertakes rights issue to fund deal

Singapore-listed IREIT Global Tuesday said that it had reached a deal to acquire a property in Berlin for 144.2 million euros (S$217.7 million), marking its first acquisition since its initial public offering.

The property is located in the district of Lichtenberg, and the company said this place had been witnessing a strong growth of both commercial office development and occupancy demand.

The property comprises two fully connected building sections of 8 storeys and 13 storeys, respectively, the company said in a statement.

It is located six kilometres east of Berlin’s city centre and near the Media Spree area, which is popular with internet, media and technology companies.

IREIT said it was was attracted to this property due to the strong principal tenant – Deutsche Rentenversicherung Bund –  a federal pension fund and the largest of the 16 federal pension institutions in Germany, and the opportunity for rental and value growth in this increasingly popular location. The principal tenant DRB occupies 98.8% of this property’s total lettable area on a lease expiring in June 2024 and contributes 99.6% to its gross rental income.

Choo Boon Poh, Chief Financial Officer of IREIT said, “As part of our strategy, we intend to fund the acquisition through a mix of equity and debt. IREIT has announced a rights issue to raise gross proceeds of approximately S$88.7 million. The balance of the funding for the acquisition will be through a bank loan facility, from which it intends to draw down a gross amount of approximately €102.0 million.”

With this acquisition, IREIT’s total portfolio value will increase significantly to €438.0 million (S$661.4 million) from €290.6 million (S$438.8 million).

Regarding its renounceable rights issue, it will offer 189.6 million new units at 46.8 cents, and shareholders will be entitled to subscribe to 45 rights shares for each 100 shares held.

Tong Jinquan, Lim Chap Huat and IREIT Global Management who own a total of about 76.5% of the existing units have demonstrated their commitments by subscribing to their allotment of rights units, the company said.

The REIT closed 0.5 cent higher at 80.5 cents on Monday.

As of 31 March 2015, IREIT Global’s portfolio comprises four freehold properties in Germany valued at approximately €290.6 million (S$438.8 milion). The four properties are located in the key German cities of Bonn, Darmstadt, Münster and Munich with net lettable area of about 121,506 sqm and 2,945 car park spaces.

(source – http://www.dealstreetasia.com/stories/ireit-global-buys-berlin-property-for-s217-7m-undertakes-rights-issue-to-fund-deal-8502/)

Berlin roars up ‘best city’ rankings

Hamburg, Munich and Berlin all appeared in the 25 most liveable places on the planet in elite magazine Monocle’s 2015 rankings. Berlin shot further up the charts for the second year running.

While Hamburg and Munich slipped back one place each to 21 and 9 respectively, Berlin once again rocketed up the charts to come in as the 3rd most liveable city in the world.

But the strong German showing put it in a class with Japan as the only two countries to have three cities in the top 25 – considerably better than the 0 scored by the United Kingdom and the one entry at the bottom of the rankings for the United States.

Monocle’s annual Quality of Life survey ranks cities around the globe according to factors including climate, architecture, crime rate, environmental issues, food and drink, business and design.

While some of the data is scientific, other measures are more subjective and the magazine’s editor in chief Tyler Brûlé said on Thursday the judges employed a change in the metrics in 2015 which included how much influence the state has over everyday life in different countries.

“We’ve given extra marks to cities that limit their nannying and we’ve tried to give value to places where there’s something else we know is vital: freedom, grit, independence, a joy with life,” he was quoted as saying by the website Skift.

“We’re frustrated with city councils that are too quick to say no, places where parents never let their children run free and capitals that seem opposed to the odd late night out.”

(Read more here – http://www.thelocal.de/20150612/berlin-roars-up-best-city-rankings)

Berlin becomes first German city to make rent cap a reality

Berlin has become the first city in Germany in which rent-control legislation has come into force in a bid to put the breaks on some of the fastest rising rents in Europe.

From Monday, landlords in the capital will be barred from increasing rents by more than 10% above the local average. Such controls were already in place for existing tenants but have now been extended to new contracts.

“The rent ceiling is very important for Berlin because the difference between the rent paid in existing contracts and new contracts is so high,” said Reiner Wild, managing director of the Berlin Tenants’ Association. “The other problem is that we have 40,000 more inhabitants per year. Because of this situation the housing market is very strong.”

Berlin is pioneering the rent cap after the national parliament approved the law, aimed at areas with housing shortages, in March. Berliners say flat-hunting is becoming increasingly competitive.

“We were looking for the best part of a year,” said Vlasis Tritakis, a student. He, his partner Sofia and their 18-month-old son moved out of a flat-share into a one-bedroomed apartment in the district of Kreuzberg in April.

But sooner or later they will have to find a place big enough for his son to have a room of his own. They say they don’t stand much of a chance against competition from potential tenants with better finances. “I don’t know how we will do it,” said Tritakis.

Although rents are still low compared with other European capitals, Wild says it is vital to keep the city affordable for lower-income residents. “We don’t want a situation like in London or Paris,” said Wild. “The reality in Paris or London is that people with low income have to live in the further-out districts of the city.” (read more)

Germans turn their backs on renting with new property boom

Is German property set to soar? On 13 June, Phoenix Spree Deutschland floats in the UK, giving armchair investors instant exposure to German real estate especially in Berlin.

German real estate has a slightly flat investment reputation. When the Wall fell, general optimism spilled over into property. A mini bubble grew, then got stuck. It was thought that corporations would move to Berlin. They didn’t. Decline set in.

Phoenix took flight when a group from UBS began investing in Berlin. Soon, others wanted to chip in. “We left UBS in 2006 and raised about €90m from high-net worth investors,” says Mike Hilton, fund manager at Phoenix.

Read more here – http://europe.newsweek.com/german-property-set-soar-fund-floats-london-327759

Checkpoint Charlie Sites Said to Be Sold to Berlin Developer

The last development sites at Checkpoint Charlie, the most famous border crossing between former East and West Berlin, are being sold after years of laying fallow, three people with knowledge of the deal said.

Trockland Management GmbH, a local developer agreed to buy loans on the two plots in the city center from Irish bad bank National Asset Management Agency, said the people, who asked not to be identified because the sale is private. Trockland will pay about 85 million euros ($95 million) and plans to build mostly homes, in addition to stores and a hotel, two of the people said.

A representative for Trockland declined to comment. A spokesman for NAMA didn’t immediately respond to a request for comment.

Checkpoint Charlie was a border crossing in West Berlin controlled by the western Allies — the U.S., U.K., and France – – until the opening of the Berlin Wall. Since German reunification, the site has become a tourist attraction where hawkers in G.I. costumes charge for photos and souvenir shops sell fake Berlin Wall fragments. Tenants in the area include Starbucks Corp., a Michelin-starred restaurant, and a sausage museum.

The plots, one on either side of upscale shopping street Friedrichstrasse, have a total of 9,100 square meters (98,000 square feet), according to to BNP Paribas Real Estate, the broker that marketed the properties.

Dublin-based Cannon Kirk bought rights to develop the land in 2007, and during the financial crisis, Ireland’s bad bank National Asset Management Agency took over the debt, BNP said in September.

A spokeswoman for BNP declined to comment.

The area abuts two of Berlin’s most expensive neighborhoods: Mitte and Kreuzberg. Twenty-six years after the fall of the Berlin Wall, the little remaining wasteland that once separated East from West is still prized by investors because it’s centrally located.

(Original Article – http://www.bloomberg.com/news/articles/2015-05-05/berlin-s-checkpoint-charlie-sites-said-to-be-sold-to-a-developer)

German property über alles

Is your home your castle or just the place where you live? The British are well known for being a nation of beloved homeowners, but that aspiration rarely comes without chalking up a spot of personal debt in the process.

Embarking on a hefty mortgage for the best part of a person’s working life is likely to cause most people a sleepless night or two. Germans tend to be significantly less focused on the home-ownership goal and are much happier to rent.

According to our research, Germany has an owner-occupation rate of just 44 per cent – the lowest ratio in Europe, after Switzerland. The German residential sector is heavily regulated, meaning that rents are more affordable in comparison to other European countries; in general, housing costs, including heating, represent only 20 per cent to 23 per cent of net household income. Demand is high for rental properties and this is providing good opportunities for investors. Here are a few reasons why we like this sector.

In comparison to other countries, German house prices have shown the lowest levels of growth and volatility over the last 20 years. Although there has been sharp growth in the past three years, this follows a long period where prices were extremely stable. German house prices are currently only 6 per cent higher than they were in 1994, in comparison to the UK where they are three times higher. As a result, good investment opportunities are still relatively easy to find.

Germany has a mature population and it continues to grow. Population growth has accelerated in recent years – with net migration of 400,000 people in 2013 alone – as strong economic growth has encouraged immigration from other parts of Europe. At the same time, the German population is becoming increasingly urbanised, with the major cities growing much faster than the national average. Berlin, for example, has had positive net migration of 200,000 people (100,000 households) since 2005, while only 40,000 new homes have been built over that period.

German households have benefited from the country’s strong economic position: unemployment was just 6.3 per cent in October 2014 and the workforce is at an all-time high. Net salaries have been growing as a result. Attitudes towards debt, meanwhile, remain very conservative. German households have some of the lowest debt levels in Europe at just 160 per cent of gross domestic product – the UK is 204 per cent, the Netherlands is 252 per cent and Sweden is 295 per cent. And while Germans are not keen on taking on big mortgages, they also have much more limited access to finance. The prevalence of loans available to low-income families or high loan-to-value mortgages remains limited, and buy-to-let levels are negligible in comparison to the UK, for example. We believe that these limitations have helped prevent the strong speculative appreciation in prices that we have seen in other countries.

Original Article – http://www.ftadviser.com/2015/04/16/mortgages/mortgage-products/german-property-uber-alles-Uj0GJL4BoM4yYTB2EbGUBJ/article.html