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.

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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.

Link to Article

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.

Link to Article

Berlin identified as the top five ‘opportunity’ markets for expansion of the serviced apartment sector across Europe

Dublin ranked Globally for serviced apartment sector

International real estate advisor, Savills have identified Dublin, Stockholm, Amsterdam, Berlin and Barcelona as the top five ‘opportunity’ markets for expansion of the serviced apartment (also known as the ‘Extended Stay’) sector across Europe.

Dublin, Stockholm, Amsterdam, Berlin and Barcelona were all ranked highly due to them having sizeable corporate and overseas visitor markets with strong outlook in terms of GDP and employment growth. But more importantly they also had very constrained stock levels relative to their overnight visitor market.

According to Savills, €416.5m was invested into Europe’s Extended Stay sector in 2015, a year-on-year increase of 32.9%.

The majority share (90%) was invested into the UK, with Germany (7%), Switzerland (2%) and Belgium (1%) at the forefront of activity within what is a relatively immature asset class on the continent.

In order to identify the new opportunity markets for this sector, the Savills research team analysed the following factors within a matrix of 35 European cities – the presence of large corporates, GDP and employment growth forecasts and overnight visitor market and supply drivers (current stock relative to overnight visitor including that of hotels) for the sector.

Commercial research director at Savills, Marie Hickey says, “We anticipate that evolving consumer trends of millennial business travellers and the success of AirBnB in highlighting alternative accommodation options, such as Extended Stay, across Europe will help the sector further tap into existing unmet demand.”

Source: Link to the Business World’s article

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

Bundesbank sees property overvalued in German cities, but no bubble

Residential property prices in German cities are overvalued by 10-20 percent, and even more in some quarters, but there is no property bubble threatening the entire financial system, Bundesbank chief Jens Weidmann said.

“For Germany as a whole, there is no discernible substantial over-valuation of residential property,” Weidmann said in the text of a speech for delivery in Munich on Wednesday.

Germany did not face the risk of a property bubble as credit growth was not particularly dynamic, and most banks remained fairly conservative in their loan issuance.

But Weidmann said residential property price rises in Germany in recent years had been concentrated in cities, particularly large cities like Munich, and these prices were now significantly over-valued.

“We estimate that prices are between 10 and 20 percent above the values that would be fundamentally justified,” he said, adding that over-valuations were even greater in popular areas of big cities.

“In summary, one can say of the German property market: vigilance is absolutely appropriate, but alarmism is unwarranted.”

Source – http://www.reuters.com/article/2015/03/25/germany-bundesbank-property-idUSL9N0P701R20150325

Berlin is a ‘no-brainer’ for British property buyers

It’s been 25 years since the wall came down – and Berlin is now better known for being an edgy and vibrant global capital with an interesting historic and cultural legacy.

Amid majestic historic architecture, newly gentrified communist apartment blocks and staid buildings from the Third Reich, the Berlin skyline is forested with construction cranes. Massive capital projects such as a much-delayed new airport are taking place alongside any number of more modest commercial and residential projects.

“The residential sector runs relatively smoothly for new construction,” according to Thomas Zabel, CEO at Zabel Property Group. “Although the procedure for building permits can be lengthy, property prices are buoyant.”

The economic think tank Institut der Deutschen Wirtschaft reports that newbuild apartment prices in Berlin rose by 79 per cent between 2007 and the first quarter of 2014.

“By 2007, the first wave of foreigners who had come for pure property investment were well represented by the British,” said Mr Zabel. “Many Britons fell in love with the city, returned often and eventually moved here on a permanent basis. Nowadays they buy property less for investment and more to live because Berlin is such a young dynamic city for business and culture.”

Residential property is far cheaper than in Munich, the country’s most expensive city. “Today, demand in Berlin exceeds supply “ said Julius Stinauer, principal consultant at Jones Lang LaSalle, a real estate company.

The central district known as Berlin-Mitte is the most popular property destination for international buyers. “Seventy per cent of our Mitte clients are foreign and a substantial number of these are British,” observed Fiede Clausen, Zabel partnership manager. “Expats see quality of life, security and value for money as much better than in Britain. And regarding retirees, it’s a no-brainer for lifestyle and affordability.”

From central Mitte to its outskirts there are several new developments with expat appeal that cost from high-end millions down to relative affordability.

In the heart of Berlin-Mitte at the top end of the market is Palais Varnhagen [pictured above], designed by British architect Sir David Chipperfield. Forty-nine elegant apartments and massive penthouses with up to six bedrooms are priced from just under half a million euros up to €5.5million (£4.3million).

For buyers who seek ultra modern design, the 14-floor Living Levels [pictured below] is one of the Mitte’s last riverside projects to be given a high-rise building permit. Each of the three top floors has around 500 sq m of living space and 360 degree views. All 56 one to seven-bedroom units include state-of-the-art environmental features and cost €335,000 (£262,000) to €6 million (£4.7million).

In an up and coming area on the outskirts of Mitte, The Mile development features 270 one to three-bedroom apartments priced at €179,500 (£140,500) to around €1 million (£782,400). The development is close to the almost completed new Bundesnachrichtendienst (the German foreign intelligence agency HQ) and next to an art gallery. The above properties are available from berlin-capital.com.

Berlin is, unsurprisingly, a city of contradictions. While unemployment is high, though improving, the economy is growing faster than the German average. That widely anticipated but elusive post-1989 era of prosperity is finally materialising. Perhaps the time is nigh to consider Berlin as a prime expat property destination.

In Germany, Renters’ Rights Trump Guest Bathrooms

As the country follows France with hardline protections for lower-income renters, new laws prohibit some property upgrades. And for many Germans, that’s just fine.

While Paris’ radical new housing laws have been attracting attention, France’s capital isn’t the only city in Europe that’s been taking legal action to stop social displacement and gentrification. Across Germany, cities are increasingly bringing in rules that aim to ensure that rising rents in desirable neighborhoods don’t push working class residents out of their homes. Called milieuschutz—loosely translatable as “community defense”—these laws are drawing the battle lines in what might seem the most improbable place for an urban-development standoff: the bathroom.

Essentially, milieuschutz is a law to prevent a neighborhood’s real estate from getting too fancy. In the areas earmarked for protection, owners are either restricted or banned outright from adding new balconies, installing under-floor heating, or carving out guest bathrooms. They’re also not allowed to knock two smaller apartments together to form one big one. Decided on a street-by-street basis at local rather than national level, these laws aren’t actually that new: Hamburg first experimented with them in 1972, Munich in 1987. What is novel, however, is their rapid spread across Germany at a time when inner-urban real-estate prices are going through the roof. Berlin now has 18 zones protected by the laws, and has just doubled one in size. Last month, Munich introduced one more district, while Frankfurt pushed the boat out with a total of six new protection zones spreading across the city’s denser districts. The social-engineering intention is clear. As Frankfurt’s mayor Olaf Cunitz baldly puts it, “Using this urbanist tool, we want to put a brake on upgrading and displacement and thus secure existing living space.”

(Full Story – http://www.citylab.com/housing/2015/01/in-germany-renters-rights-trump-guest-bathrooms/384219/)

High demand for German real estate, but price growth slows

Demand for German residential real estate is still robust, but the pace of rising prices is easing, an investment specialist said Friday.

Stefan Mitropoulos, an analyst at Helaba, a major bank in Frankfurt, told dpa the market was being driven by Germans eager to invest.

“The low interest rates for housing finance mean that buying property remains affordable, even after prices have risen,” he said, adding that near-zero returns on fixed-interest investments continued to push wealthy Germans towards real estate as the best alternative.

Germany‘s rising prices have contrasted with the cooldown in China‘s real estate market, where tumbling prices this year brought a multi-year property bubble to an end.

Signs have been growing in recent weeks that the German economy is growing again after narrowly avoiding a recession in the third quarter, when it grew by a meagre 0.1 per cent.

The Bundesbank, Germany‘s central bank, said in its November report that residential property in Germany‘s seven biggest cities had gained an average 5.75 per cent in value on an annual basis in the third quarter, an easing from 7 per cent in the first half of this year and 9 per cent last year.

Mitropoulos forecast that residential price rises would continue in 2015, noting that the European Central Bank (ECB) has set its prime interest rate at 0.05 per cent. He said ordinary Germans can now pick up 10-year mortgage loans at 1.7-per-cent annual interest.

Commercial property value in Germany has been less robust but has been buoyed by residential prices, Germany‘s Deutsche Bank said.

“German residential property remains affordable and there is anecdotal evidence that both foreign and institutional investors are being drawn to the German real-estate market,” Deutsche Bank said in a market overview last month for its customers.

The bank added that German residential real estate prices have risen 20 per cent in the past five years nationally, while prices in the big cities, where land availability is limited, had risen by more than 40 per cent in that time.

(Source – http://en.europeonline-magazine.eu/expert-high-demand-for-german-real-estate-but-price-growth-slows_369407.html)

German Residential Property Prices Rise Most in a Decade

German home prices rose at the fastest rate in at least 10 years in the third quarter as investors bought apartment buildings at a time when low interest rates make other investments less attractive.

Values climbed 5.2 percent from a year earlier, with multifamily houses gaining 7.2 percent, according to an index published today by the VDP Association of German Pfandbrief Banks. Prices for owner-occupied condominiums gained 2.6 percent as momentum in that market slowed following bigger gains in the previous three years.

Apartment buildings “continue to be sought after by institutional and private investors alike,” said Jens Tolckmitt, VDP’s chief executive officer. “The very low interest rate and the resulting search for attractive yields on investment support this trend.”

Investors are drawn to Germany’s reliable rental income and potential for further property-price gains at a time when fixed-income markets offer low yields. Low interest rates also make it cheap for buyers to take out mortgages.

Rents on new leases in apartment buildings rose 4.6 percent in the third quarter from a year earlier, VDP said.

Stocks Records

Listed residential landlords, such as Deutsche Annington Immobilien SE and Deutsche Wohnen AG, have benefited as shareholders bought the most property stocks ever this year, according to data compiled by research firm Barkow Consulting GmbH. German property companies have sold a record 4.1 billion euros ($5.1 billion) of shares this year, 15 percent more than in all of 2013, the firm said.

The FTSE EPRA/Nareit index of German property stocks has climbed about 25 percent this year, compared with a decline of about 3.5 percent on the benchmark DAX Index. (DAX) Deutsche Annington, Germany’s biggest listed landlord, has gained 39 percent this year in Frankfurt trading.

Investors seeking stable returns are also buying office properties. Office values climbed by 3.7 percent in the third quarter, while office rents rose 1.8 percent, according to VDP. Commercial properties are attracting professional investors with large cash reserves, including pension funds and sovereign-wealth funds.

Buyers acquired 25.5 billion euros of commercial properties in Germany in the first nine months, the most since 2007, according to Jones Lang LaSalle Inc. (JLL)

VDP collects price data from mortgage contracts signed across Germany by more than 30 member banks, which include Deutsche Bank AG, Commerzbank AG, Banco Santander SA (SAN) and ING Groep NV. (INGA)

(Source – http://www.bloomberg.com/news/2014-11-17/german-residential-property-prices-rise-most-in-a-decade.html)