Whenever I tell people I am from Germany, I get this one reaction: “Oh really? I went to Berlin once, I loved it!” And ever so often, I meet people, who tell me their dream is to live in Berlin for a while. I have to admit, I am not mad about Berlin (living there I mean, I love visiting it), for me it’s just a bit too hipster and a bit too big but I obviously still wonder what does make Berlin so attractive to people all over the world and also all around Germany? I was thinking about what I like when I come visit and I was also talking to some people who actually moved to Berlin for a while. And here are some of the reasons I figured out.
Felix Petersen, managing director of Samsung Next Europe, reportedly says that his company will not set up its headquarters in London. It’s just “not a fun place to live unless you are really rich”, is the rationale. Instead, Petersen and colleagues will set up shop in Berlin, hoping to find a home that is both far more enjoyable and affordable.
As a Berliner, I can give Petersen some idea of what he can expect.
Certainly, there are things to say about London, where I lived for 14 years before moving to Berlin. The last time I was there, very recently, a signal failure saw the cancellation of all trains between Paddington and Slough in the very middle of rush hour. No rail replacement bus services were arranged: people were simply expected to trek home with the aid of suddenly exorbitant taxi fares. For one of the most expensive transport systems in the world, there didn’t seem to be much bang for your buck. It seemed to be a fitting metaphor for a town apparently desperate to become Geneva-on-Thames.
One can see why Petersen’s eye might settle on Berlin, for it has long been seen as a mecca for tech startups, with its lower costs allowing them to recruit and retain young talent. Samsung’s arrival may mark a greater maturity of that market, allowing younger companies to rebase in a capital more easily accessible than London or San Francisco.
Petersen and colleagues will find much to love in Berlin. There are parks, lakes and forests within a short train ride, nightclubs on which the sun never sets. There are theatres, food markets, streets of endless bars.
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With Berlin’s plethora of life science research and academia, opportunities abound for biotech entrepreneurs. Here’s how the city bridges the gap between science and business!
So much research, so many opportunities for academics and entrepreneurs. Berlin boasts 35 large research institutions focused on life sciences, and around 130 hospitals — including Europe’s largest and most renowned university hospital, Charité. The research clout of Berlin described through quantity is impressive on its own, and the city has the quality to match.
Two German institutions dominating the Nature Index as some of the most prolific publishers in the magazine count with institutes in Berlin: the Max Planck Society, number four on the list, claims Institutes of Infection Biology and Molecular Genomics, and the Helmholtz Association, number eight, has the Max Delbrück Center for Molecular Medicine. In fact, our editor, Evelyn, was inspired by Berlin’s top-notch research to move here from New York City for a PhD in chemistry and chemical biology at the Freie Universität!
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An effort to limit damage done to the Cold War landmark by tourists.
Souvenier-seeking tourists have done serious damage to the Berlin Wall, leaving Germany with no choice: A wall in front of the wall will be erected in summer 2018, to protect the landmark structure from further vandalism, reports the Art Newspaper.
This isn’t the first time the idea of a protective barrier in front of the Berlin Wall has been raised. In November 2015, authorities of Berlin’s Friedrichshain-Kreuzberg district, home to the “East Side Gallery” section of the wall, which is covered in murals created in 1990, announced plans to erect a permanent protective fence.
The wall, a designated heritage site, was erected in 1961, dividing citizens of West Berlin from the rest of the city and the surrounding East Germany until November 9, 1989. The wall began coming down in June 1990, but parts of the structure were left intact as a monument.
By Elisabeth O’Leary
GLASGOW, Scotland Oct 15 (Reuters) – Scotland will set up a trade office in Berlin, boosting its trade departments in readiness for all possibilities, including Scottish independence, after Britain leaves the EU, First Minister Nicola Sturgeon will say on Saturday.
The Scottish National Party leader has raised the nation’s profile since June’s European Union referendum in Britain, seizing on a new openness towards Scotland in Europe since most of its population voted to remain in the bloc.
Britain as a whole, however, voted to leave, a clash which has reignited talk of a split between Scotland and the rest of the United Kingdom, even though Scots rejected separation just two years ago.
“Creating jobs, expanding the economy and growing tax revenues – these priorities must be at the centre of everything we do,” Sturgeon will tell the SNP conference at its close, according to a draft of her speech.
She will add that economic stability is threatened by the prospect of the UK leaving the European single market, taking Scotland with it. Scotland wants to keep as many of the advantages of single market membership as it can, even if Britain leaves, and is looking for a bespoke deal with London to do so.
British ministers have suggested that the UK could leave the EU’s single market for goods and services to let them reimpose stronger control over their borders. The comments have driven the pound to its lowest level in three decades.
Sturgeon will say that in order to protect business in Scotland, the devolved government will set up a board of trade, a new trade envoy scheme, expand its Scottish enterprise agency and establish a Scottish trade hub in Berlin.
Business minister Keith Brown has said that he has seen a more neutral stance from businesses who were opposed to independence in the past but are supportive of Scotland’s desire to stay in the single market.
“After the (political) mess that has followed the (Brexit) vote, business is desperate for clarity and leadership,” Kate Forbes, a Scottish lawmaker at the conference, told Reuters.
She said that businesses are positioning themselves for all options after Brexit.
Sturgeon announced on Thursday that the Scottish government would publish a blueprint next week for a possible new independence vote. However, she has not said if or when the bill would be presented formally to the Edinburgh parliament.
Support for independence has barely moved since Scots rejected it by a 10 point margin two years ago. But the conference supported a motion on Friday which said Scotland “should prepare for a second independence referendum and seek to remain in Europe as an independent country.” (Reporting by Elisabeth O’Leary; Editing by Andrew Bolton)
By Mike Hilton
It’s easy to forget quite how young Berlin as a capital city is. It is still less than 30 years since the demolition of the Berlin Wall, a defining moment in modern European history, perhaps matched only by the UK’s decision to leave the EU.
Since then, the city has grown rapidly: the economy, employment and income have accelerated, with little signs of slowing down as shown by Property Week’s recent report into the city’s post-Brexit opportunities.
Now firmly entrenched as the country’s political centre, business is growing in all sectors, helped by an increasing culture of entrepreneurship.
This has led to strong employment growth which is outstripping the rest of Germany and causing many to flock to the city. Last year Berlin’s population grew by 47,000 and this year is set to eclipse that with 42,000 moving to the city in the last six months alone.
This influx of people, 60% of which were from other European cities, has put even greater pressure on the supply of housing in the capital and a significant supply-demand imbalance now exists.
There are other factors adding to this shortage of housing; in Berlin there is a clear trend towards single person, rental households with an average of 1.8 people per apartment, with around 80% renting. If you were to combine this with the population growth, the calculated new demand sits at around 20,000 new units per annum in order to satisfy the city’s needs.
Slow rate of supply
However, since the early 1990s, there has been virtually no privately financed construction and the rate of new supply continues to fail to meet the considerable demand for homes. 7,000 units were built in multi-family homes in 2015, the majority of which were condominiums at higher price levels.
Condominium prices have doubled since 2010 and by almost 10% in the last year to €3,320. Both are still far below the price levels of other European cities, with a lot of catching up to do – rents for example are still only a quarter of the price they are in London.
Over the last eight years that Phoenix Spree have been investing in Berlin’s residential market, there has been considerable investor interest in the market, attracted by the mix of stable income growth, the potential to modernise and to capture the uplifts from reversionary rental growth as well as the opportunities for increased returns provided by sub-dividing multi-apartment assets for condominium sales.
However, the market remains very fragmented as many buildings remain in private ownership and in need of extensive refurbishment. This, combined with the potential for growth, property values below the cost of construction, underpinned by low interest rates, investor interest remains healthy. It’s no surprise.
Berlin, after years of relative inactivity, is still healing from the effects of its reunification, but is one of the most exciting European cities.
Three months after Britain’s vote to leave the EU, seven firms are moving from London to Berlin
BERLIN—Singapore’s fintech firm WB21 Pte. has decided to move its European head office from London to Berlin, one of the first startups to quit the U.K. in favor of the German capital after Britain’s vote to leave the European Union.
“Brexit was decisive for us. We had initially planned to operate our European business out of London, but the decision means we lack legal certainty there,” said Chief Executive Michael Gastauer on Friday.
WB21, which launched late last year as a payment service provider, said it would create 200 jobs in Berlin that were initially slated for London. Of WB21’s current 25 positions in London, 20 will go to Berlin. The fintech startup, based in Singapore, offers accounts and international money transfers. As of mid-September, it counted 1 million customers and had sent cross-border payments totaling more than $5.2 billion.
The Brexit decision in June fed expectations that companies with U.K. operations could relocate to avoid losing access to the EU single market, and a number of cities began lobbying companies, including Frankfurt, Paris and Dublin. According to accounting firm KPMG, three-quarters of British chief executives are considering moving headquarters or some operations from the U.K. in response to the Brexit vote.
But an exodus hasn’t materialized, with most decisions pending the outcome of negotiations on the relationship between the U.K. and the EU, which have yet to begin. In addition to uncertainty about trade and business conditions, companies have questions about taxation, labor law and infrastructure elsewhere.
Berlin, which has focused on wooing startups, recently redoubled its efforts to attract companies from London. Right after the Brexit vote, the city’s economics ministry began lobbying hundreds of companies by email, and this month set up a contact office in London.
Three months after the vote, six companies have decided to move operations to Berlin, besides WB21, said Stefan Franzke, head of Berlin Partner, the agency that runs the London office. Among them are real-estate investment platform BrickVest Ltd, web-design company MBJ London Ltd., and finance firm Swissbank Ltd., he said.
The agency is in talks with about 40 other companies about possible relocation, he said.
WB21 expects to get a German banking license in the coming months, allowing it to expand its product portfolio and offer loans, savings accounts and investment products to clients internationally.
“Instead of going through the licensing process and building a bank in the U.K., and then in three or four years perhaps not knowing if we can use it Europe-wide, we decided to come to Berlin,” said Mr. Gastauer. He said Berlin was more attractive than some other places in Europe because Germany’s status as a founding member of the EU made it unlikely to abandon the bloc, he said.
The company called Berlin “one the fintech-friendliest cities in Europe” and said the availability of qualified personnel also made it attractive.
WB21, which stands for ’web bank 21st century,’ plans to invest €50 million in the German capital.
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Considering buying property in Munich? This report might make you think twice
Swiss investment bank UBS wrote in a new report on Tuesday that the Bavarian capital had the fifth most overvalued property market in the world, while also considering Frankfurt properties to be bad investments.
Vancouver was considered to have the biggest property bubble, followed by London.
The report examined 18 cities around the world and concluded that six of them were at risk of a housing bubble. Making up the rest of the top-six were Stockholm, Sydney and Hong Kong.
It noted that low interest rates in Europe had contributed to an “overheating” of markets for urban residential properties, particularly in London, Stockholm, Munich and Zurich.
“Germany’s economic boom and very expansionary monetary policy ended 20 years of real house price stagnation in 2010. Subsequently, Munich property prices rose by double digits and have increasingly lost touch with economic fundamentals,” said the report, noting that it now takes a skilled-service worker seven work years to buy a 60 square-metre flat – “an all time high”.
A little further north, in Germany’s finance capital on the Main river, property prices are also once again on the rise.
“Following a breather in 2013, Frankfurt too is showing clear signs of picking up momentum,” the report states.
It goes on to warn that it is impossible to predict exactly when a “correction” will take place in the markets.
“A sharp increase in supply, higher interest rates or shifts in the international flow of capital could trigger a major price correction at any time,” it states.
Over the past year Munich’s real estate prices in Munich – already the highest in Germany – have continued to rise sharply.
Whereas in October 2015 a 60 square-metre apartment cost €6,200 per square-metre, those buying now will have to dish out €6,700 on average, according to online real estate agent Immowelt.de.
In Frankfurt prices have changed relatively little, rising moderately from €3,500 per square-metre to €3,600 in the same period.
In Berlin, property prices still remain well under half those in Munich. A 60 square-metre apartment in the German capital would currently set a wannabe homeowner back €3,100 on average.
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A few weeks ago, analysts over at Source Multi Asset Research published a research note highlighting the attractiveness of real estate investment trusts.
Source presented data which showed that year-to-date, real estate (the FTSE EPRA NAREIT index) has been the best performing global asset with a USD total return of 12.6%. Within the US the return is 16.5%, which beats equities, Treasuries, and credit.
But the argument for REITs as an asset class doesn’t stop at the beginning of this year. Indeed, Source analyzed nearly two decades of data and found that real estate had outperformed equities, Treasuries and high-yield since 2000 — almost 16 years of outperformance. The FTSE EPRA NAREIT has generated 2.5 times the return on stocks since 1990. Since 1990 real estate has produced a total return of 13% per annum versus 9.4% equities.
Still, the performance of REITs is dependent upon the performance of the asset class underlying the instrument. REITs will only outperform the wider equity market if real estate markets remain buoyant. With property values looking frothy in traditional real estate investment markets such as London, New York, and Hong Kong investors now seem to be taking a cautious approach to buying in the sector. Nearly a decade of ultralow interest rates has pushed up property values around the world as investors have charged into the asset class seeking high, and stable returns in an uncertain market.
Analysts over at Jefferies believe that there is one real estate market in Europe that is on the cusp of a renaissance after lacklustre returns from the sector for the past few years.
Time to buy German real estate?
A combination of wage growth, negative bund yields, dormant inflation and a booming current account surplus is priming the German real estate market for a demand boom according to Jefferies’ Germany Equity Strategists.
In comparison to other Western Europe real estate market, the German property market is starting from a much lower base, making the region attractive to outside investors. Further, as the country has missed out on the real estate boom taking place in other regions, the country has not been a rush to introduce measures to slow down property price growth. Another reason why the region’s is more attractive to outside investors.
Economic fundamentals are supportive of home price growth. Wages are growing faster than consumer prices and Germany is benefiting from the European Central Bank’s policy of keeping interest rates at, near or below zero.
Overall, Germany is a very attractive place to be looking for real estate at this current point in time:
“With the economy running a large current account surplus at the same time as real rates are negative should ensure that property prices are well bid. One further factor that ought to drive demand is that affordability is still good. Furthermore, the weak euro ought to mean that foreign demand for real estate is also high. Indeed on most straightforward measures of property price to income or rent, Germany comes out as inexpensive.” — Jefferies
A court just issued a small blow to the capital city’s ban on Airbnb-style holiday flat rentals.
A court in Berlin ruled that people with second homes in Berlin may rent out their flats to tourists in a decision that runs counter to a newly implemented ban on Airbnb-style rentals.
Berlin officials passed the ban, which went into effect in May, due to concerns about limited available housing space and rising rental prices. It forbids property owners and tenants from renting out whole flats or houses to tourists through websites like Airbnb.
Those who violate the ban face fines of up to €100,000, although hundreds have nevertheless been flouting the law.
But the court ruling on Tuesday opened up the possibility for people with only second homes in Berlin to rent out their flats to vacationers during the parts of the year when they live in their primary homes.
The three complainants who filed the challenge to the ban live in Rostock in northern Germany, Denmark and Italy.
The court said that renting out a secondary home that otherwise would not be used does not lead to a loss in living space.
“In terms of the availability of housing in the city, it doesn’t make a difference whether a secondary home is rented out or empty while the owner is away,” the court stated, adding that the three owners who complained did not show evidence of abuse of the law in wanting to rent out their Berlin homes.
The court called on neighbourhood officials overseeing the areas where the complainants own their second homes to make an exemption for them from the ban.
Berlin’s ban on the use of sites like Airbnb to rent out whole flats has been met with contention since it first came into force, with dozens of suits being filed against it.
The first legal challenge was shot down in June after four individuals tried to argue that the law ran counter to property ownership rights.