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Nicci Talbot Communications / Cité

Strong Investor Confidence in Berlin Sees Neukölln Project Sell in Days

17 July 2017 14:00

FOR IMMEDIATE RELEASE

Strong Investor Confidence in Berlin Sees Neukölln Project Sell in Days

A new development of high-specification one bedroom and studio apartments in Neukölln has sold in a matter of days after Berlin international estate agency Black Label Properties brokered the project with a Hong Kong based investment company.

The previously ignored southeast district – now home to people from over 160 countries – draws expats, international students and young professionals from many global cities to add to its diverse culture. Despite being one 
of Berlin’s most popular locations, Neukölln had the third-lowest number of permits for new apartment developments planned across the entire city in 2015.

Black Label Properties Director Achim Amann commented “This is the most successful project we have marketed with our Hong Kong client, who we are now in our second year of partnership with in Berlin. The demand for international buyers looking to secure their ‘part’ of Berlin - especially in areas such as Neukölln - is increasing, and we expect our total transaction volume in Asia only to exceed 50€ Million this year."

The 2017 Price Waterhouse Coopers ‘Emerging Trends in European Property’ report ranked Berlin first for both investment and development prospects and expected increase in the amount invested in the city. With undersupply of new housing the main driving force behind growth in both capital values and rent levels, Neukölln saw Berlin’s second-highest rental growth in 2016 at 9.6% against Berlin’s average of 4.6%, and capital growth of 20.3% against Berlin’s average of 10.5%.

Mr. Amann continued, “We feel that it is not the price per square meter which counts to many investors, but more the potential of the rental market and the total purchase costs. Ideally, investors want studio apartments below 150,000€ or one-bed apartments below 250,000€ in vibrant Berlin neighborhoods such as Neukölln. Strong demand from people looking for accommodation is adding to the momentum, with high job growth and lower unemployment rates likely to put further upward pressure on prices in 2017."

With Germany now the fourth-largest economy in the world and Berlin the second-largest city in the EU - and at the heart of the country’s long-standing tradition of innovation - the city has outperformed Germany’s GDP growth for years by 42% between 2005-2016. Thanks to low set-up costs and a business-friendly ecosystem, the city is thriving on the back of dynamic entrepreneurship, which is also fuelling population growth and housing demand. Just recently an arm of South Korean technology giant Samsung - Samsung Next Europe – announced it would be setting up its headquarters in Berlin rather than London “because the city (London) is not a fun place to live unless you are really rich”.

Germany is also now the world’s third most popular study destination after the US and the UK, bringing in students of all backgrounds and interests. Berlin offers free education and its universities and colleges attract more students than anywhere else in the country.

The tensions within the German housing market have been illustrated in a recent report on the housing and real estate sector by the Federal Cabinet, which identifies bottlenecks in the housing market "with rising rents and prices" particularly noticeable in the large cities and urban regions. Rents have risen by a total of 8.3 per cent in Germany between 2014 and 2016, according to the Federal Government. In 2013, the annual rate of increase was 3% and by 2016 it was almost 5%.

"Real estate is becoming more and more the focus of investment projects for cross-border capital movements," the government report said, with sustained low-interest rates fuelling this development. While it is still unclear how the federal government intends to deal with the situation on the rental market in the short term, in the Berlin Senate the ruling coalition are already backing proposals to stop Federal owned land having to be sold to the highest bidder so that schemes for social housing and cultural developments have a chance to be built in high-demand area.

“Despite the current historically high returns, our advice to our international clients is to work on the basis of a 5.0% yield per year on their capital and 3.0% yield on rental income per year over the long-term,” added Mr. Amann. “Rents and purchase prices in Berlin are catching up with other major cities but we have a much more regulated rental market in Germany than the UK for instance. If we see housing supply increase over the next few years then these current levels will even out. We want to see Berlin remain a safe and secure place to invest so we can continue to bring high-quality projects to the market to meet demand while remaining affordable for people who want to make the city their home.”

If you are an investor and would like to find out more about the exclusive development projects and properties available through Black Label, please contact us: https://www.blacklabel-properties.com/contact-us.

Visit Black Label Properties' YouTube Channel - advice on investing in Berlin, area guides, legal, mortgages, education, finance & lifestyle: https://www.youtube.com/channel/UCK3H4RyzPON-ZcE2hZhNwug

Sources:

1/ Berlin-Brandenburg Statistics Office, Federal Employment Office (unemployment rate), Senate Administration for Urban Development and Environment (population forecast), compiled by CBRE: http://www.berlinhyp.de/uploads/media/WMR_2017_EN_WWW_20170109.pdf

2/ Emerging Trends in Real Estate Europe joint survey by PwC and the Urban Land Institute:

 https://www.pwc.com/gx/en/asset-management/emerging-trends-real-estate/europe/emerging-trends-in-real-estate-2017.pdf

3/ The Independent: Samsung snubs London in favour of Berlin because it’s 'not a fun place to live unless you are really rich': http://www.independent.co.uk/news/business/news/samsung-london-berlin-headquarters-eu-leave-brexit-not-fun-place-live-rich-uk-germany-a7836481.html

4/ Zeit Online: Rent increases nationwide by more than eight percent: http://www.zeit.de/wirtschaft/2017-07/mieten-kaufen-wohnungsmarkt-immobilien-einkommen-wohnungsnot


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Nicci Talbot

UK Press, Black Label Properties

Tel: 07758621106

Email: hello@niccitalbot.com


About Nicci Talbot Communications / Cité

Nicci Talbot is a freelance journalist, author, copywriter and PR specialising in property and travel. International PR at Black Label Properties Berlin. Social Media Manager at NUJ LFB and Nexus Communications.

Current project:

Cité zine was launched in 2017 a by British travel journalist with itchy feet and a desire for a better quality of life. The aim is to compare and contrast life in the UK with other cities around the world to find out where the best places to be a woman are regarding education, culture, health, childcare, work, and longevity. The name Cité is old French for city and ‘union of citizens, a citizenry,’ which is all the more relevant post Brexit.

“I love to travel and have Lithuanian roots on my mother’s side, which I’m starting to explore. My first trip abroad was a school exchange to France with my aunt who taught French at Hull University. I stayed with a family in Angers who had a daughter around the same age, which gave me a taste of school life and French food (my first time eating horse meat!). In my 20s I went backpacking around Asia, Australia, New Zealand and the US working in all kinds of places via WWOOF UK, which gives you free board in return for labour on the land. It’s a great way to travel on a budget and gives you an insight into the psychology of people and places: why they live where they do and how our environment inspires and motivates us. I worked in a rebirthing centre on the Gold Coast (lots of deep breathing, no gluten for 2 weeks); a biodynamic farm near Perth (didn’t work out as I wore deodorant and drank milky coffee); yoga ashram in Brisbane (accused of stealing money, left), and did some divorce decluttering at a house in Byron Bay.

Since the Brexit vote, I have been in despair at the thought of being cut off from the rest of Europe and my daughter being denied the same opportunities to travel and work abroad. I was inspired to start this blog to document my adventures and all the interesting people I’m meeting through my work as a journalist via the NUJ LFB and Black Label Properties Berlin. In a year’s time, my daughter will be going on exchange to an international school in China to start her secondary education, so it’s a new chapter for both of us, not without wobbles, but I hope full of opportunity and new adventure. It will be interesting to compare the school systems and see what she gets out of it. She has travelled to Europe, Italy, Japan and the US as an unaccompanied minor, so I spend a fair bit of my time doing the airport run.

Where do you find that elusive mix of sunshine, affordable property, culture, lifestyle and well-paid work? Is it best to split your time with a city base and some fun in the sun? What’s the best way to learn a new language? How do you go about setting up a business abroad or working as a freelancer? This blog aims to shed light on different cities and lifestyles around the world, the issues happening there, and how to relocate successfully be it full or part-time. If you’ve ever wondered what life in another country can be like, this blog is for you. I hope you find it useful and inspiring.” – Nicci Talbot, editor.

Have a story to share or want to collaborate with me?

Email hello@niccitalbot.com.

www.niccitalbot.com
www.citezine.com


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