Friday 2 November 2012

Public Projects Never on Time and Budget 2

Berlin: Senate seeks new project manager for Opera-remediation
The Berlin Senate has terminated the contract with Drees & Sommer as project manager of the renovation of the Staatsoper Unter den Linden. Corresponding media reports confirmed a spokeswoman for the Senate Department for Urban Development. According to reports, the separation is "by mutual consent", but with "different ideas as to the construction project going on" in the background. With a temporary project manager in place the Berlin Senate wants to re-tender the service. The opening date is held. This was postponed to the spring of 2015, allegedly because in 17 m depth "surprisingly" old wooden posts were found. The renovation costs of the lately 250 million euros will not rise, but this is doubtful in view of a possible further time delays due to the re-tender.

Is this the BER Berlin Brandenburg Airport all over again?


Public Projects Never on Time and Budget 1

Potsdam: Further delay in Landtagsbau because companies go bankrupt?
During the construction of the Brandenburg state parliament in the center of Potsdam new trouble threatens: The Saxon Sandsteinwerke GmbH, based in Pirna, on 1 November at the Dresden district court filed for bankruptcy. The company was previously supplier for the cladding for the city castle replica. The works of the company at the site have been set. The bankruptcy of Sandsteinwerke their lawyer reported claims outstanding more than 1.9 million euros to the BAM Germany, which builds the project in PPP. BAM itself is currently in dispute with the state over increased construction costs and a later completion date. Completion is still planned for end of next year. The costs are still with approx. EUR 120 million budgeted.


Wednesday 24 October 2012

Ifo Business Climate Continues to Deteriorate for the sixth consecutive month

The Ifo Business Climate Index for German industry and trade fell in October for the sixth time in succession. Companies again expressed growing dissatisfaction with their current business situation. The business outlook nevertheless remained unchanged at last month’s low level. The clouds over the German economy are darkening.
In manufacturing last month’s deterioration in the business climate continued in October. Assessments of the current business situation were significantly poorer and now approximately correspond to the long-term average value. Business expectations recovered slightly for the first time in six months and are less pessimistic. According to manufacturers’ reports capacity utilization rates were considerably lower than in the previous quarter. This marks the third drop in succession.
After staging a recovery last month, the business climate index in both retailing and wholesaling dropped this month. The retailers surveyed were much more satisfied with their current business situation, but expressed far greater pessimism about their six-month business outlook. Wholesalers reported slightly improved expectations, but their assessments of the current business situation cooled down significantly.
In construction the business climate indicator fell further. Although the construction companies surveyed expressed less pessimism about their six-month business outlook, they were far less satisfied with their current business situation.
Hans-Werner Sinn
President of the Ifo Institute

Expo Real 2012, the international real estate conference at the beginning of October in Munich has shown that the demand for property investment opportunities in Germany however is unwavering. The yields are under pressure due to the international influx of investors. Especially properties in Berlin are in high demand because of the relative undervaluation compared to other European capitals and the recent rent increases.

Uwe Falkenberg, owner of
Falkenberg Solutions
Real Estate Consultants


Thursday 18 October 2012

Office Investments in Germany Q3 2012

Investors spent more on office properties in Germany through September than in the same nine-months period during the last five years, buying more than twice as much in Berlin (172%) and Munich (138%) than the same period last year while other cities of the German "big six" like Hamburg or Dusseldorf had a slight decline.

Office properties valued at 6.27 billion euros ($8.22 billion) were sold in the first nine months of 2012, a 50 percent increase from 2011, according to data compiled by BNP Paribas (BNP) SA’s German real estate unit.

“Safety-oriented investors see good conditions here due to the relatively stable economic and employment situation,” Sven Stricker, head of investment at BNP Paribas Real Estate GmbH, said in a statement today. “Office investments have a good medium-term outlook, assuming the euro crisis doesn’t escalate.” For the full report in German click here.

Demand for German property in all property sectors has significantly increased this year as investors are seeking a safe place to put their money amid the risk scenarios of the euro zone’s sovereign-debt crisis. Germany’s economy, Europe’s largest, is forecast to grow 0.8 percent this year, according to the government and 1.0 percent for 2013. The economies of the 17 nations that share the euro are together forecast to contract 0.4 percent, according to the European Central Bank.

The demand for property investment opportunities in Germany is unwavering. The yields are under pressure due to the international influx of investors. Especially properties in Berlin are in high demand because of the relative undervaluation compared to other European capitals and the recent rent increases.

Come back regularly as we will provide information on other market sectors shortly.

Uwe Falkenberg, owner of
Falkenberg Solutions
Real Estate Consultants


Sunday 30 September 2012

Let's Meet at Expo Real 2012

Today we have some information in our own interest:

Let's meet at Expo Real 2012 to discuss the optimisation of the operation of your properties.

What you measure is what you get!

We have proven concepts for performance management using Service Level Agreements (SLA) and Key Performance Indicators (KPI) in the fields of Facility Management and Property Management.
If this sounds interesting to you and you happen to be at the Expo Real in Munich this year why don't we get in contact and meet up to discuss the next steps?

Uwe Falkenberg

Falkenberg Solutions
Real Estate Consultants


Monday 24 September 2012

Germany September 2012 Ifo Business Climate Index Continues to Fall

The Ifo Business Climate Index for German industry and trade continued to fall in September, marking its fifth successive decline. The companies surveyed are again less satisfied with their current business situation. They also expressed greater pessimism about the future. The curbing forces on the German economy continue to prevail.

After recovering briefly last month, the business climate in manufacturing continued to cool significantly in September. Although survey participants were more cautious in their assessment of the current business situation, it remained clearly above the long-term average value. Expectations concerning the six-month business outlook remained clearly negative and dropped for the fifth month in succession. In terms of the outlook for exports, last month’s slightly negative trend continued.

The business climate recovered at both levels of trade. Companies in retailing reported an improved
business situation, while their expectations were only marginally more pessimistic. The same, but even more pronounced trends were seen in wholesaling. The wholesalers surveyed are far more satisfied with their current business situation than last month, but the six-month business outlook continued to cloud over.

In construction the business climate indicator fell again. Assessments of the current business situation
are less positive than last month. Moreover, the construction companies surveyed are more pessimistic about their six-month business outlook.

Hans-Werner Sinn
President of the Ifo Institute

Apartment Block in Berlin
Apartment Block in Berlin

The demand for property investment opportunities in Germany however is unwavering. The yields are under pressure due to the international influx of investors. Especially properties in Berlin are in high demand because of the relative undervaluation compared to other European capitals and the recent rent increases.

Uwe Falkenberg, owner of
Falkenberg Solutions
Real Estate Consultants


Thursday 13 September 2012

Real Estate Development Market in the Berlin-Potsdam Metropolitan Region Dominated by Residential Property

Property Development in Berlin
The property development market in Berlin and Potsdam is dominated by residential developments for the second consecutive year: A study compiled by BulwienGesa for Hochtief and TLG for the period of 2009 to 2016 claims 56.5% of the projects currently under construction or in the planning stage in the Berlin-Potsdam region are Residential Properties (3.5mn sqm). This is an increase of about 1mn sqm over the previous year. The entire project development volume in Berlin and Potsdam from 2009 to 2016 would thus be around 6.2mn sqm, or 12.5% more than in lst years study for the report period.
The total investment volume climbed by a further €2.3bn, to €18.3bn. This increase, however, is exclusively due to the residential sector: there were significant declines for retail (-132,000 sqm, down to 618,000 sqm) and hotel projects (-115,000 sqm, down to 700,000 sqm). Office developments fell back slightly by 12,000 sqm, dropping to 1mn sqm. Due to the lack of big deals in the commercial sector the volume shrank by €2.2bn.
The German version of the full study including data and graphs is available for download on


Monday 3 September 2012

German Residential Properties on the Upturn - Demand for Condos Rising

The BBSR (Bundesinstitut für Bau-, Stadt- und Raumforschung) an institute operated by the German federal government have published their annual research results on the German residential market. The focus was on owned single apartments (condos or condominiums). For more information in German click here.

After a longer period of price stability prices for residential property especially for condos in big cities have risen. There is no indication for a price bubble though.

The average price for used/existing condos in 2010 was at 1,160 €/m² whereas in the same period it was at 2,400 €/m² for newly built apartments (condos), more than double. For big cites the data for 2011 are available and show an increase of 3.5% for used and up to 14% for new condos (which includes newly built or newly divided existing buildings). Especially private investors view this investment type as a safe haven in view of the Euro crisis. The development is also supported by currently exceptionally good financing conditions.

Purchase Prices per square meter in 2010

Germany: Purchase Prices for Condos 2010
Click here or the picture for a bigger version.

From a marco-economic viewpoint the development of the prices for condos is congruent with the development of rents. Especially in economic centers with strong growth demand for housing is high with a price driving effect on both rents and condo prices which also radiates into the nearby areas.

Condo Prices compared to rents in Germany 2010

© Copyright by BBR. Alle Rechte vorbehalten.
 Click here or the picture for a bigger version.


Sunday 22 July 2012

Migration Inside The Europe, Millions of East Germans returning home

Migration Inside The Europe, Millions of East Germans returning home

Many of the millions of east Germans who flocked to the west of the country to take jobs after the Berlin Wall fell are now returning home, a study to be published Thursday showed.

European Phoenix -- In 2010 alone more than 40,000 people born in communist East Germany who had moved west went back to the region, according to research conducted by the Leibniz Institute for Regional Geography in the eastern city of Leipzig.


Friday 29 June 2012

Why is Berlin-Prenzlauer Berg still a Destination for Property Investors?

Prenzlauer Berg
Right from the beginning of the discovery of Berlin as a Property Investment Hotspot for International Investors in 2004 the area of Prenzlauer Berg or "Prenzlberg" to the locals was one of the focus points. It soon became too expensive for reasonable investments and there still was a lot to do. At this point many tenants and investors tuned to the neighboring Friedrichshain. Still today Friedrichshain is more "studenty" whereas Prenzlauer Berg is more "Bohemian" with a higher level of rents (and income). Here is some backgound information:

Prenzlauer Berg was developed during the second half of the 19th century based on an urban planning design from 1862 by James Hobrecht, the so-called Hobrecht Plan for Berlin. Envisaged as a working-class district, its tenement houses (in German: Mietskasernen) were mainly inhabited by intellectuals, artists, and students in the former German Democratic Republic.

This area of former East Berlin is now perhaps the most sought after area to live for professionals and young families.  The area was relatively unscathed by Second World War bombing, leaving street after street of intact 19th and early 20th century apartment buildings.  It offers an abundance of beautiful pre-war ‘Altbau’ buildings, the vast majority of which have been completely restored since unification of the city.  Rising property values have led to more wealthy residents moving into some areas of the borough.

It is close to central Berlin and has a lively café, bar and restaurant scene as well as several parks and green spaces. Popular places to go out include Kastanienallee, Kollwitzplatz (home to the sculptor Käthe Kollwitz), with its excellent Saturday market, Kulturbrauerei (an expansive brewery which has been transformed into a centre for culture and evening entertainment) and Helmholtzplatz.   Keeping in rhythm with a slower, more livable pace, this area also abounds with several weekly street markets and the world-famous Mauer Park Flea Market every Sunday.  This area is also home to countless advertising, design and media firms and traditionally the bohemian quarter of East Berlin,this is still a haven for artists and alternative culture, despite gentrification.
Some of the Highlights of Prenzlauer Berg
The varied history of Berlin comes to life in this neighborhood through its many diverse cultural and social offerings. Truly this is one of the most interesting places to take in all that this reborn city has to offer, which also makes for an ideal property investment opportunity in Berlin.

Over a period of only 3 years the purchase prices for apartments in Prenzlauer Berg rose from 2,300 €/m² to 3,000 €/m² while the rents in the same time span went from 7.30 €/m²/month to 9.24 €.

Because of its ambiace Prenzlauer Berg is attractive as a location for condos to be used by he investor as much as a buy to let investment in rented apartments. Attractive developments with excellent potential and both options are coming up for sale . More detailed information can be found here:


Wednesday 27 June 2012

Where is Kreuzkölln - Property Investment in Berlin

One of the latest "hype" areas in ther berlin housing market is Kreuzkölln or Kreukoelln for those who do'nt have the benefit of a German keyboard. This is an artificial name made up by the two districts of Kreuzberg and Neukölln.

It is a region of less than 1 km² with a popolation of about 18.500. It is also defined as the "Reuter Kiez" because the square "Reuter Platz" defines its center. To the north and east it boarders onto Kreuzberg-Friedrichshain at the Maybachufer of the Landwehrkanal and Kottbusser Damm. Sonnenallee, Wildenbruchstrasse and Kiehlufer are the boarders towards the other parts of Neukölln.

Having been one of the problem zones and social hot spots of the district the area has developed into a trend area like Friedrichshain after Prenzlauer Berg was over subscribed. There are currently no shops available for rent as every possible space is turned into a cafe, restaurant or other trend-shop. This so called "gentrification" led to an attempt to verbally expand the area of Kreuzkölln e.g. to Flughafenstrasse.

For an official map of the area click here.


Tuesday 19 June 2012 Relaunch

Our sister website is currently relaunched. The site serves as a portal for a network of property agents specifically targeted at international investors. It provides all information in English.

A new product section is now included: Villas.

The other sections are Single Apartments either vacant as Condos or rented as Investment Apartments.
Retail and office buildings in Commercial Properties

 Residential Investment Properties

And some specialised topics like Development Properties and building plots.

The listings are currently uploaded and will be kept updated.

The aim is to provide information and a network of professionals needed in the process of buying a property in Berlin: Tax consultant, bulding surveyor, solicitor, Notary public and finance.


Friday 15 June 2012

Müggelstrasse in Berlin-Friedrichshain, not available on Street View


Increase of dwellings completed in 2011: 14.6%

As reported by the Federal Statistical Office (Destatis), the construction of a total of 183,000 dwellings was completed in Germany during the year 2011. Compared with the year 2010, this is an increase of 14.6% or 23,000.

Detailed information in German: Destatis

The impact in the supply is still to small too cover the ever growing demand for suitable housing. The Berlin Housing Market Report 2012 demonstrates impressively the shortage through rising rents.


Sunday 3 June 2012

Berlin Charlottenburg, High Profile Landmark Commercial Building off Kurfürstendamm

A rare opprotunity was brought to our attention and we are authorized to forward the offer to any serious investor:

Berlin Charlottenburg, just off Kurfürstendamm ( Ku'damm )

Twin Building with high profile retail units on the ground floor and offices above.
Registered Landmark Building , high quality fit out, 2 lifts per entrance   
Office     6.693 m²        
Retail     539 m²        
Basement/Storage     586 m²        
Residential     139 m²       
Total Space     7.957 m²        
Currently under rental offer, office 424,16 m² + storage 37 m².         
  • Potential rent p.a.      €  1.551.369,00
          5,5%      gros yield
  • Actual net rent p.a.      €  1.482.992,00
          5,3%      gros yield
Purchase price        28.000.000,00         
Commission     4% plus VAT paid by the buyer
For detailed information please contact us through the contact facility on our wedsite


Wednesday 30 May 2012

Purchase Cost for a Property in Berlin 2012

One of the most asked questions by investors new to Berlin is regarding the typical cost involved in making a real estate investment. Since we last published this overview in December 2007 the property sales tax has gone up to 4.5% and since April 1st of this year is at 5% where about half of the German states are.

The cost depends on the price of the property and the cost tables for the notary public and the land register. They are digressive, in other words, the higher the price, the lower the percentage of the cost.

For a property with a purchase price of € 1 million the cost would be roughly:
Notary Public
for the contract
6,965 €

For an escrow account if required (based on $ 500k) 3,020 €

Land Register

4,280 €
Property Sales Tax
5% in Berlin
50,000 €

(4.5 – 5% rest of Germany
except Hesse, Bavaria and Saxony 3.5%)

Agent Commission
Between 5 and 6 % plus VAT 19%,

(assume 5%)
59,500 €

120,745 €

For a property with a purchase price of € 2 million the cost would be roughly:
Notary Public
for the contract
13,660 €

For an escrow account if required (based on € 1 mill.) 5,995 €

Land Register

8,410 €
Property Sales Tax
5% in Berlin
100,000 €

(4.5 – 5% rest of Germany
except Hesse, Bavaria and Saxony 3.5%))

Agent Commission
Between 5 and 6 % plus VAT,

(assume 5%)
119,000 €

241,070 €

For the quoted size of investment as a rule of thumb it is safe to use 12 % purchase cost for an initial calculation, with higher values reducing the percentage slightly.

These figures also identify the items where savings can be achieved:
If it is a straight forward purchase an escrow account should be avoided as the saving can be quite substantial.

Traditionally in Berlin the commission for the property agent is paid by the buyer. For a long time 6% plus VAT was custom and practise. With the recent influx of international investors these margins have come under pressure, especially with the agents not assuming any responsibility for the information provided by them. On the other hand there are 5 or more interested buyers for any property coming to the market which is a difficult negotiating position. Please also read our post about the Double Commission Trap.

The cost of financing will depend on many factors like the amount of equity used etc.. There will be cost for Technical Due Diligence and valuation, "handling fee" between 0.25 and 1 % of the loan charged by the bank and entry of the loan into the deeds register. With the right approach and experience there is also a money saving way of doing this.

Naturally there are many more aspects to be considered before making a purchase: Review of the rental contracts, maintenance, ancillary cost to mention only a few of them. Language can be quite an obstacle because an investor cannot expect every property manager or care taker to speak English.

Businesses like Falkenberg Solutions – Real Estate Consultants. and their network of Real Estate Professionals from Notaries to Tax Consultants and Finance Brokers are specialised in assisting international investors in their investment decisions, providing a "home base" for their activities in Berlin -- before and after the purchase.