Winning in Growth Cities - Cushman Wakefield Report 2017 and Outlook 2018

Key global cities are winning the race for investment – but which ones? The ‘Winning in Growth Cities’ report, published today, is an annual survey looking at global commercial real estate investment activity.

Key Highlights

• Global property investment rose to $1.5tn in the year to June.
• Led by New York, the US dominates the ranking of global cities but Asian markets made the most impressive gains in the past year.
• London is still the number one global market for cross border players. Paris closed the gap in third place but German cities are the ones to watch.
• While gateway cities again dominated, with the top 25 taking nearly 50% of the market, tier two cities have taken market share.
• The economic background is more encouraging for real estate than many expected, with global growth forecasts raised by the IMF for the first time since 2011.

One of the key factors determining which cities will out perform is technological change. Developments such as virtual reality and big data are set to enable more rapid change and will start shaping cities and tenant demand within months rather than years.

This report aims to identify some of the key enablers and emerging technologies and looks at what will determine which cities are the winners in this radically shifting environment.

For Germany and especially Berlin we support all activities regarding property investment with our experience and specialized network of property professionals.

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Winning in Growth Cities - Cushman Wakefield Report 2017 and Outlook 2018

International Property Handbook - Trends 2017

The International Property Handbook from Deloitte’s Global Real Estate & Construction group tracks real estate capital flow, and provides a view of investment trends and key deals in the most active international markets. It reflects back on 2016 analyzing economic data and real estate investment in 21 countries around the world to provide insights on potential trends in 2017.
Key trends include:

• Overall economic outlook is stronger, and there’s a significant increase in cross-border investments, especially in Europe.
• While the total investment volume remains stable, countries with positive investment volume growth are those in which investors expect growth due to macroeconomic indicators, expectations of rental growth, and yield compression.
  
• Offices continue to be the preference for investors.
• Private and unlisted funds are the most active net investors, followed by institutional funds.
• The capital raised continues to increase and investors are exploring new alternative markets.

Download the handbook to learn about the trends in the market.

International Property Handbook - Trends 2017

Sharp price rises continue for condominium apartments in #Berlin - JLL Report First Half 2017

The sharp rise in purchase prices for condominium apartments continued in the first six months of 2017. Compared to the same period last year, asking prices for condominium
apartments rose by around 12.5% to €3,730 per sqm.

Source: JLL Residential City Profile Berlin 1st Half 2017

The trend of higher price rises observed over the past six months is therefore ongoing, and prices are continuing to grow at a similar rate as in the period between 2011 and 2014. The average growth rate since the onset of the current upswing which started in 2009, is 10.9% per annum. Purchase prices have risen by an average of 6.5% per annum, or by a total of around €2,130 per sqm since records began in 2004. If prices continue to rise, which appears likely at present, it is possible that the average purchase price will break through the €4,000 per sqm barrier, bringing Berlin up to the price level of Stuttgart.

Download the full report with details on all Berlin districts:

Residential City Profile Berlin - 1st half-year 2017

We provide support for finding the right property investment in Berlin - but we are not agents, or only in very few cases. Investors can rely on our impartial professionality. We don't only know about the sales process but also a lot about running a property to make it perform at its best potential.

Contact: http://www.berlin-portfolio.com/feedback.html

Sharp price rises continue for condominium apartments in #Berlin - JLL Report First Half 2017

October 2013: Berlin Residential Real Estate and Investment Property Market

Berlin residential real estate and investment property market

Residential market :

• 87 % of the housing stock is rental housing
• Extensive historical buildings in Berlin available
• the average basic rent at approx € 7.50 / m² ( 2012, increase of 13.8 % on 2011 )
• price level well below other international capitals
• High demand for housing in high income and demanding segments of the population
• Low residential construction (about 3,000 units per annum )
• Many of the houses are in good condition ( “Reconstruction East” , renovation through tax incentive models), extensice renovation of pre-war buildings

Rental Housing Market :

Young Metropolis Berlin

Also in 2013 , the popularity of Berlin as "a place to be" will continue. Sustainable rising rents and very good predictions for the housing market have ensured that in addition to private investors who have always viewed Berlin as an investment hub, the traditionally slower Institutional Investors appeared again as buyers. There are almost on a daily basis headlines about big package deals.

For many high net worth private investors the reasons to invest in Berlin Residential Property have been obvious: A stable investment in troubled times.

Interest rates are historically low , the rents rise above the rate of inflation and the vacancy rate is narrowing. Properly managed resources generates returns that do not exist in other forms of investment for the foreseeable future.

The supply shortage is going to cause further moderate price increases. The average prices in Berlin so far have remained remarkably moderate. In general although there were increasing purchase prices no price bubble has built up.

For investors in 2013 , Berlin is a more promising market, as opposed to other German cities that are even shorter in supply of interesting investments. In the German Capital one can make attractive investments through systematic search, while the Investment property market in other cities has come to a massive slowdown due to the low supply of opportunities.

" Window of Opportunity "

Why invest in Berlin?

Berlin Marathon

Berlin is attractive and popular. The Berlin Marathon on the last Sunday in September brings visitors from around the world. Many decide to buy some property because they like the atmosphere of a growing young metropolis.

• Berlin is a favorite among private and institutional investors with a specialization in Residential Properties.
• Favourable yield levels and prices per sqm compared to other European cities, especially capitals.
• Yield level will adjust soon adjust to other European cities > will lead to price increases.
• Positive population growth.
• Increasing number of single households and commuters.
• Low volume of new construction.
• Rental increases continue.
• Property prices continue to rise.
• Cheap redevelopment prices.

For support in the identification of the right investment targets please visit our website at www.berlin-portfolio.com. Especially for international Private Investors and Property Funds we provide a task force service for quick reaction to interesting opportunities. We provide independent support for the property search including foreclosure or auction properties and their valuation or appraisal. (Also see our free property market Research Service) Please use this link to the contact facilities provided there to place any requests .
Uwe Falkenberg

October 2013: Berlin Residential Real Estate and Investment Property Market

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 €
	Total	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 €
	Total	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.

Purchase Cost for a Property in Berlin 2012