Austrian Real Estate Firms Pour Into Berlin Amid Soaring Property Prices
Date：2017/02/14
FEB 9, 2017 Troy McMullen
[Forbes] International real estate developers have descended on Berlin over the past decade as the city’s property prices have risen sharply. Home values are up 49% the past five years, elevating the German capital to one of the fastest appreciating markets in Europe. The city now ranks first in Europe for investment prospects and capital value increases, according to a survey by PwC and the Urban Land Institute.
Yet despite increased competition from across Europe, Austrian real estate firms appear to be gaining the upper hand. At least six companies, including large Vienna-based firms such as BUWOG AG and S IMMO AG, have shifted financial resources to Germany over the past few years with much of it aimed at Berlin.
“The Berlin market is growing and that's appealing to investors," says Andreas Segal, deputy CEO and CFO of BUWOG AG. The Vienna-based property sales and development firm has a portfolio that includes more than 50,000 units across Austria and Germany, including at least seven projects in Berlin. Among them is 52° Nord, a residential project along the River Spree in the Köpenick district that includes apartments, penthouses and town houses.
BUWOG entered the residential construction market in Germany in 2012 after acquiring a Berlin development company. It now has some 3,297 apartments in the pipeline.
"Prices are a much lower than what you would find in London and Paris and the city is gaining population," says Segal. "That's very attractive not only to foreign investors but also to local Berliners looking to own property here."
After the fall of the wall in 1989, Berlin’s property market struggled until the early 2000s when foreign buyers began to show an interest. The market is now soaring.
Home prices jumped 11 per cent in 2015 against a year earlier, with a record €12.75bn in transactions, according to a survey by the German Real Estate Association (IVD). Foreign investors, emboldened by Germany’s economic stability, accounted for 76 per cent of those transactions, the survey reports.
Property values are rising fastest in long neglected areas of the city, according to an estimate by Ziegert Immobilien, a real estate services company. Formerly rundown locations from Mitte and Prenzlauer Berg to Kreuzberg and Neukölln are seeing increased investment bringing newly built condominiums sparkling with fitness centers, spas, and penthouse apartments.