Moving to Berlin or looking for a new rental property in Berlin? Here are some tips to help you settle into one Europe’s hippest capitals, including renting conditions and where to live in Berlin. If you’re planning a move to Berlin, you will find that very few other European cities have quite so much variety to offer residents as Germany’s hip capital. One glance in city you’ll take in modern skyscrapers, and the next a quite leafy street that seems it has aged in a hundred years, before bursting upon bright murals in an arty quarter.

In comparison to other global cities like London, Paris, New York or Tokyo, Berlin is a haven of open green spaces, quite suburbs and affordable housing which are all in close proximity to the city centre. Getting around the city couldn’t be easier, many of the city’s main employment hubs and attractions are all within walking distance or can be accessed by bicycle – this has meant that owning a car is a matter of choice, not a necessity.  After a turbulent 20th century, the city is reinventing itself as an exciting, innovative, modern capital and is now an appealing destination for not only entrepreneurs, but students and expats alike.

Where to live in Berlin?

Berlin is divided into 12 official districts which are most made up from several neighbourhoods. At Complete we have a number of developments located across the city in a number of key districts including Neukolln, Friedrichshain and Mitte.

The district of Neukolln is one of Berlin’s trendiest districts which is full of organic cafes and art galleries. Neukolln is home to both our KODA and Richard Quartier developments, which have proven extremely popular with tenants in Berlin. Residents of Neukolln will be able dine at many of the areas popular restaurants including Mama Cook Restaurant or EINS44. Located next to Tempelhof, the Schillerkiez – a residential grid based around the leafy Schillerpromenade – is where you’ll find Neukölln’s best cafés.

Artistically chic, lively, and as its name suggests, central, Mitte is certainly in the “middle” of everything. With its mix of renovated buildings, sky-scraping murals, and abandoned store fronts, Mitte is proudly, boldly, and uniquely Berlin. Diverse goals and individuals converge in Mitte, the neighbourhood known as Berlin’s beating heart.

Excitingly, our Gartenhaus development is close to one of the city’s largest redevelopment and regeneration projects, Europacity is under construction to bring an entirely new quarter to Berlin, with a number of residential, commercial, retail and leisure facilities to Mitte.

Complete Prime Residential in Berlin

We have been operating in Berlin since 2017, and during this time the team have been working on behalf of their mainly international investor clients for a number of different key rental developments across Berlin. Over the coming months, we have number of key new developments which will be completing in various locations across Berlin including Charlottenburg and Wilmersdorf, which include: KonstanzerKuStrasseThe AlfredHaus Brandenburg and Stralauer Allee.

If you would like to find out about the properties we currently have available in Berlin, please contact the team on +49 3094 866863 or by clicking here.

Complete Prime Residential’s Berlin office is going from strength to strength. The residential lettings team which specialises in finding tenants and managing furnished properties in Berlin have had a fantastic start to 2019. They have secured an incredible 15% increase in lets against target so far during 2019 with another five developments due to come on board this year.

We provide an end to end service for our clients including handing over and snagging of new developments, furniture packages, a tenant find service and property management that includes contents insurance and income tax assistance. The team also provides a resales service for any clients wishing to capitalise on their investment. Our unique proposition is that we provide furnished apartments that appeal to the international tenant community with a customer focused approach to property management.

The team’s success can be attributed to numerous factors including project completions such as KODA, in the trendy Neukolln district of Berlin, which has proven to be extremely popular with tenants, as well as The Galleries, a refurbished building in Friedrichshain. It’s not only project completions which have contributed to the offices’ success, but tenancy renewals have also had a role to play in the team’s performance success with rental increases of 4.2% being secured.

Our Berlin office opened back in 2017 and during this time the team have been working on behalf of their mainly international investor clients for a number of different key rental developments across Berlin. These new developments include: KODA in Neukolln, Am Tierpark 51 in Friedrichsfelde and Richard Quartier, also in Neukolln. Our client services team have conducted some analysis into the first and second tenancies to see what the average results were for our clients, please see below:

First Let:

– 20% higher rents than initially projected on project launch

– 58-day void period (from completion to tenancy start date)

– Average tenancy length 14 months

– 6.35% gross rental yield

Second Let:

– Average tenancy length 12 months

– 2% rental increase

– 7.34% gross rental yield

These achieved figures are a testament to the hard work which our team in Berlin provide to their clients. Over the coming months, we have number of key new developments which will be completing in various locations across Berlin including Charlottenburg and Wilmersdorf, which include: Konstanzer, KuStrasse, The Alfred, Haus Brandenburg and Stralauer Allee.

If you would like to find out about our Berlin operations or more information about our forthcoming developments, please contact the team on +49 3094 866863 or by clicking here.

Our Berlin office opened in 2017 and we now have several boutique and smaller developments under our management, with a number of new projects planned for completion across the city.

The team now has 83 properties under management and is currently assisting 109 tenants with their property needs. This phenomenal success can be credited to a number of key instructions across several developments across the city. Richard Quartier, AM Tierpark, KODA and The Galleries are few of our stand-out developments for the team in Berlin which proved to be extremely popular with tenants. We have provided a short overview of both of the developments below:

Richard Quartier

Richard Quartier is located in one of Berlin’s oldest and most popular residential areas, Richardkiez. Many people recognise this area as one of the most exciting places to live in Berlin due to the cosmopolitan atmosphere which transcends the cityscape at every corner and unities the melting pot of cultures. Our team managed to secure a 100% occupancy rate across our instructed units at Richard Quartier with the average monthly rent being €909 and an average rental yield of 6.8%.

AM Tierpark

AM Tierpark was one of the first developments which our team worked on in Berlin. This development is located in Lichtenberg, which is a leafy residential district in east Berlin. The team secured five full managed rentals with an average monthly rent of €1,138 and an average rental yield of 3.7%.

KODA

Positioned neatly within the ever-transforming and trendy area of Neukölln Berlin, our KODA development was always going to prove to be extremely popular with tenants. As of 28th March, our team have tenanted 99% of our instructed units within an average rental yield of 6.18%.

Our team in Berlin have managed to secure 100% asking price for all of tenancies – which can be contributed to the extremely high proportion (82%) of furnished properties.

The Galleries

The Galleries is located in the Friedrichshain district, Berlin’s most fashionable district. This dynamic district is fully of trendy boutiques, and bars which contributes to the area’s youthful lifestyle – making it extremely popular with locals.

Since its completion at the end of 2018, we’ve tenanted 72% of all instructed units with a pipeline of tenancies waiting to commence at The Galleries. As it currently stands, the average rent was €1,125  and an average rental yield being 3.5%.

Tenant profile

Across all of our schemes in Berlin our typical tenant profile is extremely similar, if not the same in some cases. Typically, our tenants are either students, who are studying at one of Berlin’s many universities, young professionals and international expats, who are working for one of the many multi-national or German companies based in the city.

With many more projects due for completion over the coming months, the team’s success is going to continue its upwards trajectory. Especially, with the recent sale launches of Eden West and Einbecker 47 by our sister company IP Global, the Berlin rental market is really on the rise.

If you would like to find out more about our offering in Berlin, please contact the team on +49 3094 866 863 or email the team at berlin@complete-ltd.com

Haus Brandenburg  | An update on progress on site

Haus Brandeburg is an elegant refurbishment of a historic building in fashionable Charlottenburg. Haus Brandenburg is nestled close to major employment hubs and only moments away from Berlin’s most famous shopping boulevard – Kurfürstendamm.

With completion firmly on the horizon, Peter Wheeler from our Berlin office took a trip to Charlottenburg to bring an update on progress on site at Haus Brandenburg.

There are currently two sets of contractors working on site simultaneously and so it really is all systems go.
All the new beams have been put in. They are working on levels 5 and 3 at the moment and work will start on level 4 quite soon.
The mains pipework for hot, cold and waste water has also already been installed running through the building and the heating system will be installed this month.
The building is now sealed with the new roof and new windows throughout.

Most progress has been made on level 5, with all internal stud walls and ceilings already in and layouts are right on spec, with areas for washing machines in the kitchens or in special utility rooms.

All in all, progress is being made at good pace. It’s a fantastic building with many so many beautiful original features.

 

For further information on Haus Brandenburg and to discuss availability please contact our Berlin office on +49 30 81802125 or email our office at berlin@complete-ltd.com

 

Berlin Real Estate Investments FAQ | Guest Blog

Our investment partners recently held a seminar on Berlin real estate investments. Ian Sigmund of IP Global provides a guest blog with some FAQs on investing in Berlin real estate.

WHAT IS THE AVERAGE RENTAL YIELD FOR BERLIN PROPERTY?

Rental yields in Berlin are relatively low when compared to those of other cities at a similar price level. Generally, if you are looking in the city centre around Schöneberg or Kreuzberg, yields are between 3 and 3.5% gross, but new builds and high end refurbishments are not subject to rent control so these yields, with today’s rental growth figures of up to 11% per annum, are expected to rise significantly as projects complete.

WHAT IS THE LEVEL OF INCOME LIKE IN BERLIN?

Berlin is still a relatively new market and the levels of income are not as high as other capital cities, which is part of the reason why rental yields are so compressed. Not many large businesses have moved into Berlin as yet, but we expect that to change in the coming years, particularly with the new airport and with start-ups such as Zalando coming to fruition. We expect levels of income to be driven higher in the medium to long term.

WHEN WILL THE NEW AIRPORT OPEN?

There have been a number of delays with the construction of Berlin Brandenburg Airport but the current plan is for it to open in 2019.

WHAT DATA IS THERE TO SUPPORT PRICE GROWTH OVER THE NEXT FIVE YEARS?

There is little data available on Berlin property, particularly when compared to more traditional real estate markets such as London. CBRE produce a very useful Berlin Housing Market Report which tracks annual price increases over the past year. There is no specific data predicting future growth, but over the past three years we have seen on average 10% growth per year and we expect that to continue because of a sustained supply deficit and low prices relative to other tier one cities in Germany such as Frankfurt, Munich and Hamburg.

WHAT IS THE POTENTIAL OF LICHTENBERG?

This is a very interesting district. It is in the east of Berlin so somewhere that has traditionally had more of a stigma attached to it. However, it has become very popular with the under 35 demographic, which makes up over 40% of the population in Berlin. It’s a very hip, trendy place to live and we expect there to be a lot of gentrification. We would predict some significant growth in Lichtenberg over the next ten years.

ARE APARTMENTS IN BERLIN FREEHOLD OR LEASEHOLD?

All apartments in Germany are freehold. There are no leasehold apartments.

ARE THERE RESTRICTIONS FOR FOREIGNERS LOOKING TO BUY PROPERTY IN BERLIN?

There are no restrictions in Germany for anyone looking to buy property.

DOES BUYING PROPERTY QUALIFY FOR A RESIDENT’S VISA?

No. There are no golden visa programmes in Germany.

DO YOU NEED A BANK ACCOUNT IN BERLIN TO BUY A PROPERTY THERE?

It is highly recommended that you have one. If you are using one of the banks that IP Global cooperate with they will set up a bank account as part of the service offered with your mortgage.

WHAT IS THE BUYING PROCESS LIKE IN TERMS OF PAPER WORK?

It’s a little more daunting than buying in more traditional markets. If you are a foreign buyer you will generally need to go to your local German Consulate to get a Power of Attorney certified and then send that on to the lawyer representing you in Berlin. If you are purchasing property in Berlin you must have your contract notarized at the notary’s office there, so unless you want to go to Berlin in person to sign for the unit you will need a Power of Attorney.

WHAT ARE THE FEES LIKE WHEN PURCHASING PROPERTY IN BERLIN?

Acquisition costs are fairly high, generally 9-10% on top of the property sale price, which covers the transfer tax of 6%, a land registry fee of 0.5%, notary fees from 1.5% which are statutory, and legal fees of approximately 1%. When you compare that to somewhere like the UK, those are high numbers, but you can offset the majority of your mortgage with your rental income. Additionally, if you hold a property in Germany for ten years, capital gains tax does not apply so there are minimal costs on exit.

DO YOU OFFER BERLIN MORTGAGE FINANCING FOR FOREIGNERS?

Our partner Liquid Expat do offer mortgage financing for foreigners. The European Central Bank recently raised rates, which start from 2.3% for a ten year fixed mortgage, up to 3.25%.Find out how to get a German mortgage in our recent blog.

HOW MUCH CAN I BORROW?

Liquid Expat generally offers around 50% loan to value (LTV) mortgages for Berlin properties, although they have been able to secure up to 60% LTV. Prospective buyers should generally aim for around 50% LTV.

HOW MUCH DOWN PAYMENT IS REQUIRED?

If you are working with a 50% LTV, generally we will have about 15% initial deposit down payment and the other payments follow the construction milestone schedule, which is generally a 30% payment for the completion of the first milestone which is the shell of the property, followed by 28% six to nine months after that with the remaining payments in line with completion of construction milestones.

HOW CAN I FIND TENANTS AND MANAGE MY BERLIN PROPERTY?

We have a dedicated lettings and management service, Complete, who will be able to manage all properties in Berlin. This includes a snagging and handover service, furniture packages, lettings, property management and resales. They are also able to assist with contents insurance and referrals to tax advisors.

WHAT ARE THE MANAGEMENT FEES LIKE FOR PROPERTY MANAGEMENT COMPANIES?

This varies quite dramatically. There are generally two models in Berlin. The first is the furnished short-term lettings model, where tenants are found for any period of time from around three months up to one year and there is plenty of flexibility as the landlord. For this sort of model the fees vary but are around 10% of the gross rental income, plus a finders fee. For the more inflexible, long-term model the German market is about EUR30 per month but the level of service offered is much lower.

IS THERE A MANAGEMENT FEE EVERY TIME A UNIT IS RENTED OUT?

This depends on which management company you go with. Our sister company Complete charges a one-month fee for every new tenant coming in. As such we would generally advise that when clients do let their property out, they do so for at least six months to one year.

HOW LONG ON AVERAGE ARE RENTAL PROPERTIES VACANT?

Berlin has a vacancy rate of just 1.2% so apartments generally aren’t empty for very long. In terms of owner-occupier versus renters in Berlin, there is an 85% renter rate, with only 15% of people in Berlin currently owner-occupiers. This is increasing dramatically – five years ago this was 10%. Many of the tenants who rent through Complete are international and have recently moved to Berlin and as such there is a high demand.

ARE MOST APARTMENTS RENTED FURNISHED?

A few years ago it was very uncommon for new-build properties to even include kitchens. However, on the short-term lettings model it is recommended to furnish apartments, particularly smaller abodes. IP Global recently had a project in Neukölln of studio apartments and it recorded yields of 6%, which was very high for Berlin, and this was on a furnished model.

ARE UNITS IN BERLIN SUBJECT TO RENT CONTROL FOR EVERY DEVELOPMENT?

As of the end of 2014 Germany introduced rent control for a number of cities. At IP Global we focus on units that are not subject to rent control, so that would be new-builds and high-end refurbishments. For these you can add in a rent increase of, for example, 5% per annum when you negotiate with a tenant and that will be fixed in the rental agreement.

WHAT IS THE FUTURE OF THE BERLIN PROPERTY MARKET AND IS THERE A BUBBLE?

This is a common question because of the fact that over the past three years we have seen growth of 30% in Berlin property prices. Yet the price per square metre in Berlin is about EUR3,300 which is still extremely low, particularly when compared to Frankfurt, Hamburg and Munich. Measures such as the ten-year hold no capital gains tax also encourage a more stable market. In the medium to long term, we do not see a bubble.


Ian Sigmond

Ian is responsible for the sourcing and management of all IP Global investments in Germany with emphasis on the Berlin market. His previous exposure to International Financial Markets at the Royal Bank of Scotland Group and China Merchants Fund have provided him with the critical quantitative and analytical skills to identify key strategic Investment locations in the German real estate market.