Berlin Property Specialists

Our Research

Why Berlin?

'We aim to provide our clients with the best property opportunities and rental yield.'

Berlin property prices are undervalued in comparison to most developed European cities. Prices of properties average Eur 800 per m2 , nearly 10% of the average price in London and Dublin. Even newly emerging European cities such as Budapest are significantly higher in value than Berlin.

| February 2007 |

Recent Trends

over the past decade..

...include EU countries such as UK, France, Spain, Portugal to name a few, and more recently emerging countries such as Hungary have witnessed significant rises in the value of their domestic residential properties. Conversely Germany and specifically Berlin has seen a fall. This has been considered to be primarily due to the lacklustre performance of the German economy since the 1990 unification.

| February 2007 |

Post Unification

Post reunification, euphoria set in, this in turn led to a short term bubble in property prices.

This ‘false-bubble’ burst shortly after, with prices remaining suffocated until last year. The result of this ‘false-bubble’ was to leave a significant number of home owners in negative equity. Due to their negative equity position, as homeowners look to re-mortgage, Banks are not willing to lend at such LTV’s (loan to values) as would be the case in any other economy.

The above scenario is leading to forced sales providing for a short term opportunity to invest at discounted prices. In the medium term property prices are anticipated to increase bringing Berlin in line with other developed European cities.

(For this to take place, the percentage increase will need to be significantly higher than other cities)

Residential Property

and last year's price increases.

Last year was the first year from several where an increase in residential property prices was witnessed within Berlin. This was primarily the result of a significant number of institutional investors as well as high net worth individuals (significantly from UK and Ireland) purchasing property within the region. Over the last 2 years the above groups have invested over €25bln in German residential property portfolios (including conglomerates such as Goldman Sachs, Normura and Cereburus to name a few).

Reasons for their investment was twofold:

High rental yields in comparison to other markets (up to 10%) - Expectations of significant capital uplift on their initial investment.
The above increase is set to continue as global investors discover Germany and specifically Berlin as a location for Capital appreciation.

The German economy in general is buoyant which provides for one of the highest growths in GDP within Europe as highlighted among other things by the German Stock Market (Dax) which has risen by 40% since the beginning of 2005. Growth forecasts for GDP and reductions in unemployment are also continuously improving.