ALEXANDERPLATZ CITY SYMBOL IN DEVELOPMENT

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1 ALEXANDERPLATZ CITY SYMBOL IN DEVELOPMENT This February we would like to cast a closer look Alexanderplatz, one of the most important commercial spot in the city, and investigate why and how it gained its current power. As reported in the BATO Newsletter from December 2012 Alexanderplatz was the most famous shopping location in the former east. Due to its historical importance rental price here would even top those at the Friedrichstraße, with the highest varying /m² with a tendency to grow according to CBRE. The area offers great public transport connections and contains some of the symbols of Berlin: the Television Tower and the World Time Clock. Due to positive retail developments such as the mall Alexa and the mixed-use properties: e.g. Die Mitte, and the historical Galeria Kauhof, it is even today one of the highly important and visited shopping spots in the city. Further new construction plans include: Alex 101 (residential and commercial complex in the form of a cube with m²; m² of which reserved for retailers). The renovation of Berlin Carré (on the back side of Galeria Kaufhof - in need of refurbishment since its current state does not correspond to any modern requirements). Alexanderplatz is the central square in East Berlin. Already during Wilhelminian and GDR times it played a major supply and representative role for retailers and was a meeting point for the citizens from the East side. Alexanderplatz today not only still poss ess es these im portant functions but they have been enhanced by further positive private a n d s t a t e c o n s t r u c t i o n developments. The stable retailer presence on the square is mostly by mass market brands and facilities. Complimentary segments such as gastronomy, convenience and goods/services of short-term requirement also had the chance to develop well in the area due to the important role of Alexanderplatz as a key transport junction. The extremely good public transport connections are the biggest plus for Alexanderplatz. Statistics show that the highest pedestrians and private vehicles frequency in whole Berlin as well as the highest retailers rents on the east side of the city have been registered here. (continues on page 2) Volume 4, Issue 2 01 February 2013 TOPICS Alexanderplatz The investment market in Berlin in 2012/2013: overview and predictions BATO Projects and References

2 Page 2 ALEXANDERPLATZ... (continues from page 1) Not a big surprise since the interurban and regional train station at Alexanderplatz is the biggest junction in East Berlin and the second biggest after the central railway station Hauptbahnhof. The square is occupied by various office and shopping-centres. The most massive buildings are the refurbished Galeria Kaufhof (already existing during Wilhelminian and GDR times); the shopping mall Alexa (opened in September 2007); and the office building Die Mitte (March 2009). Other worth mentioning building is the Park Inn Hotel. Moreover Alexanderplatz is connected to the trendy area of Hackescher Markt via Dircksen- and Münzstraße. However the square continues to change constantly and in the following paragraphs we will introduce you to the latest rental and construction projects. The spring of 2013 is going to be marked by a very special event the Irish low-cost fashion giant Primark will open its second shop in Berlin. With the impressive 6.500m² of retail space this was the biggest rental contract in the area for Primark will overtake the place of Saturn and will surely attract even more visitors to the square. Other comparable tenant is the Hofbräu Haus at Karl-Liebknecht- Straße 30 (since September 2011). The Munich brewery is spreading over 6.000m² thus being the biggest of its kind in Europe and a major tourists attraction. However what Alexanderplatz is really missing is space for small and mid retailers. There are hardly any spaces for smaller shops except in the Alexa shopping centre. Even though the square is an important commercial point on the east side of the city, it is still behind other major locations in Berlin. In any case there are some current developments which are most probably going to push it up the ladder. ALEA 101 ALEA 101 is the ambitous project of Redevco Services Germany. It is situated at the foot of Berlin s TV tower and is being constructed according to green concepts with a breath-taking view over the historic city. Once ready the building will be assessed according to internationally recognized certification systems for sustainable buildings (BREEAM, DGNB). Actually, it has already been awarded a Gold pre-certificate by the German Sustainable Building Council (DGNB). ALEA 101 foresees a 30-metre-high stand-alone cube with five floors and a basement. Of the approximately 19,000m² floor space, ca. 10,000m² will be dedicated to retail and restaurants. About 90% of this space has already been rented to wellknown companies such as TK Maxx, AktivSchuh, Olymp & Hades and Vapiano. On the third and fourth floor there will be 3,200m² of office and residential units which will offer tenants flexible floor plan division solutions. In addition to that the future tenants of the 14 apartments ranging between 65m² to 185m² will enjoy upscale home equipment, dedicated spaces in the underground parking garage, comfortable loggias with wooden floors and an inner courtyard designed by landscape architects. ALEA 101 should be ready in the spring of More info at: ALEX II ALEX II is an ambitious residential and hotel project which will be developed in the Alexanderstraße with a view over the Spree. The idea is to create a green building with 25 exclusive car lofts including luxury suites and apartments from the 8 th to the 21 st floor; 165 hotel rooms and 3 levels of mobility centres. The first three floors will offer to the guests and visitors various gastronomy facilities, conference rooms and wellness centre. Not to mention the car lifts which will be taking the private vehicles to the given suites and apartments. This project is quite similar to ALEA 101 however the emphasis here has

3 Volume 4, Issue 2 Page 3 with wooden floors and an inner courtyard designed by landscape architects. ALEA 101 should be ready in the spring of Further information at: ALEX II ALEX II is an ambitious residential and hotel project which will be developed in the Alexanderstraße with a view over the Spree. The idea is to create a green building with 25 exclusive car lofts including luxury suites and apartments from the 8 th to the 21 st floor; 165 hotel rooms and 3 levels of mobility centres. The first three floors will offer to the guests and visitors various gastronomy options, conference rooms and a wellness centre. Not to mention the car lifts which will be taking the private vehicles to the given suites and apartments. This project is quite similar to ALEA 101 however the emphasis here has been set on the unique residential units which will create a whole new apartment class in Berlin. If you are interested in the project ALEX II and would like to receive more information do not hesitate to contact us at: info@batogroup.com up to the newest standards and construction requirements. The WBM Wohnungsbaugesellschaft Berlin Mitte mbh recognized the development potential in this currently rather unattractive spot and will thoroughly refurbish and modernize it in the near future. Beside these official construction and rental developments there have been rumours for various others projects which still have not been confirmed. One is sure; the face of Alexanderplatz will continue to improve significantly in the foreseeable future and will definetely set new commercial and residential standards in the city. Sources: 1) 2) 3) Redevco: ALEA 101: SHOPPING - WORKING LIVING) ( - in- e u r o p e / g erm a n y/ p o r tf o l i o / germany-alea101-alexanderplatz/) 4) ALEA 101:( 101.de/) 5) Einzelhandelsreport Berlin, CBRE June 2012 ( The redesign of Berlin Carré The shopping arcade Berlin Carré on the back side of the Galeria Kaufhof in the Karl-Liebknecht- Straße opened in 1969 and was last modernised in 1993 thus not being

4 The investment market in Germany during proved to be the year of commercial real estate investing in Germany. A 9% increase was noticed according to figures published by BNP Paribas Real Estate (BNPPRE) which translates into 25.6bn. Moreover this is the 3 rd best value since the big investment boom during 2006 and These record results were mostly due to the great investment activity in Q4 and an increased interest in portfolio deals. The transaction volume during the last months of 2012 rose to the impressive 10.5bn which are +70% compared to the previous year. Portfolio sales grew by 23% and the most preferred location was again Berlin, which recorded impressive +65% in revenues arriving at 3.85bn, followed by Munich (+26% to 3.62bn). However residential portfolios had their strongest moment since 2007 as well. According to Savills, the transaction volume was 10.45bn which is 46% more than the previous year. While some big portfolio transaction pushed up the numbers there was also increase in all other size classes as well. These amazong results are expected to continue in 2013 since the attractiveness of the German real estate market remains high according to latest research by Ernst & Young called The real estate trend barometer Just as it happened last year 99% of the respondents evaluated Germany as attractive or very attractive investment location. The top investment target for residential investments remains Berlin, while in the office segment Hamburg and Munich have pushed Frankfurt to the third place. Berlin celebrated one of its best years on the investment market as well. Circa 3,95 billion euro which is corresponding to ca.70 % more than the investment volume in 2011 were amounted in the German capital (Immobilien-Newsticker.de, 2013). That was the second best for the city result during the last 10 year and the undisputable number that put it on the first place among the BIG 7 (Berlin, Düsseldorf, Frankfurt, Hamburg, Köln, München und Stuttgart). Some interesting facts from the Berlin investment market this year There were 8 transaction that cost some hundreds of millions summing up to 1,68 billion which corresponds to 43% of the overall investment volume. The three biggest transactions were executed by foreign investors. Among the 50 to 100 million euro transactions there was a above average result of 10 acquisitions accumulating 16% of the overall investment volume. Most of the transactions were in the office segment the biggest ones in the retail segment (more information about the previous in BATO newsletter from December 2012) The situation on the residential market in Berlin As during the previous 3 years in 2012 the demand for condos was excessive. Luckily this was supported by a slight increase in the supply however not equally distributed among the various neighbourhoods in the city. In the Wohnungsbarometer 2012 (tr: residential barometer) an expert survey by IBB (Investment Bank Berlin) some clear trends on the residential market were pointed out. Currently the German capital resi- dential market is marked by a deficit in condos supply. If you currently to buy a home or an asset in Friedrichshain-Kreuzberg, Charlottenburg-W ilmersdorf or Steglitz-Zehlendorf you can be really struck by the lack of supply. So in this moment it is better to keep an eye open for upcoming neighbourhoods which are currently offering enough condos such as Treptow- Köpenick and Mitte, Tempelhof- Schöneberg and Lichtenberg. While situation is still rather balanced if you want to buy an apartment, the rental market is growing more and more critical. Demand for lower and mid-price segment accommodations is so high that it exceeds dramatically the supply.

5 The investment market in Germany during 2012 It is getting especially hard-to-find in the first place in the current modern neighbourhoods: Friedrichshain- K r e u z b e r g a n d T e m p e l h o f - Schöneberg followed by all others (except Marzahn-Zellendorf). Rental apartment s supply in the lower price segment is even scarcer. The only neighbourhoods where you could still find something at a modest price are Neukölln, Lichtenberg and Mazahn-Hellersdorf. However situation there will worsen significantly in the next years due to m² prices increase and the slow but secure gentrification of the areas (except Marzahn-Zellendorf). The experts prediction about the future in the IBB residential market barometer report foresees a rise in all residential segments in both rental and acquisition interest for all type of properties. To sum up in the next there will be a constant increase in the demand for leasing and/or acquiring apartments (condos) in all residential segments. Low price condos to rent in Neukölln, Steglitz-Zehlendorf and Tempelhof- Shöneberg will experience a moderate increase in the interest towards them while all other n e i g h b o u r h o o d s ( e x c e p t Reinickendorf) will go through a sharply rising demand. On the other hand the demand for mid-price apartments in C h a r l o t t e n b u r g - W i l m e r s d o r f, Friedrichshain-Kreuzberg, Steglitz- Zehlendorf, Marzahn-Hellersdorf, Pankow, Treptow-Köpenick and Spandau will rise dramatically. Last but not least the higher price segment will also undergo some changes in the demand with a strong increase in Friedrichshain-Kreuzberg and Neukölln and moderate increase in all other neighbourhoods except Steglitz-Zehlendorf where it will stay constant. Sources: 1) 2) 3) Ernst & Young "Trend Barometer 2013" 4) IBB Wohnungsbarometer 2012

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