Demand for luxury homes in trendy Berlin districts continues unabated

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1 Demand for luxury homes in trendy Berlin districts continues unabated Consistent rise in property prices in central, sought-after locations Luxury real estate is attracting investors from around the world Hamburg/ Berlin, 17 June The residential property market in Berlin continues to see dynamic growth and is witnessing ever-higher prices in the capital s most fashionable districts. The German economy is still regarded as very stable and is attracting many private buyers and investors from around the world to Berlin. The city has cosmopolitan flair and has established itself firmly on the map as a cultural, financial and political centre. The high level of demand for exclusive residential property is leading to significant price hikes in Berlin s central districts. Meanwhile the demand for properties for sale and for let is exceeding supply by far, said Anne Riney, Sales Director at Engel & Völkers in Berlin-Mitte. Berlin-Mitte in top price bracket at 15,000 euros per square metre When compared internationally to cities such as London, Hong Kong, Moscow or Miami, rental and purchase prices in Berlin still remain low. Top prices of up to 15,000 euros per square metre are being reached for prestigious rooftop and penthouse apartments, and exclusive new developments at historic addresses in the Mitte district around the impressive Gendarmenmarkt, as well as Hackescher Markt and the magnificent boulevard Unter den Linden. The level of building work is on the increase and many new residential developments are taking shape. But in spite of this there is still a chronic lack of available real estate, especially in prime locations, Ms. Riney added. High-profile and exclusive new complexes being developed in the historic heart of the city include the projects Yoo, not far from the banks of the River Spree behind the Berliner Ensemble and the Theater am Schiffbauer Damm, as well as the Kronprinzengärten on the Werderscher Market. Many new developments can also be found in the immediate area surrounding the newly built headquarters of Germany s Federal Intelligence Service. Districts on the green, peaceful outskirts of the city, such as Zehlendorf, Dahlem and Grunewald in the southwest of Berlin, have traditionally been desirable neighbourhoods and continue to enjoy a high level of popularity. Most sought-after are the grand mansions set in expansive grounds overlooking lakes including the Halensee, Schlachtensee, Grunewaldsee, Nikolassee, Wannsee and as far as Heiligen See in Potsdam. On the Kleiner Wannsee lake, upmarket properties are changing hands for up to 8,000 euros per square metre, and for up to 7,000 euros per square metre on Griegstraße in Grunewald. Located in the wealthy western part of the city, Charlottenburg, one of the most desirable residential areas in Berlin, has also seen a significant increase in demand once again. Refurbished apartments dating back to the Wilhelminian period on the world-famous Kurfürstendamm boulevard, on Mommsenstraße and Bleibtreustraße are particularly soughtafter amongst buyers. At these desirable addresses, prices can reach as much as 7,500 euros

2 per square metre. Properties are very limited in number in prime locations around the Kurfürstendamm and prices have risen considerably over recent years. This trend is set to continue in future too as the demand both for prestigious old and modern apartments in Charlottenburg is extremely high, said Magnus Strümpfel, Managing Director at Engel & Völkers in Charlottenburg. Districts bordering directly on to Berlin-Mitte, such as the trendy Prenzlauer Berg neighbourhood, are attracting ever-greater numbers of investors. Sought-after addresses include Kollwitzplatz, Helmholtzplatz, Bötzowviertel and Oderberger Straße. Although prices have not risen quite so sharply over recent years and other neighbourhoods are catching up, buyers are still paying between 3,500 and 7,000 euros per square metre for exclusive freehold apartments. Rental prices for properties in this area have reached as much as 18 euros per square metre. The district of Kreuzberg is also enjoying increasing levels of popularity amongst interested buyers. A continuous rise in prices can be observed, resulting from limited new construction projects and a consistently high level of demand for apartments to buy and rent. At prime addresses on and around Gräfestraße, Bergmannstraße, Marheinekeplatz and Chamissoplatz, prices per square metre for freehold apartments are between 3,500 and 5,000 euros. Rental prices for apartments and houses range from 10 to 15 euros per square metre. A city of tenants is slowly evolving into a city of homeowners The average time-to-market for properties in Berlin s central districts has dropped over the past year from six to three months. Premium properties are being sold straight after the very first viewing appointment in particularly sought-after locations. It seems, in Germany s capital, that both private buyers and institutional investors are not hesitating when it comes to placing their wealth in tangible assets like real estate, either for private usage or investment purposes. More and more Berlin citizens are thinking about buying property in the capital, in light of the rising rent prices and low interest rates, said Ms. Riney, having observed a change in local residents mentality. There is particularly strong interest in townhouses located at absolutely prime addresses. This kind of property combines individual and urban living at the centre of the city. With exclusive rooftop and penthouse apartments, discerning buyers are looking above all for luxurious finishes, high levels of comfort and unparalleled views over the cityscape. Old apartments with high stucco ceilings in quiet side roads are extremely popular in the districts bordering directly on to Berlin-Mitte. High demand from abroad brings added impetus to Berlin s residential property market Germany s capital is a magnet for investors and private buyers from abroad, enticed by its vibrant reputation, cosmopolitan character and international flair. Alongside German buyers, the market is dominated by clients from Belgium, Russia, Switzerland and Luxembourg. Another noticeable trend is that increasing numbers of Italian buyers are investing in freehold apartments in the district of Neukölln and the surrounding area. High-end real estate is proving especially popular amongst small-scale investors in The sale of let apartments to these investors with returns of four to five percent is attracting a great

3 deal of interest at present. Furthermore, investors are increasingly looking beyond top central locations to more peripheral districts. In response to the growth in population, developers are intensifying their efforts to build new homes significantly on the outskirts of the city beyond the reach of the suburban rail network in districts such as Adlershof and Köpenick between the centre of the city and the future airport in Schönefeld. Anne Riney is anticipating a sustained rise in property prices in the long term for the entire residential property market in Berlin. The property expert remains reassured though: I don t see any danger of the market boiling over in the coming years, as the supply of quality real estate remains limited while the level of demand is very high. Clients buying prestigious homes in the premium segment are also doing this predominantly without any third-party financing involved.

4 For further information please contact: ENGEL & VÖLKERS Princess Wittgenstein Head of Global Corporate Communication Stadthausbrücke Hamburg Germany Phone: Bettina.Wittgenstein@engelvoelkers.com About Engel & Völkers: Engel & Völkers is one of the world s leading service companies specialised in the sale and leasehold of premium residential property, commercial real estate and yachts. With its licence system, Engel & Völkers is the only Germany-based firm to rank amongst the top 100 franchise companies in the world.* Around 500 residential property shops specialised in high-class real estate and 44 commercial offices brokering retail, office and industrial space, investment properties, multi-purpose apartment and office blocks and property portfolios offer both private and institutional clients a professionally tailored range of services. Leasing, sales, consultancy and valuations form the core competences of the staff of around 4,200 employees. The Company is currently operating in 37 countries on five continents. Intensive training schemes in its in-house real estate Academy and the high level of quality assurance governing its systematically structured service provision are key factors that account for the Company s success. In 2012, Engel & Völkers was named the most valuable property brand in Germany in the category Property broker by the European Society for Real Estate Brand Observation (EUGIMB). * Source: Franchise Direct Top 100 Global Franchises Ranking

5 Top residential property prices in Berlin Source: Engel & Völkers June 2013 District Address Price in per sqm Mitte Am Zirkus up to 15,000 Werderscher Markt Zehlendorf Am kleinen Wannsee up to 8,000 Charlottenburg Kurfürstendamm Mommsenstrasse Bleibtreustrasse up to 7,500 Grunewald Griegstrasse up to 7,000 Prenzlauer Berg Kollwitzplatz Helmholtzplatz Bötzowviertel Oderberger Strasse up to 7,000 Kreuzberg Gräfestrasse Bergmannstrasse Marheinekeplatz Chamissoplatz up to 5,000