Berlin’s burgeoning tech sector is triggering a new wave of residential development in the city, as international investors realise the income potential of the local market.
Recently ranked the top investment destination for global venture capitalists, Berlin is becoming the hub of technology, media and telecom startups, attracted by low commercial rents and a business friendly environment. A recent report by PWC and the Urban Land Institute declared that the German capital offers the most attractive investment and development opportunities in Europe.
The city is seeing large-scale regeneration projects, aimed at courting both domestic and international companies. For example, Media Spree will be an entirely new urban city quarter for an estimated 40,000 new jobs, mostly in the tech sector, and 8,500 residents.
Areas such as Mitte, Kreuzberg, or Friedrichshain, which were traditionally considered rough, are quickly becoming upscale, thanks to the category of affluent workers who want to live in central locations. Ziegert has marketed 900 apartments in these areas and the demand is continuously increasing.
Apartment prices across Berlin have doubled from their modest 2008 levels of 1,500 euros per square meter up to an average of 3,000 euros. Until recently, Berlin hadn’t been considered particularly appealing for real estate investments. Population growth was sluggish as was the economy.
With economic growth in the capital outpacing the country’s national average over the last decade, Berlin is no longer considered a poor place. Even during the global financial crisis, Berlin’s economy managed to grow by around 1% per annum, as the city’s population increased with new residents attracted by improving living standards, good infrastructure and a dynamic cultural and social scene.
