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Friedrichshain beyond
the Simon-Dach-Kiez Friedrichshain has been in the real es-
tate investment and development spot-
light for some years now- and with a
good reason. The percentage of pre-
served historical buildings is rather high.
A big part of it stretches along the river
and includes the major project Medi-
aspree. Moreover it offers some of the
most exclusive event locations (O2
arena), cult clubs (Berghain, Watergate
and Spindler & Klatt) and the popular
going-out area – the Simon-Dach-Kiez.
The population of the neighbourhood is
among the youngest and includes
mostly the higher educated profession-
als.
However there are still some neglected
corners which remained in the shadow
of the Simon-Dach-Strasse. Now these
corners are coming into light thanks to
the great amount of investments into
their infrastructural improvement which
turned them into hidden residential tips.
Therefore we would like to investigate
one of those places the area tucked
between the Petersburger Straße on the
east, the Landsberger Allee on the
north, the Karl-Marx-Allee on the south
and the Saint George Cemetery on the
west. Not much popular among the tour-
ists due to the fact that it has much
lower number of cafes, restaurants and
clubs, it is turning into a residential para-
dise with the Richard-Sorge-Straße as
its main axis. The public transport con-
nections are very good with the tram line
M10, the urban train and subway sta-
tions Storkower Straße, Frankfurter Tor,
Landsberger Allee and Weberwiese.
Stretching from the Lansberger Allee up
to almost Karl-Marx-Allee (Weidenweg)
this street is containing many listed
buildings. The most symbolical of them
are the former brewery Friedrichshöhe
on the corner of Richard-Sorge-Straße
and Landsberger Allee currently used as
an event and exhibition location; and the
listed former chocolate factory situated
at Nr. 21A/22, also known as the Ernst-
Lemmer-Haus, redeveloped as an ex-
clusive residential multi-family house.
Worth mentioning is as well the small
wooden Christuskirch (Christi Church) at
Richard-Sorge-Straße 14/15. It was
completely destroyed during the Second
World War and then resurrected of
wood as temporary church in 1948 with
donations from American Methodists
and built by the Swedish construction
company WST Blockhus. This strikingly
small church among the residential multi
-family houses was supposed to be re-
placed by a new one in the 90s instead
it received a status as a listed building
and today it welcomes visitors not only
for worships but for various concerts as
well.
(continues on page 2)
04 October 2012
Volume 3, Issue 10
Highlights
Friedrichshain beyond the
Simon-Dach-Kiez
To be or not to be...afraid of
housing bubble in Berlin
Another symbolical place in the Richard-
Sorge-Straße is the cinema Tilsiter
Lichtspiele. The small location on the
ground floor of number 25A first opened
in 1908 only to be closed in 1961 and
then reopened after the Fall of the Berlin
Wall. It offers a cosy theatre hall with ca.
60 places including comfy sofas and a
pub which can be used also for different
events. What is particular for this place is
that they offer very independent film pro-
gramme including many documentaries
and European films mostly shown in
original language.
Needless to say that the calm residential
character of this perfectly located street
attracted new construction projects in-
cluding also exclusive apartment- and
town houses. Situated next to the old
brewery and next to the Saint George
Cemetery they were immediately sold
and let after their completion in 2010.
Current vacancies are offered at ca. 9 €/
m².
Back in the 2007-2010 investors and
residents were able to purchase such
exclusive residential units in the area for
price of 2.600 €/m²; now prices vary be-
tween 2.700 €/m² and 3.700 €/m². They
are relevant for new construction pro-
jects such as the luxury penthouses at
the corner of Mühsamstraße and Eckert-
straße and the apartments in the Mat-
ternstraße 19.
Apart of the new constructions most of
the old buildings in the area were refur-
bished, or are currently being refur-
bished; thus contributing to the overall
improvement of the neighbourhood.
Even the former rather neglected Peters-
burger Platz has turned into a nice small
landscaped park with its symbolical mar-
ble fountain in the form of a globe and a
big children playing field.
To sum up this area is to be rapidly re-
considered in order not to miss the good
investment opportunities that can be
undertaken right now. Given the sharply
rising residential prices in 2 years it may
not be as affordable as now
For more information do not hesitate to
contact us: [email protected]
Sources:
1) FRIEDRICHsHAIN, Zeitschrift für
Stadternerung, 18.Jahrgang, September
Heft 3/2012
2) Wikipedia
ht tp : / /de .wik ipedia .org/w ik i /
Richard-Sorge-Stra%C3%9Fe
(24.09.2012)
ht tp : / /de .wik ipedia .org/w ik i /
L i s t e _ d e r _ S t r a % C 3 %
9 F e n _ u n d _ P l % C 3 %
A4tze_in_Berlin-Friedrichshain
(24.09.2012)
3) Tilsiter Lichspiele Homepage, http://
www.ti lsiter-lichtspiele.de/kino.html
(25.09.2012)
Friedrichshain beyond the Simon-Dach-Kiez
Page 2
To be or not to be…afraid of a housing bubble in Berlin?
Currently billionaire George Soros
created a lot of concern about a real
estate bubble which in his opinion is
about to burst in Berlin. As reported by
many business magazines such as
Bloomberg he claimed that Berlin homes
are becoming overvalued because
demand is being pushed by buyers
seeking a safe investment to put their
money in.
However should we really take these
negative predictions seriously?
Everybody has been aware of the
clear price increase, but is that a real
threat to the German market?
Already in August 2012 the Cologne
Institute for Economic Research (IW)
published a research regarding the price
development in the German housing
market. What they did was to examine
the market for any signs of bubble
formation such as excessive credits
lending, frequent sales and high prices
compared to rents and income. The
conclusion was that people should not
fear a bubble (2*).
As already mentioned the great increase
in prices in the housing market in the five
major cities in Germany could not be
denied. From 2003 to 2011 apartments’
prices in Berlin rose with 39%, in
Hamburg with 31%, in Munich with 23%,
in Frankfurt am Main with 14% and in
Cologne with 10,5%. (2*) However those
price developments were following
fundamental factors such as rents and
income, which excludes a downward
price correction for the time being,
comments the director of the Cologne
Institute for Economic Research (IW)
cited by “Die Welt”. The high demand for
housing in the metropolises is supported
by the trend of settling back in the city
thus increasing prices that were lower
than the normal for a long time and cre-
ating a “catch-up effect”. Despite that
living costs in Germany remain rather
low compared to those in other Euro-
pean capitals. In Berlin an average of
21% of the income goes for covering
those expenses while in London the av-
erage is ca. 40%.
The German financing practice is a
further stabilizing factor for the property
market claims the report. An expansive
lending as the one that preceded the
housing bubble in the U.S., Spain and
Ireland, does not exist in Germany. The
holdings of real estate loans in Germany
increased by seven percent from
January 2003 to April 2012; however in
Spain and Ireland, the stocks were
expanded by more than 150 percent
before the housing bubbles exploded.
Moreover currently there is a noticeable
increase in the private equity by real
estate purchase and a faster credit
repayment in Germany.
Even though the greatest price increase
is observed in Berlin, the most expensive
residential real estate is still in Munich
where the sqm costs almost the double
than in the German capital: 4.200€
compared to 2.200€. In Hamburg the
number is ca. 3.100€. And with this price
Berlin’s average is still less than one-
third of the one in Paris and less than a
quarter of the one in London. Two years
ago it beat Rome as the third-most
visited destination in Europe after
London and Paris and unlike the rest of
the country, Berlin has been growing by
population, becoming more and more
popula r wi th young creat i ve
p ro fess iona ls and techno logy
entrepreneurs. The city even arrived at
the point to be called the new Silicon
Valley.
Needless to say that these reasons have
been attracting investors and pushing up
the housing prices thus arriving at the
current levels. Despite that there is no
need to be afraid of a housing bubble
due to the stable German financing
practice and the positive development in
the overall population income which
results into more private equity and
faster loan repayment during house
purchase. A real estate bubble may
happen only when the purchase prices
increase faster than the rents on the long
term. But this is definitely not happening
now.
BATO Group experienced that the high
number of young professionals moving
to Berlin changed the real estate market
in a positive way. Not only foreigners but
also Germans started buying their own
homes in the capital due to their higher
income. The city has been offering much
more work, the living standards have
been improving and the new Berliners
have much more financial opportunities
than those before. Therefore they have
been investing actively in „bricks“ and
the increased demand ended logically in
higher prices. However as previously
mentioned this is not a reason to beware
a housing bubble. Not yet and hopefully
not in the future.
* Sources:
1) Czuczka, T. and Fahmy, D., 2012.: Soros Sees Threat of Bub-ble in Berlin’s Housing Market. Bloomberg, [online] 11.09.2012. A v a i l a b l e a t : < h t t p : / /www.bloomberg.com/news/2012-09-11/soros-says-berlin-housing-market-in-danger-of-becoming-a-b u b b l e . h t m l > [ A c c e s s e d 12.09.2012]
2) Pomogajko, K. and Voigtländer, M.,2012: Von einer Blase keinen Spur. Institut der deutschen Wir tschaf t Köln , [onl ine] 2.08.2012. Available at: <http://www.iwkoeln.de/de/infodienste/i w d / a r c h i v / b e i t r a g / 8 8 4 3 0 >[Accessed 10.09.2012]
3) Voges, J., 2012.: Deutsche Städte von Immobilienblase weit entfernt. Die Welt, [online] 02.08.2012. Avalable at: <http://www.welt.de/finanzen/immobilien/ar t ic le108459221/Deutsche -Staedte-von-Immobilienblase-weit-ent fe rnt .h tml> [Accessed 10.09.2012]