All Eyes on Germany
Global Residential Conference 2018 in London
By Dorothea Metasch
International networking at the highest level: Once a year, more than 160 attendees from 53 countries attend the Knight Frank Global Residential Conference in London. With such an audience it was quite an honour for me to attend a Ladies Panel and to discuss local market situations, including their opportunities and challenges for investors, with representatives from Australia, China, the United States, the United Arab Emirates and Germany. One of the talk’s takeaways was this: The German market is highly relevant, especially for US, UK and Chinese investors.
After all, the entry-level prices for newly-built condominiums in Germany are low by international standards, and the real estate transfer tax makes no distinction between domestic and foreign buyers. Moreover, condominiums in triple A locations are still available, including in Frankfurt and Berlin. The prospect of living in a riverside spot in downtown Berlin or in an inner-city location in Frankfurt, among the high-rises of this European financial hub, is a tempting proposition in and of itself. So, it comes as no surprise that projects like “FOUR Frankfurt” or “No. 1 Charlottenburg” increasingly attract the attention of an international client.
As it is, we have noted that foreign buyers account for an above-average share of 43 percent in Berlin’s prime segment, and it should be added that one in two acquire their condominium for owner occupancy. This highlights the appeal of the city itself as an international hot spot and cultural melting pot. Artists feels particularly drawn to Berlin, as the New York Times recently reported during Berlin’s annual gallery weekend in a piece titled “In Berlin, Artists Find A Home.” It is the way fellow estate agents from New York see it: “We have Berlin on our list,” said Susan de França, President and CEO of Development Marketing at Douglas Elliman, New York’s most renowned residential estate agency. She is planning her Berlin trip for September.
At the same time, Germans have shown serious interest in New York City condominiums, and the fact is reflected in the rankings of the Knight Frank Wealth Report. As in previous editions, the Big Apple tops the list of the report’s 2018 issue in terms of wealth, investment opportunities, lifestyle and growth. Personally, my favourite project there is currently 125 Greenwich in Manhattan. This is a skyscraper by Rafael Viñoly whose three top floors are open to all of the building’s residents: levels 86 through 88 feature gym, pool, private dining, library, and of course an amazing view.
Product as such was an important topic at the panel as well, as was the issue of market opportunities, especially as property developers rely increasingly on the customer insights when it comes to developing future projects. As far as quality-of-life amenities go, projects in New York City are no doubt exceptional. The trend toward extra options has generally begun to reverse itself with a view to their costs for residents. But being connected to a premium hotel is something becoming ever more popular. It lets residents take advantage of exclusive services without having to keep capacities and floor areas on hand for these purposes. A project of exactly this type is under development in my favourite city, Sydney: One Barangaroo—the perfect combination of a 6-star hotel and 82 exclusive apartments.