Berlin tech, Berlin boom
High-flying real estate investors are employing specialist tech teams to get an edge and to maximise efficiency and profitability. As one chief executive of a major global firm tells PwC for its Emerging Trends in Real Estate research, conducted together with Urban Land Institute, “We have a completely different focus on technology and technology investment now. We’ve doubled the budget in last 24 months, and it was high before that. I don’t have a board meeting without a tech guy being present.”
And innovation is one reason Berlin is tipped as Europe’s hottest real estate investment market in 2015, with the report citing the city for being a technology, media and telecoms hotspot. “What I like about Berlin is that any new product launch must include Berlin – tech, fashion, cars,” says one interviewee.
The truth is, though, that Berlin really doesn’t have a sound economic base. It might boast start-ups such as music streamer SoundCloud and games company Wooga, but it hasn't been able to lure many major commercial organisations. What PwC is pointing to here is residential property speculation, something Germany hasn’t really known until recent years. Investors are being sucked in by what they consider relatively inexpensive Berlin assets and development opportunities.
“Real estate is awash with equity,” the report says. “Most of Emerging Trends Europe’s survey respondents and interviewees anticipate an increase in both prime and secondary values as a result of greater liquidity and the need to deploy capital in this asset class.”
What’s really interesting is that nearly two thirds of those surveyed believe that core property is overpriced in almost all markets.