Berlin top office rents tipped to go through roof

A significant increase in the average office rent level is imminent in Berlin, particularly for the top end of the market, according to real estate consultants Winters & Hirsch. The economic recovery in Germany is a major driver of rent levels. The Federal Government expects an 2.3% increase in the gross domestic product for the current year and Berlin is benefiting from this cycle. 'For price conscious investors, buying the right real estate now opens up the prospect of increased return and added value,' researchers at the company said.

The Berlin office of the German Chamber of Trade and Industry (IHK) reckons secure economic growth of 2.0 % as compared to last year. In the mid-term this has also had an influence on the Berlin real estate market. The research team at Winters & Hirsch said it expects an increase in rents for established office locations between 5% and 7% over the coming 12 months.

Premium space in Berlin-Mitte, on the Kurfürstendamm, Potsdamer Platz andPariser Platz is most sought after. For prime locations, Winters & Hirsch said it expects that rents will top EUR 25 EUR per square metre net this year, compared 23 EUR per square metre on Pariser Platz in 2006.

Philipp C. Tabert, Managing Director of Winters & Hirsch Property Consultants GmbH points out, 'The top yields have just about reached their peak level and will only stay below 5% for absolute trophy property in prime locations. For profit oriented investors this means: buy now! This year, Berlin is expected to become the hottest real estate market in the country.'

Winters & Hirsch is an owner-operated and independent property consultants company that advises national and international investors on selling or purchasing commercially as well as investments relating to residential property. The firm oversaw approximately 80 transactions, worth EUR 220 mln, in 2006, of which half involved commercial property.