Low-level entry prices could make the German capital more appealing to HK investors
Earlier this year, Germany dethroned the UK as Europe’s most attractive country for commercial real estate investment in an annual survey by CBRE. Even so, Hong Kong investors have overlooked property prospects in the country, especially Berlin.
Now, German real estate firms are heading to Hong Kong to put in a good word for the underrated capital city. Buy Berlin, a real estate company that specialises in turnkey services for overseas investors in Berlin, recently opened its first Asian office in the Chinese SAR.
“We know that Hong Kong will turn to Berlin in the same way it did to London, New York and Sydney,” said Darrell Smith, founder of Buy Berlin. “This is the capital city of Europe’s powerhouse and yet real estate prices are still well below where they should be.”
Residential prices in Germany have been increasing at their fastest rate since the housing boom following the fall of the Berlin Wall, with property values in major cities such as Berlin, Hamburg and Munich growing by as much as 30 percent over a span of 5 years.
Despite being a tier-one capital city in Europe, Berlin still offers tier-three pricing, lower than all the other major German cities, according to Buy Berlin. “With only HKD400,000 to invest, a Hong Kong person could quite easily own an apartment in Berlin and have only 54 percent owing on the mortgage,” Smith said.
Among other reduced barriers to entry, long-term investors stand to be relieved from capital gains taxation after ten years in the Berlin market.
Fifth Element, a Hong Kong-based consultancy that assists Asian investors exposed to European real estate markets, is working with Buy Berlin to reintroduce the German scene to Chinese investors.
“Hong Kong is an international market place for global real estate with weekly exhibitions covering cities from the UK, America, Canada, Australia, Thailand, Singapore – even Mongolia – yet a glaring omission to this landscape was German real estate, an internationally sought-after asset class,” said Fifth Element founder Jonathan Benarr.