Part new-build and part renovation, Stralauer Allee is a unique boutique development that sits at the heart of the expansive Mediaspree regeneration scheme that has been driving gentrification in Friedrichshain over the past decade. With very little residential construction going on in Berlin, this is a fantastic opportunity to invest in some of the city’s limited supply in an area where demand and prices are growing every year. Stralauer Allee essentials - 24 high-standard 1/2-bed apartments along the River Spree - 2 exceptional sixth-floor penthouses with stunning terraces - Average price of EUR4,831 per square metre - Central to the ongoing Mediaspree development masterplan, among Berlin’s largest regeneration schemes - Short commuting distance from employment hubs in Mitte - Sizes from 37 – 157.2 square metres - Freehold title - Estimated completion date Q4 2016 - Up to 60% LTV financing available - Rental yields of up to 5.43% - Starting from EUR135,000 Branching out into new markets that offer a solid investment case is a strategy I am always keen to recommend to investors, and I’m convinced Berlin presents some of the world’s best untapped property investment opportunities right now. Friedrichshain is a fashionable and growing part of the cosmopolitan German capital, and with local investment and regeneration continuing apace, now is an excellent time to enter a market that combines high growth-potential with significantly lower entry costs than other comparably stable world markets. Berlin investment case Economy and population trends With national GDP at EUR2.74 trillion, Germany is the world’s fourth-largest economy and Europe’s economic powerhouse, with growth forecast at 1.5% across 2015 and 1.6% across 2016. Berlin has mirrored this economic strength, with the highest GDP growth of all German states between 2005 and 2012 and unemployment reaching a 20-year low in June 2014. The city boasts a unique entrepreneurial business culture and is Europe’s third-most-attractive city for investors after London and Paris. Forecasts expect new startups alone to create 100,000 new jobs by 2020, with the IT sector particularly significant. German Chancellor Angela Merkel recently described Berlin as “a fusion of classic industry with the digital world”. Already Germany’s largest and Europe’s third-largest city, in 2014 Berlin’s population reached 3.52 million, having grown by 63% over the preceding 25 years. This relatively recent growth following the fall of the Berlin Wall has been largely migration driven, which has contributed to Berlin’s status as Germany’s youngest city. Forecasts for continued population growth in Berlin are strong, with 254,000 new residents expected between 2011 and 2030, which would represent further growth of 7.2%. Real estate Berlin is suffering from a major residential supply shortfall, with new construction at the lowest level seen among Germany’s seven largest cities. There are only 226 projects in development across Berlin at the moment, and the less than 18,000 apartments those projects will deliver is expected to fall well short of meeting the city’s rising level of demand. Residential sale prices in Berlin have been rising steadily over the past few years, with average price growth for the Berlin apartment sector at 11.7% across 2014. The high-demand/low-supply situation is also driving growth in the city’s rental market. High rental demand is evidenced by Berlin’s low homeownership rate – at just 14-16% among the lowest in Germany ­– and subsequently average rent in Berlin rose 6.6% in 2014. Friedrichshain investment case The impressive employment growth seen across Berlin is even more pronounced in the district of Friedrichshain-Kreuzberg, with unemployment having fallen by 49% between 2005 and 2012. This fashionable part of Berlin is also one of the city’s fastest-growing areas by population, which is up 3% since 2011 and is expected to rise a further 8.6% through to 2030. The centre of Friedrichshain is home to the expansive Mediaspree masterplan, a scheme that has been transforming the area over the past decade. One of Berlin’s largest private-led regeneration programmes, Mediaspree has seen a huge number of underdeveloped plots of land along the river repurposed to provide brand new office, retail and residential space. The project spans 3.7 kilometres along both the north and south banks of the River Spree, with a key focus on urban renewal and uplift of the surrounding area. Featuring a number of ambitious architectural concepts, Mediaspree has already seen the completion of more than 30 new developments, with some 20 more planned or already in progress. The scheme will eventually have seen several hundred million Euros invested in this newly transformed part of the city. Real estate Friedrichshain-Kreuzberg was one of Berlin’s top-performing districts in terms of price growth in the apartment sector in 2014, posting a 17.8% average increase across the year. Focusing on the top segment of the city’s condominium market ­– the level at which Stralauer Allee apartments will enter the market ­– shows Friedrichshain-Kreuzberg as the best-performing district in the city, with growth of 12.3% across 2014. Average rents among top sector apartments in Friedrichshain-Kreuzberg have also outperformed, with 4.3% growth across 2014 significantly higher than the citywide average of 2.6%. Up-and-coming city-centre neighbourhood Görlitzer Park – just across the river from Straluaer Allee ­– saw particularly notable performance in 2014, with rents up 11.5%.