Berlin Bursts onto the Main Stage for Hong Kong Real Estate Investors
HONG KONG, August 30, 2016
The recent arrival of real estate companies with a focus on Berlin reflects the global trend of German property investment
All eyes are on Germany’s capital city and for good reason. With low level real estate entry prices and a very bright future, it is no coincidence that global investors are directing their money to this glimmering crown of Europe.
Buy Berlin is the first specialist real estate company to launch its Berlin-focused services to Hong Kong having been introduced to the local market by Fifth Element.
Jonathan Benarr, founder of Fifth Element, says, “We really feel that we are pioneering something new. Helping Buy Berlin enter Hong Kong means local investors can invest into Berlin real estate with a fully supportive turnkey service provider.”
Buy Berlin was established ten years ago in Germany, providing foreign investors with specialist services for the Berlin property market, and has just opened its first Asian office in Hong Kong.
Darrell Smith, founder of Buy Berlin, says “Hong Kong was a natural choice for us. It is a city of experienced investors who welcome the opportunities that new markets bring. We are solely focused on Berlin real estate – no other company knows the city like we do – and we know that Hong Kong will turn to Berlin in the same way it did to London, New York and Sydney. This is the capital city of Europe’s powerhouse and yet real estate prices are still well below where they should be. With only HKD400,000 to invest, a Hong Kong person could quite easily own an apartment in Berlin and have only 54% owing on the mortgage.”
Berlin is attracting a lot of interest for a number of key reasons – 0% CGT after ten years is ideal for longer term investors; prices are lower than in all the other major German cities and yet Berlin is the country’s capital; inward investment is going into substantial development and infrastructure projects around the city; and did we mention free university education for all?
Whilst there are companies, such as Buy Berlin, who operate as an independent real estate agency for the German market, there are others such as Fifth Element, who work in partnership with agencies and developers to provide consultancy and advice for Asian investors, both individual and institutional.
Jonathan Benarr, founder of property consultancy Fifth Element, says he established the company in Hong Kong because of the apparent gap that needed filling.
He says, “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. We now want to open this market up to residential investors by removing as many of the barriers to entry as possible, starting with educating potential investors on the market, the process, the few cons and the considerable pros.”
Many countries, including Canada and Australia, have introduced taxes to deter foreign investors and whilst London is still a golden market, its real estate values are going ever skyward making it increasingly difficult to enter. Berlin is unique because it offers a European Tier One capital city at Tier Three pricing, unheard of anywhere else, making it ideal for both new investors and those wishing to broaden their portfolio.
It isn’t without its complications though. German bureaucracy is renowned for its challenging nature not to mention the difficulties that a different language can bring when investing overseas.
Moreover, the quality of property management in Berlin has traditionally been poor, with none of the standard services that international investors have come to expect being offered, such as tax advice, property checks and tenant reviews.
Darrell Smith continues: “Buy Berlin offers a full turnkey package for investors, from tax support to advice on legal issues. We have English, German and Chinese speakers in our offices. We find tenants for the properties, both corporate and individual, and our personal service extends to the tenants too – we do our best to make them feel at home as quickly as possible with round-the-clock assistance, welcome packs and a check-in team on hand.”