Avison Young in Berlin
Avison Young opened its Berlin office in July 2016, our fifth location in Germany. Our team in Berlin provides our clients direct access to the capital’s real estate market, and customized real estate solutions focused on office leasing and investment for the Berlin metropolitan region.
Berlin and its surroundings, including Potsdam, have emerged as a dynamic and growing metropolitan area over the past years. The German capital, with its vibrant and bustling urban life-style, attracts companies, visitors and young people from around the world. They appreciate Berlin’s cultural amenities, universities and research institutions, alternative sub-cultures, and scenic parks and rivers - the overall high quality of life Berlin has to offer at comparatively low costs of living.
The German capital is not only the political center of Germany, but also the country’s number one location for start-ups. Some 40,000 companies are founded annually in Berlin. Next to public and government-related institutions, media and technology firms, these start-ups form the city’s economic backbone. Moreover, the number of corporations in the consulting, manufacturing, retail and logistics industries opening major offices in Berlin is rising. Accordingly, employment growth is positive and unemployment decreasing.
In terms of office stock, Berlin is the second largest office market in Germany with some 18.4 million square metres (Munich, by comparison, includes 20.8 million square metres). However, the German capital is number one in terms of office take-up driven by its dynamic start-up scene and high office demand from corporate and government institutions.
Strong office demand and comparatively low completion figures lead to decreasing vacancy, most of all in the centre of the capital. Berlin’s prime office rents have edged up and are likely to rise further in the months to come. Similarly, average rents across Berlin’s office submarkets remain under upward pressure.
Berlin is home to Germany’s most exciting retail pitches and retail concepts. National and international retailers catering for the younger urban crowd favour the area around Hackescher Markt in the Berlin Mitte submarket. In contrast, luxury retailers are located in Friedrichstraße in the Mitte submarket and traditionally on Kurfürstendamm, Berlin’s top luxury prime pitch in Berlin’s CBD West. Popular and highly-frequented high street retail locations in Berlin’s CBD West are Tauentzienstraße and the eastern part of Kurfürstendamm, where some of the highest retail rents in the country are recorded.
Shopping around Potsdamer Platz and Leipziger Platz becomes ever more attractive, featuring the shopping centers Potsdamer Platz Arkaden and Mall of Berlin. Moreover, the location is right in the heart of the capital within walking distance of some of the capital’s most visited tourist sights. The most important shopping destination in Berlin’s CBD East is the area around Alexander Platz, where Alexa shopping centre is located.
The Berlin greater metropolitan area is home to some 6 million inhabitants making it a prime target destination for logistics companies. The favorable location along highway BAB 2/10/12 linking major European agglomerations from Amsterdam to Warsaw is also a strong draw for logistics entrepreneurs. Consequently, industrial take-up volumes have risen in recent years and are anticipated to remain at a high level, with prime rents expected to rise.
Berlin has turned into one of Germany’s top investment target. National and even more so international investors value the capital’s strong office, retail and logistics leasing markets, its economic strength and most of all its growth potential. Investors clearly have focused on Berlin’s central locations; however, as pricing is increasingly competitive in these central locations, investors have widened their investment focus and are considering and taking opportunities on the city fringe and in more peripheral submarkets. Yields have tightened across all segments and submarkets and remain under pressure.