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The City of Berlin: No Longer Poor, but Still Sexy

By: Armin Völlnagel, SIOR, Tobias Schultheiß, SIOR

In 2003 Klaus Wowereit, Berlin’s first openly gay mayor (2001-2014), declared Germany’s capital to be “poor but sexy,” a reflection of the city’s working-class history, but also its cultural vibrancy. The phrase helped sell the city to the rest of the world and it drew in tourists, artists, musicians and, more recently, technology entrepreneurs. No longer poor, but still a great looking and exciting city, Berlin, is the political center of Germany, one of the most dynamic economic regions in the heart of Europe, and the location of SIORs fourth International Conference this summer.

Berlin impresses with its extraordinary variety of sights, rich cultural life, and a lively yet relaxed lifestyle. It is precisely the contrasts between historical buildings and contemporary architecture; between tradition and modernity; that characterize the city. Berlin's sights tell the story of an entire nation, from the Brandenburg Gate to the Federal Chancellery. The German capital is also home to all major government buildings, including the historic Reichstag, the seat of the German parliament. Berlin is the city of arts, artists, and museums. Over 170 museums, including the world-famous ”Museumsinsel“ (museum island), show the world's treasures. Important orchestras – such as the internationally renowned Berlin Philharmonic – and its three major opera houses with their sensational opera and ballet productions, make Berlin an Eldorado for classical music lovers from all over the world. And the numerous theatres, variety shows, and countless cabarets ensure entertainment for every taste.

With around 3.7 million inhabitants and a catchment area of around six million people, Berlin is the largest city in Germany. The high quality of life with comparatively low living costs, the lively scene, and the international environment attract talent from home and abroad to the Spree. Berlin is one of the largest and most diverse scientific regions in Europe: over 250,000 people from all over the world teach, research, work, and study at state, religious and private universities. Scientists cooperate with over 70 non-university research institutions, including both national and international institutions.

Berlin impresses with its extraordinary variety of sights, rich cultural life, and a lively yet relaxed lifestyle.

When it comes to the economy, in a nationwide comparison, Berlin has been one of the front runners for years. The capital is also ahead in terms of job growth and the creation of businesses. Companies and startups find excellent location factors for their economic success here. Companies that plan to establish themselves in Berlin, or expand their headquarters at the location, can rely on extensive investment and innovation funding.

Economic performance in Berlin is increasing at a very dynamic pace. The gross domestic product increased by 4.9% in real terms in 2022; It had already risen again in 2021 after a decline caused by the pandemic. The economic growth is also reflected in the real estate sector. Berlin is the strongest city among the Big-Seven locations . In parallel to the nationwide development, many investors in the capital are still taking a wait-and-see approach due to the pricing phase that has not yet been completed.

The Berlin office market mostly remained significantly behind the previous year. Large rentals are being held back due to the economic uncertainties. The small and medium-sized segment, however, remains very active. The prime rent increases, due to the demand for high-quality, primely located, ESG-compliant office space, continues to increase, while in return, the average rent has fallen slightly, due, among other things, to existing properties with low ESG compliance. The public administration stands for the biggest demand, but the IT sector continues to be one of the drivers in the office market. Increased ESG requirements on the part of users are currently leading to increased demand for new buildings that have been completed or are at an advanced stage of construction with ESG conformity.

According to CBRE, the number of delays and constructions stops in office projects is rising with increasing insolvencies among project developers. Furthermore, fewer speculative construction starts are expected in the medium term. On the other hand, refurbishments of Berlin’s outdated office stock will increase as there is pressure from owners to transform their space to ESG standards. Locations and property quality are increasingly characterising the market.

New and ESG compliant buildings like the EDGE East Side Berlin, Estrel Tower Neukölln, and Alexander – Berlins Capital Tower –will change Berlin.

  • The EDGE East Side Berlin is being built with the latest sustainability considerations in mind and connects two of the most lively and artistic districts: Friedrichshain and Kreuzberg. Over 65,000 square metres (nearly 700k square feet) of office space is being created here, spread over the 142 metre high building.
  • The Estrel Tower Neukölln will be the gate to the city. The tower will be 176 metres high and is a mix-use property consisting of a hotel, office, and event space. The building is designed for sustainability: from green roofs including photovoltaic systems to wildflower meadows and bicycle parking garages to an innovative CO2-saving energy concept.
  • Alexander – Berlins Capital Tower– will be the tallest residential building, including further usages as shopping, fitness and office. The building will have a hight of 150 metres and comprise a GLA of 42.000 square metres (roughly 450k square feet).

Other landmark buildings around the main station have already been viewed at the European Chapter’s “Mind Your Own Business” conference in Berlin in the Spring of 2023. Therefore, you don’t want to miss the fourth SIOR International Conference being held in Berlin July 17 to 19, 2024! We’ll see you there!


Media Contact
Alexis Fermanis SIOR Director of Communications
Armin Völlnagel, SIOR
Armin Völlnagel, SIOR
Blackbird Real Estate GmbH

Armin Völlnagel, SIOR is an authorized representative of Blackbird Real Estate GmbH based in Königstein near Frankfurt/Main. Armin is an office specialist focusing on international investment and tenant representation.

Tobias Schultheiß, SIOR
Tobias Schultheiß, SIOR
Blackbird Real Estate GmbH

Tobias Schultheiß, SIOR is founder and owner of Blackbird Real Estate GmbH based in Königstein near Frankfurt/Main. Tobias is an office specialist focusing on international investment and tenant representation.