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Property Types

The wonderful Architectural Heritage of Berlin is evident from the Gründerzeit buildings of the late 19th century through to the functionality of New Objectivity in the 1920s, the totalitarian architectural style of the mid-war years to the architecture of the post-war era where the nature of both political systems is reflected in the development of the east and west of the divided city. Despite the difficult times that the city of Berlin has gone through over the last 100 years there still remains a great range of Historical Architectural gems in the city.

Current Property Profile of Berlin

There are almost 1.9 million housing units at present in Berlin. Approximately 10% of the population of Berlin live in single or two-family buildings with the remainder living in Multi-family apartment buildings.

More than 25% (approx 510,000) of the properties in the city are over 85 years old, this is high when compared with other German cities. The older properties mostly consist of period villas and single family houses outside the city centre, Altbau multi-family houses and tenement blocks.

Mid war properties, including the modernist schemes from 1924 to 1931 which were built using a social rather than a speculative model, account for over 15% (approximately 280,000) of the current properties in the city.

?Plattenbau? (pre-fabricated concrete) apartments, which were built in the east of the city during the partition of Berlin, account for over 15% (300,000) of existing properties. Most of these were built in the later years of socialist rule. There are another 600,000 residential properties in Berlin dating from the period of partition, most of these properties were built in the boroughs of old West Berlin and were in high density developments due to the limited space available in the land-locked area.

Since re-unification more than 160,000 new residential units have built in the city, most of which date from the early years after re-unification. Current building in the city has nearly stopped with approximately 4000 units (3000 single or two-family houses, 1000 in multi-family apartments) being built annually. At current rates it would take over 400 years to re-build the city!

Owner Occupancy Rates

With an average home ownership rate of around 13% Berlin has the lowest rate of any state in Germany and less than a third of the German average of 43%. As one of three City-States (with Bremen and Hamburg) the high concentration of residents should be seen as a bias on the statistics however owner-occupancy rates are still the lowest in Germany when compared with other cities in Germany. For example Bremen has an owner occupancy rate of 37% while in Frankfurt it is 16%.

Owner occupancy rates in Berlin?s boroughs vary from approximately 4% in Mitte and Friedrichshain-Kreuzberg (both relatively built up inner city areas) to nearly 24% in Steglitz-Zehlendorf and Reinickendorf (both of which have large semi-rural areas). With approximately 3 million people in rented accommodation in Berlin it is one of the largest rental markets in Europe.

The distinctive property types of Berlin include the Altbau, Tenement, Plattenbau and post re-unification new build.

The Altbau

Altbau (literally old construction) usually refers to pre-1940 properties built using traditional building techniques (masonary walls, timber beams, pitched roofs, wooden windows, large balconies etc). The Berlin Mietspiegel http://www.stadtentwicklung.berlin.de/wohnen/mietspiegel/ which is an information resource (in German only) for property rental rates in Berlin designates Altbau for some properties built as late as 1948. However, normally in Berlin the tag ?Altbau? will usually refer to a multi-family house dating from 1880 to 1920.

One of the defining characteristics of the Altbau are the very high ceilings, typically over 3.0 m high, usually with many detailed architectural features. The level of architectural detail is usually dependent on the social/economic class of the residents it was intended for and are located in the traditionally well established residential areas. The larger proportions of these properties mean that individual apartments tend to be much bigger than that found in old tenement buildings (and most modern buildings). Apartment sizes of 150 to 200 m2 are common in the prime Altbau buildings and while rental rates per square meter may not be much more than the area average due to the large apartment sizes families tend to pay much more to live in this type of property.

The structure of an Altbau typically consists of the ?Vorderhaus? (Front Building) that sits on the street that the building takes its address from. In areas with a more mixed commercial/residential character the ground floor of the front building will have one or two commercial units which can operate easily without interfering with the residential element of the building.

A communal entrance (large impressive single or double front door) in the main building leads to an inner hallway, this area may be semi-outdoor in nature (ceramic tiles, concrete floors etc) and in some cases where its large enough will be used for the storage of bicycles etc. This area leads to the stairs to the upper floors of the main (road fronting) house which generally includes the grander residences of the building.

Properties in the front building of the grander Altbau will usually have a balcony or balconies and usually vary in size from 90 m2 up to as much as 250m2 in the grandest buildings.

The inner hallway will lead to the communal rear courtyard and any rear buildings within the house. The rear properties are usually a side wing (Seitenflugel) or a side and rear wing (Hinter Haus). Each of these wings will have its own stairway and these tend to be more basic than the stairs of the front building. The properties in the house away from the front road tend to be much smaller with an absence of any dramatic architectural elements. Dwellings in the rear buildings usually vary from 50m2 to 90m2.

The Altbau will typically cover a residential/commercial area of somewhere between 700 m2 and 3,000 m2. The commercial element will usually be limited to the ground floor and possibly a basement area.

Individual storage ?cellar? areas tied to specific residential units are usually provided in the lower ground floor area, a properly maintained cellar area is usually referred to as a ?dry cellar? where the basement area has been properly floored, have good damp proofing, lighting and ventilation.

Each allocated storage cellar will be defined in the title of the appropriate apartment/commercial unit. The store would ideally be a lockable space although generally with latte style partitions for good ventilation but which have limited security capabilities.

Maintenance of an Altbau is a key element in determining its desirability and true value. Properties in the West of Berlin (mostly in the traditional middle/upper class areas of Charlottenburg and Wilmersdorf) which remained under the ownership of more affluent residents who could afford and wished to maintain their properties in tip top condition.

This has left a legacy of top grade properties that continue to attract the best prices, these properties should prove to be the most solid investments as they mostly have avoided developing major structural problems. In general the high desirability, generally low maintenance costs and good local environment keep prices high in relationship to rents and thus can have significantly lower net yields, 2% to 3% yields are quite common for the best Altbau properties.

On the other hand the tendency in East Berlin was more ?bulldoze? then maintain and thus without the necessary ongoing maintenance that these older buildings required many deteriorated rapidly and were knocked down. Repairs, where they were carried out, were generally of a poorer quality in the east of the city and this is still evident in some of the properties.

Since re-unification there has been a major campaign to upgrade and restore much of the remaining older properties in the City which has resulted in the belated recovery of many ?Altbau? and the replacement of many in key residential areas where Gap sites were filled in a style that matched the surrounding older buildings.

There are still some Altbau buildings in the East and West of the city that have not had the benefit of the full restoration that they desire and should be avoided as ownership, combined in many cases with there preserved monument status, can lead to unbelievably high ongoing costs.

As with all multi-family buildings minority ownership can leave an owner at the mercy of a dominant shareholder who may not have the same interests or objectives of a single owner. Be aware of becoming one of the first buyers of an apartment in a multi-family building which is being broken down for smaller investors, quick early sales can dry up and result in a change of strategy by owners leaving early buyers in a very unwelcome position.

Tenement Buildings

Tenement buildings, these typically date from 1880 to 1920. The tenement building was the residential construction model of choice for speculators who rushed to capitalise on the housing demands for the rapidly growing working class. The population boom in Berlin followed the rapid growth of Berlin as an industrial centre during the second half of the 19th century and the early years of the 20th century. The era of the tenement ended when housing provision changed from speculative to socially driven following the Weimar Constitutional reforms of 1919 this incorporated house construction as a public function and guaranteed "a healthy home for every German".

The tenement developments differed from the Traditional Altbau in the basic functionality of the properties; there were no frills in the tenement. Many tenements were built without proper bathroom facilities or heating systems.

The buildings had much smaller proportions than the Non Speculative developments of the period and with a much greater residential density. In the most intensive developments, as seen in parts of Kreuzberg and Wedding, residential density levels of over 60,000 residents/km² were common and remained the case well into the 20th century.

Even now there still remains a considerable residue of tenement buildings from their peak periods, this is typified by the small size of many of the residential units in the districts.

The structure of the tenement buildings were based on a complete ?Block? structure with completely contained inner courtyards which varied in the proportion of the internal space that was built upon. In the most intensive structures the ?Closed Courtyard? format the inner courtyards were no more than a minimal ventilation area and reduced almost to air-shaft size proportions and typically only of use as a waste-bin placement area. The less intensive ?General Courtyard? developments internal areas were less enclosed often only separated by walls or fences from neighbouring courtyards making them somewhat sunnier and more open than is the case for the "Closed Courtyard? type. The ?Closed? and ?General? courtyard tenement developments were built within the inner city areas inside the Urban Rail Ring. Outside the rail ring tenement developments took on a much less intensive structure within a ?Decorative? and ?Garden? Courtyard classification.

Tenement developments typically varied from as little as 900 m2 on simple Front building only properties to over 3000 m2 developments that included Front, Side and Rear elements. Dwelling sizes typically varied from over 130m2 down to the smallest of about 25 m2 (these will pre-date the Hartz 4 agreement that produced guidelines for size and prices of dwelling houses) in the higher density developments prominent in Wedding, Neukölln, Kreuzberg and other working class areas.

NOTE: While small family flats of 55m2 would appear to be out of sync with modern requirements and tempt development of these with a minimalist studio style in the areas mentioned above local demand is still there for these small family units and the alteration of these dwellings into open plan modern conversions may not fit with local demand.

The common entrance to the tenement tends to be purely functional with little effort made to try and portray it as anything other than the way to get in and out. The stairwells of the tenement tend to be consistent across the front, side and rear wings with no particular focus on the front building as in the Altbau. Tenements were usually for or five floors in height, typically the maximum acceptable without installation of expensive lifts. In recent years tenements in some of the more desirable areas which required re-roofing have incorporated a loft conversion as part of the renovations, these bright, attractive units have the disadvantage of a long climb up.

Commercial units tend to make up most of the ground floor of the front building in any inner-city tenement, usually one on either side of the common entrance.

Corner buildings usually allow for a larger commercial space as there tends to be two common entrances away from the corner leaving a larger, more prominent and better functioning commercial space. In the largest corner buildings there may be a very small commercial space on the other side of the common entrances.

In recent years the commercial units outside the busy social/commercial areas have proved to be difficult to let and in many cases remain empty for many years.

When comparing the financial performance of a tenement investment the occupancy rates for the commercial premises are critical. Decent overall yields for a building are not possible where the commercial space is not functioning. In many cases on quilter side streets these commercial spaces have been converted to residential use and as there is minimal difference in rental rates for commercial and residential in these locations this can be an attractive option. Obviously this strategy is inappropriate in locations with good demand for road-front commercial space and commercial rates are much higher than would be achieved in residential use. Generally the limit for change of use in these cases is dependent on gaining approval from ?all owners? within the building for this change, a single objection form an owner would block this change of use, and this is not usually a problem when buildings are in single ownership.

The Plattenbau

Plattenbauten, used now as a general term to describe Pre-Fabricated Concrete Panel based construction style for mostly uniform large scale residential developments and identified most with the GDR and East Berlin. These developments aimed to build on the economies of ?Off-Site? mass production to lower overall costs and produce quickly, and with a better quality to price relationship than traditional ?On-Site? developments. In truth just a modern re-work of the tenement building.

Early examples of similar construction dating from early in the 20th century occurred in the US, the UK and France where a minimalist style with Concrete, Steal and Glass dominated. The earliest development of a Plattenbau structure in Berlin is the Splanemann settlement dating from 1926 to 1930 in the district of Friedrichsfelde in Lichtenberg. This development consisted of a small 2 and 3 storey apartment building development of 138 residences using locally cast concrete slabs.

This small development pioneered the construction technique in Germany and following the destruction of much of the German housing during the second world was and a need for quick and efficient building techniques. This was most evident in the former GDR where it became the standard building style for the mass population. Generally providing all modern conveniences, running water, heating etc they were seen as a desirable place to live.

Plattenbau construction totalled nearly 3,000,000 apartments in East Germany (GDR) with approximately 300,000 built in Berlin. Neglect of older properties in East Berlin and other GDR inner city areas meant that much of its older stock of buildings were eventually replaced by Plattenbau Developments.

While most developments were based on a standardised low specification format with uniform facades there were some notable examples where special attention was paid based on there historic location or specific design remits, this included the developments at Friedrichstrasse and the ?Gendarmenmarkt?. At Nikolaiviertel in Berlin Mitte a pastiche of an old city character was constructed with unusual small format variations, pointed gables and architectural ornamentation.

Large Plattenbauten developments were not confined to East Germany, there were developments in the former West Germany (FDR) during this period with the best known Berlin developments at Hansaviertel (6.000 residents), Märkisches Viertel (36.000 residents)and Gropiusstadt (34.000 residents).

There are currently nearly 300,000 Plattenbau homes in Berlin; most of these properties have undergone major renovation and repairs in recent years. The developments have generally remained under the ownership of larger property holding institutions.

With their low ceilings and minimal architectural merit ?Plattenbau? homes rent cheaply and are in the budget end of the accommodation range.

The borough of Marzahn-Hellersdorf in the east of the city has the largest proportion of ?Plattenbau? buildings in Berlin and while there has been a major renovation of many of these properties there has also been a major demolition programme targeting the poorest, least desirable, properties.

At the latest count over 3000 ?Plattenbau? dwellings had been demolished in the borough yet it still has the highest vacancy rates in the city at over 10%.

Modern Developments in Berlin

While there has been a lot of ?flagship? stunning new residential developments in key locations, the Sony Centre in Potsdamer Platz for example, these may grab the attention but do not reflect on the mainstream residential developments. Property within these premium developments sell for somewhere in the region of 4000 and 5000 euro/m2. Tier 2 developments within the most desired new residential areas outside ?Prime- Mitte? like Prenzlauer Berg typically sell for 3000 to 3500 euro/m2. These rates are not viable for the mainstream rental market or most owner occupiers so most residential interest is outside these select developments. Mainstream developments in Berlin range from single and two-family houses in suburban areas, desirable waterfront apartments in the west of the city and high rise multi-family buildings.

The suburban developments mostly consist of characterless single or two-family modern housing schemes built on a speculative basis and which could be almost anywhere with the absence of any specific ?Berlin Style?, these have mostly been developed in areas on the peripheries of the boroughs. Earlier strong growth projections for this type of development have not materialised and many remain only partially developed even after many years of building.

Modern apartment building which have been built mostly within the old East Berlin boroughs, areas with most new developments include Pankow, Treptow-Köpenick and Marzahn-Hellersdorf.

Waterfront apartments buildings which have a particularly good environment.

The Apartment Block Havelspitze, in Spandau dating from 2000, the Pulvermühle Quarter in Haselhorst from 1997 and Hultheiss Quarter in the old town centre of Spandau in1998.

The comparatively low cost of property in Berlin and the vacancy rate, which remains high while slowly reducing, continues to serve as a barrier to any major new residential development in the city. Slow renovation of existing properties on a building by building basis characterises the current residential development trend. With prices for vacant older buildings being maintained at a level that makes renovation.

Problems with Older Properties

With the high vacancy rate in Berlin that has characterised the market since 1996 many apartments in the least desirable areas / properties have remained empty for long periods. An absence of investment within high vacancy buildings as a result has contributed to structural decay and eventual demolition of the worst properties in peripheral areas. Since re-unification the widespread demolition of tenements in East Berlin inner city areas was mostly stopped with new investment available for restoration and renovation.

Residents of inner city dwellings who rent property at very low rates close to the city centre will use the strong tenant rights to stay where they are. As the gap rises between current market rates and that paid by existing sitting tenants the turnover of these tenants could completely stop. Tenants who value the convenience of cheap, even if of poor quality, inner city accommodation will not move to suburban areas where better quality cheap accommodation is still available. Poorer quality properties which have a dominant profile of tenants paying very low rents will find it difficult to take advantage of the strong growth in prices within area.

The condition of properties with long term sitting tenants on cheap rents tends to be poor and in need of major renovation, many of these properties have coal/wood fire heating and without modern bathrooms and kitchens.

While some renovation costs can be passed on to tenants as increased rents the increases generally do not in any way compensate for the investment made. Also, what many of these properties really need is for them to be vacated and completely renovated and upgraded before they are lost.

Where owners of buildings have managed to get out of the Low/Social Rent Trap it should be possible to take advantage of the increased rental rates in the area with corresponding increases in property values. Rent levels within a local area can vary dramatically from building to building as a result.

Areas with a higher proportion of poor quality older buildings include, Wedding, Gesundbrunnen and Neukölln. While all of these areas have some social issues they are most notable in parts of Neukölln.

Quick guide to typical heating systems.

These can be divided into four different classes.
Single-property Central Heating System where there are no individual heating systems with being provided from a single boiler within the basement of the building which provides heating to all parts of the building through an integrated central heating system. Payment is aggregated through the building to individual residents based on recorded systems fitted to individual radiators. Periodically an absolute calculation is performed to update on absolute use by each resident with adjustments then made in individual charges applied.

Multi-property, District Based, multi property Central Heating System. During partition there was a practice of large scale industrial heating plants providing heating to complete districts this practice is being slowly replaced with single property heating systems. Costs are allocated based on aggregate demand form each building in the scheme.

Single dwelling Individual boiler system, in this case individual owners have responsibility for maintenance and repairs with direct heating costs borne by residents based on their own usage.

Old style stand alone solid fuel room heaters, these are usually confined to older lower quality tenement buildings with long term sitting tenents and while limited in their capabilities can be still popular with many tenants.