Property along Berlin's former 'death strip' lures wealthy buyers

Thu Jul 31, 2014 7:51pm EDT
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By Anja Nilsson

BERLIN (Reuters) - When luxury living quarter The Garden opens next year only a metal strip across the courtyard retracing the Berlin Wall will remind its affluent inhabitants that 25 years ago this was the "death strip" on no man's land separating east and west.

Instead of barbed wire and sentries, residents will be greeted by a 24/7 doorman and concierge service - and perhaps eventually, a growing, city-wide pushback against gentrification.

On the anniversary of the fall of the Wall in 1989, Berlin is belatedly attracting the kind of wealth normally associated with the capital of a major economic power.

A fluke of history means the city has a supply of vacant lots in coveted central locations along the Wall built by East Germany's communists to keep capitalism at bay, though some developers are wary of being too brazenly commercial about this.

"Clients, international and German alike, value living on historical ground," said Michael Ries of the property developer Pantera which is behind The Garden project and is the German partner to Sotheby's International Realty.

That same history has led to a less-than-linear growth path for Berlin's property market in the last quarter-century.

"For the longest time, it was just not worth buying here. This changed once Germany and Berlin emerged as a safe business location and investment destination in the wake of the economic and financial crisis," said Nikolaus Ziegert, whose consultancy has a 17.5 percent slice of the luxury market.

Economy Minister Wolfgang Schaeuble has warned of the danger of a German property price bubble and the central bank has said apartments in some urban locations are over-valued by up to 25 percent, but the financial watchdog sees no evidence of this and Berlin itself seems to be years away from any such risk.   Continued...

George Darbishire of Ziegert Property stands in a floor of the Metropolis Park development that will be turned into a loft in Berlin June 26, 2014. REUTERS/Thomas Peter