Escaping mass unemployment at home in the Seventies and Eighties, the Irish came to pull pints and serve the punters of West Berlin’s bars and nightclubs. In the Nineties, they flocked to the building sites to help reconstruct a reunified city after the Wall came down.
Now, in the 21st century, they have come back. This time they are taking over Berlin. At the far western end of the Kurfurstendamm — Berlin’s well-heeled shopping district — lies the headquarters of the new Irish property invasion.
In the past eight months alone, a group of Co Mayo investors has bought more than â,¬40-million-worth of flats and apartments. At present the group is negotiating a deal for a vast complex of apartments estimated to be worth â,¬35-million.
Spearheading the big Irish buy-up of Berlin is Mike Morris from the Mayo-based Premier Estates Maloney.
”We started looking at Germany, and in particular Berlin, because it is a stable, conservative and trustworthy society,” he says. ”The company had thought about expanding our property portfolio into eastern Europe, but those countries are potentially unstable, which Germany is not,” he adds as he surveys three apartment blocks that the company owns close to one of the main motorways looping around western Berlin.
”The â,¬35-million deal we are trying to secure now would land us with 900 apartments, 30% of which need renovation. What we are offering in all our properties is a net return per annum of 7% from rental incomes,” he says.
Taking a brief stroll later across the Kurfurstendamm with Morris into the affluent Halensee district reveals the depth of the Irish investment invasion.
As he passes by a row of businesses below ornate 19th-century Wilhelmine apartments along the Westfaelische Strasse, with shops ranging from health-food centres to lingerie stores, Morris points and says: ”That’s Irish-owned, that’s Irish-owned and that’s Irish-owned. In fact, most of the buildings on this side of the street have Irish landowners.”
Premier Estates Maloney and the other Irish companies following in their wake have not kept their investments solely to western Berlin. Their portfolio includes apartment blocks in the eastern and increasingly fashionable Prenzlauer Berg district. These include six retail units and 15 offices, with a branch of McDonald’s as the main tenant.
The expansion eastwards of the Irish investor follows a trend across Europe with entrepreneurs who made fortunes from the growth of the Celtic tiger economy buying up airports and shopping malls in England; thousands of apartments on the Spanish Costas and Florida; and hotels and ski chalets in the Balkans.
The Irish are estimated to be in the top three foreign investor nations in Berlin. However, in a city of 3,4-million, where only half of its citizens are working, German observers of the Berlin property market are extremely cautious.
Ralf Schoenball, a property expert for the Berlin-based daily Der Tagesspiegel, warns that Berlin may not be the best place for Irish investors to buy flats and apartments. ”Don’t get me wrong here. I have been here since 1983 and I love Berlin. But the economy of this city has shrunk every year since 1996 with one exception: [growth of] 1% in 2000.
”Because of the shrinking economy there are fewer Berliners working and the incomes of the households are decreasing if you take into account the cost of living. For the housing market this means that, as people have less money, an increase in rents makes it harder for them to pay. There are also 100 000 empty flats in Berlin, so tenants can move around and find the cheapest places to rent.”
Morris brushes aside the cautious noises of German observers and says: ”The prospects for Berlin look good in the long run. Many of the Germans in business here are too conservative.
”There are good deals to be had here in Berlin and the long-term returns will be worth it. We might take a look at Dresden too.” — Guardian Unlimited Â