Bima plans construction of up to 8,000 housing units on own land

Germany's Bima, or Bundesanstalt für Immobilienaufgaben (Institute for Federal Real Estate), the federal government's own housing and land manager, is pressing ahead with its plans, announced in 2019, to build between 6,000 and 8,000 apartments on its own sites, primarily with a view to creating additional affordable housing for federal employees.

Bima said it had a budget of about €1.2bn to complete 4,500 units by 2025, although 2021 is expected to see less than 100 units completed. Cities where most building is planned are in the south, such as Karlsruhe, Bad Tölz, Heidelberg, Freiburg and greater Munich. Berlin is expected to see about 1,000 new units built. 

All in all, 110 projects in 50 different municipalities are on the plans, with 41 projects close to the approval stage, said Bima. A second phase, to 2028, is also planned, with about 3,500 further units, including in cities like Cologne and Hamburg. Bima currently owns 36,000 apartment units across Germany.

The quality of the units planned is described as "in keeping with economic efficiency and the requirement to enable long-term rentability at affordable prices" - in other words, fairly modest. Bima will hold them in its own portfolio and rent them out at a maxim of €10.00 per sqm, or at "the lower limit of the rent value shown in the relevant rent index (Mietspiegel)".

Bima, given its government mandate, is also an active seller of residential assets from its portfolio. It said recently that it had sold about 1,800 properties since the 2015 introduction of new guidelines on sales at preferential rates. These have involved a series of rolling sales to buyers, mainly municipalities, for their own stock of affordable housing. Bima said about 344 of the properties were sold at a total discount to market value of €184.5m, of which €120m was earmarked for social housing. About 240 further sites are currently under negotiation with different municipalities.

The Green party, likely to be a dominant player after September's federal elections in Germany, has made clear its plans for the Bima, which is to turn it into a not-for-profit land fund, which would be used for strategic acquisitions of land and property for public use. The plots would be leased out, rather than selling the freehold, to ensure the longevity of the social housing built upon them, and to give local communities right of first refusal on any future sale.

Last year Bima generated €4.3bn on rental income from its properties, including those leased out to military installations and police stations, which would have made up the bulk of the rent. Residential accomodation brought in €212.7m, while other commercial property generated €38.1m.

The largest single Bima tenant is the Bundeswehr, or German Army, who paid €2.6bn last year. Germany's secret service, the Bundesnachrichtendienst, paid €101.6m for its headquarters on the Chausseestrasse in Berlin.

Bima itself as a tenant paid rent last year of €313.7m to various landlords, including €7.6m to a company called Tulpenfeld in the old government district in Bonn, and €6m to a Wealthcap Spezialfonds. For various occupancy rights on residential accomodation, it paid €14.6m.