Primus Immobilien to invest further €300m in quality residential
While the average price of housing in Berlin compares well with other German cities, and certainly very well on an international comparison, there are plenty of pricey new apartment developments coming on stream across the city, ready for sale to owner-occupiers and investors all too keen to get a toehold in the German capital.
One of the leading residential developers at the higher end is Primus Immobilien AG, which focuses on residential projects in Berlin-Brandenburg and on Germany's Baltic Sea coast. Last year the Berlin-based private company bought land with a projected building volume of €230m, bringing the level of its current projects up to €790m. This year it expects to add a further €300m of project volume to its books, according to newly-arrived board member Sebastian Fischer, in a recent meeting with REFIRE.
"Despite the tough competition and the high level of demand for buildings and building land, we were able to defend our market-leading position. This year we intend to invest just as intensively in our prime market of Berlin," said Fischer. The company is particularly focusing on development in so-called B-locations such as Weissensee, Tempelhof, Lichtenberg and Spandau, all of which Fischer sees as up-and-coming. The key aspect in a city growing like Berlin, he says is that the projects are well-connected with the existing infrastructure. Tempelhof is only 10 minutes away from Friedrichstrasse in the centre by U-Bahn, although deemed a B-location.
When pressed on what Primus Immobilien's strength is in a highly competitive market, Fischer points to the company's 25-year history (founded in 1993), and what he calls "a creative approach to buying", helped by a healthy war-chest of equity capital. The company, with 65 employees, also has a strong network of relationships with smaller private banks, so financing rarely presents problems, he says.
When buying existing properties for conversion, says Fischer, "Given our track record, we can certainly be aggressive at the buying level, but we're looking to put our own stamp on the property, creating individual apartments for our discerning clientele. At prices of €4,500 per sqm upwards, Primus is "delivering not just an apartment, but a dream", says Fischer – although at €3,000 per sqm minimum building costs in Berlin these days, the €4,500 level is being easily reached by lots of players.
A study of Primus projects shows a strong preference for classical Berlin houses incorporating front building, yard (Hinterhof), back and side building, maybe some commercial units on the ground floor, all conveying the sense of social diversity within the one housing complex. It's clear that Fischer is enthused by the architectural as well as the commercial challenge of creating living spaces that aspire to the same social and residential mix aspired to by the architects of the Gründerzeit (or "founders' years") after 1871, with many city buildings designed around a central yard. New designs can build upon these concepts, says Fischer, while eliminating the older problems of darkness and overcrowding.
At the upper end of the market, Fischer says, Primus's buyers are mainly German, although quite a few are foreigners keen to have a presence in the city. The company will selectively invest in properties to rent out to tenants, but the basic model favours direct sales to end-users.