Mietendeckel HAS led to lower supply, pain mainly on small landlords

The Berlin rent cap (Mietendeckel) has indeed reduced the supply of housing in the capital, while putting a disproportionate strain on small landlords in particular, concludes a study by the Institut der deutschen Wirtschaft (IW Köln) in Cologne.

The analysis is based on a survey of 283 private owners of houses and rental apartments in the city. According to the survey, the regulation, since overturned by Germany’s Federal Constitutional Court in Karlsruhe, lowered rents by on average 10%.

For more than half of the landlords surveyed, the cap meant sometimes considerable losses as the Red-Red-Green Senate had set particularly low flat rates per square metre for apartments that were more than 100 years old.

15% of respondents had to struggle heavily to service the debt on their properties, while 4% said they were no longer able to keep up with their monthly loan instalments. 45% of the owners said they were already postponing smaller investments, while for bigger improvement and maintenance measures, it was nearly 60%.

Housing supply on the Berlin housing market shrank significantly during the period when the Mietendeckel was in effect. As the analysis shows, the number of rental flat advertisements on housing portals decreased by almost 52%, although some landlords are thought to have switched to other channels to market their accommodation.

The study’s author, Dr. Michael Voigtländer, said the beneficiaries of the temporary experiment were precisely those who were supposed to be hit hardest by the rent cap i.e. large real estate companies. While smaller landlords could not service the loans and had to sell their properties below value, the corporations had plenty of liquidity to weather the financing gap. In view of the strong demand, they could have "speculated on considerable increases in the value of their properties".

Montano sets ambitious goals and plans own investment products

Munich-based investment service provider Montano Asset Management is revamping itself, changing its name to Montano Real Estate, and embarking on a new expansion including offering its own investment products.

As the two Montano founders and managing partners Ramin Rabeian and Sebastian Schöberl put it, the goal is to increase the company's assets under management to €6-8 billion by 2025, from today's €1.6bn. 

In the first half of 2021, Montano transacted a volume of about €800 million, which it says keeps it on track for its ambitious target. 

Real Estate private equity group TTL AG now holds a 50% stake in Montano, up from 30% at the end of 2020, which should provide additional firepower, and help it to take on more risk, which it will be doing by offering its own products to its institutional partners. TTL AG also owns a minority stake in listed DIC Asset AG.

Co-founder Rabeian said: "We look forward to acquiring attractive core properties ourselves in the future and incorporating them into our own investment products. As an independent local anchor for our international clients, we have been developing top properties in the German commercial real estate market for almost ten years. Now it's time to take it to the next level." 

The plan is to buy "attractive core-properties" and bundle them into their own investment products. Traditionally, since its founding in 2013, Montano has focused on German core-plus and value-add real estate exclusively for foreign investors who lack a platform in Germany. 

It currently manages about 70 properties valued at €1.6bn across the country for a range of institutional clients, family offices and sovereign wealth funds. The assets total about 536,000 sqm, made up of 80% office and 20% retail space.