REFIRE/BlueRock/Envato
BlueRock Group is a Zürich-headquartered real estate investment boutique. After an initial period of focusing on Swiss commercial real estate, the company has now largely developed into a specialist on German, and in particular Berlin, residential real estate. The German capital has been the company’s focus for the last ten years. By the end of 2023, BlueRock had a total of more than €600m of assets under management.
REFIRE recently sat down to talk with the company’s co-founder and managing partner Ronny Pifko to find out more about why the company is so enamoured of the Berlin market.
REFIRE: BlueRock AG has become synonymous with residential property investment in Berlin. Can you share how this focus on Berlin began?
Ronny Pifko: We started in Switzerland with modest beginnings, initially investing in office properties in Germany. My frequent visits to Berlin since 2013 gave me a deep appreciation for the city’s unique character and potential. Walking down Kantstraße, you see ultra-modern office towers juxtaposed with neglected ruins. It was clear there was untapped opportunity here.
By 2015, we recognized that local expertise was essential for success in Berlin’s market. That year, we partnered with NAS and set up a fund to acquire three apartment buildings, marking the beginning of our residential focus. The road wasn’t always smooth, and we eventually decided in 2017 to manage things independently, forming our own team. This allowed us to capitalize on opportunities like Berlin’s rent freeze period, when others hesitated, and build a significant portfolio. Today, we’re recognized as Berlin specialists, a reputation we’ve worked hard to achieve.
REFIRE: Why the exclusive focus on Berlin, and what sets the city apart from other German markets?
Ronny Pifko: Berlin offers an unmatched combination of potential and security. Unlike other German cities, Berlin’s history of underutilization and its relatively affordable property prices create room for value appreciation. From attic conversions to densification projects, there are opportunities here that simply don’t exist elsewhere.
Operationally, we know that staying close to our properties is critical. We want to deliver hands-on service, ensuring quality and accountability. Economically, Berlin’s appeal lies in its position as a global city with rental and sales prices that are still far below European capitals like London or Zurich. This undervaluation is a major driver of our long-term strategy.
REFIRE: You’ve worked with a wide range of investors, including private and institutional players. What draws them to Berlin, and how does BlueRock tailor its approach to meet their expectations?
Ronny Pifko: Our investors come from across the globe—Europe, Israel, and Anglo-Saxon markets, particularly London. Institutional investors often seek higher returns in value-add strategies, with targets north of 12%. This aligns with our focus on long-term value appreciation through careful acquisitions and thoughtful renovations.
For private investors, Berlin’s stability and potential make it especially appealing. Many see Berlin as a rare opportunity to achieve solid returns while investing in a city that still has so much room to grow. We ensure that all our investors understand our approach: we prioritize quality, sustainability, and a socially responsible strategy, which creates long-term value for everyone involved.
REFIRE: How do sustainability and ESG compliance fit into your strategy?
Ronny Pifko: ESG has become a critical component of real estate investment, especially for institutional investors. In every building we acquire, we assess the potential for sustainability upgrades. This starts with basics like eliminating gas heating in favor of district heating and improving insulation during attic conversions or roof renovations.
We’re pragmatic about ESG compliance—it has to add value for all stakeholders. For example, improving a building’s energy efficiency often reduces ancillary costs, benefiting tenants directly. We also consider the future exit value, knowing that ESG regulations will only become stricter. Even with Germany’s high ESG standards, we see this as an investment in long-term resilience.
REFIRE: You’ve previously compared Berlin to other cities like Copenhagen. What lessons can Berlin learn from elsewhere?
Ronny Pifko: Efficiency and flexibility in urban planning are areas where Berlin lags. Take Copenhagen, for example. In just three years, they completed housing developments on previously unused islands, addressing a housing shortage while stabilizing rents. In Berlin, discussions about projects like Tempelhofer Feld or Tegel drag on for decades without real progress. Bureaucratic inefficiency is a significant bottleneck here.
That said, Berlin’s slower pace creates opportunities for investors who are willing to be patient. When regulations eventually ease or political sentiment shifts, those who stayed the course will reap the rewards.
REFIRE: What are the challenges of acquiring properties in Berlin, and how does BlueRock stand out in a competitive market?
Ronny Pifko: Competition has increased recently, especially as investor confidence returns. We’ve been actively buying even during uncertain times, which gives us an edge. Unlike those targeting large portfolios, we focus on individual apartment buildings with very specific criteria. This precision ensures we’re acquiring assets that align perfectly with our long-term strategy.
Our biggest differentiator is our one-stop-shop model. We handle everything in-house—from property management to architecture and construction—which ensures alignment at every level. This allows us to act quickly and efficiently, even in a competitive market.
REFIRE: Berlin has seen its share of regulatory hurdles. How do these affect your strategy?
Ronny Pifko: Regulations are a fact of life in Berlin’s housing market. Measures like rent controls can deter some investors, but for us, they’re manageable challenges. Our focus on densification and upgrading existing buildings allows us to add value without displacing tenants, which aligns with Berlin’s regulatory environment.
Interestingly, some of the best investments happen in highly regulated markets. Regulations eventually stabilize, and those who stay invested benefit when the stigma fades. We’re confident that Berlin’s fundamentals will outlast its regulatory challenges.
REFIRE: You’ve mentioned Berlin’s affordability compared to other European capitals. How does this impact your long-term outlook?
Ronny Pifko: Berlin’s affordability is one of its greatest strengths. For example, newly renovated apartments in central Berlin rent for a fraction of what you’d pay in cities like Zurich or London. This makes Berlin attractive to a diverse tenant base, from students to international professionals.
At the same time, the city’s housing shortage ensures demand remains high. As long as this imbalance persists, Berlin will remain a resilient market. Even with rising interest rates, the potential for value appreciation in Berlin mitigates the impact, making it a unique opportunity for long-term investors.
REFIRE: Are there any projects you’re particularly proud of?
Ronny Pifko: One standout is our Stromstraße project. We revitalized a neglected property by adding a side wing, converting attics, and upgrading existing apartments. The result was not only additional housing but also a positive transformation of the surrounding area. This project exemplifies our approach: enhancing value for both investors and the community.