September 2021

Research Residential market in Germany Rental growth is weakening, especially in the top rental price segment, while purchase prices continue to climb Residential market

In 2020, the number of people leaving the city exceeded the number of new arrivals for the first time since 2002

In 2020, a total of 142,923 people moved to the federal a dwindling housing supply and strengthening housing capital, while 144,881 people moved out. The resulting demand. In the past, population growth in Berlin has also net migration of -1,958 people is the first time Berlin has been strongly driven by international inward migration. registered negative net migration since 2000 and is largely However, this was severely limited in 2020 by the mobility responsible for the fact that in 2020 there was also a slight restrictions associated with the COVID-19 pandemic. In population loss overall (down 5,400 to 3.664 million). After addition, the introduction of the rental cap, which has many decades of strong population growth, the subdued since been declared unconstitutional, encouraged many development of the past years continued in 2020. The people to hold onto existing residential units. The resulting number of households moving away has been rising lower fluctuation further inhibited the dynamics of inward steadily in recent years due to increasing housing costs, migration. The causes can therefore largely be interpreted as crisis-related and short-term effects, and it can be Housing supply and demand for new buildings assumed that additional demand for new housing will

30 1,000 residential units remain high in the future. Demand for around 57 new dwellings per 10,000 inhabitants is expected in the coming 25 years (equating to around 20,700 new dwellings annually). 20 In 2020, the completion level of 40 new dwellings per 15 10,000 inhabitants (+14,500 new dwellings) was not only 10 significantly below this figure, but also below the previous year‘s level. A new record level of around +19,000 new 5 dwellings was registered in 2019 and although the number 0 of building permits granted in 2020 also declined for the fourth successive year to 20,500 dwellings, the 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Residential permissions total construction surplus has recently increased again. Residential completions total This would indicate that completions are also likely City of Berlin‘s target for residential completions to be higher again in 2021. JLL Needs Analysis*

* Additional annual need for housing units (includes also apartments in detached houses) without consideration of current construction deficits. Source: destatis, JLL (Status: July 2021)

Selected developments under constructions

Name Location Residential units Completion date div. Projekte Wasserstadt approx. > 4,000 ab 2025 Quartier Gut Hellersdorf approx. 1,250 2023 Mein Falkenberg approx. 1,250 2025 Quartier Friedenauer Höhe approx. 1,150 2024 Maximilians Quartier approx. 973 2022

Source: Thomas Daily, JLL (Status: July 2021)

Cover page 2 Contacts Rental market Berlin

Effects of the rental cap still noticeable, top rental price and new-build segments remain extremely dynamic

In the first half of 2021, median asking rents in Berlin of Rental price bands for listed apartments Berlin €14.00/sqm/month were unchanged from the same period last year. An interim decline in the median asking rent to Asking rent in €/sqm/month €13.30/sqm/month in the second half of 2020 was partially 29 26.70 Upper 10 % due to the rental cap which remained in force until April 23.70 2021 and is still having an impact on the current survey. 24 Upper 25 % The increase in the median rent was 9.1% per annum over Median a five-year period. In the top rental price segment (the 19 Lower 25 % most expensive 10% of the rental properties on offer), significantly greater momentum was recently observed 14 Lower 10 % with a growth rate of 15.0%, which caused the rental level 12.50 to rise to its current level of €23.70/sqm/month. The new- 9 build segment also showed a substantial increase in 8.35 momentum with +11.7% (€18.60/sqm/month) in the past 4 half year. The increase in the most affordable rental price Berlin Berlin total new built segment (lowest 10% of rental properties on offer) was significantly weaker than in the top rental price and new- Source: JLL, VALUE Marktdaten (Status: July 2021) build segments at 3.7%. The highest median asking rent is still observed in the district at €18.25/sqm/month, while the cheapest is in the -Hellersdorf district at €10.25/sqm/month.

Distribution of rental listings by price group Development of rental prices

Price group in €/sqm/month 25 Asking rent in €/sqm/month > 31 ≤ 31 ≤ 29 20 ≤ 27 ≤ 25 ≤ 23 15 ≤ 21 ≤ 19 ≤ 17 10 ≤ 15 ≤ 13 ≤ 11 ≤ 9 5 ≤ 7 ≤ 5 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 H1 2021 H2 2020 -400 -200 0 200 400 600 800 1,000 Median rent Prime rent (90% percentile of all rental listings) Half-year difference in the number of listings H1 2021 Median rent (existing properties)

Source: JLL, VALUE Marktdaten (Status: July 2021) Source: JLL. VALUE Marktdaten, IDN immodaten (Status: July 2021)

CoverStartseite page 3 KontakteContacts Asking rental prices Berlin

Velten Bernau Hohen Neuendorf

Zepernick

Hennigsdorf A 114 A 10 B 109

Pankow B 96a

B 2

B 158

Falkensee A 105

A 111 Spandau Ring (Berlin) Mitte Neuenhagen Petershagen Marzahn- B 5 Hellersdorf Fredersdorf-Vogelsdorf - B 2/5 B 1/5 B 1/2/5 - B 179 Rüdersdorf

Schöneiche A 100

A 104 A 103 - Schöneberg A 102

A 115 B 96 Neukölln - Erkner - Köpenick B 101

A 113

B 1 Kleinmachnow Teltow Flughafen Berlin-Schönefeld

0 5 10 km Ludwigsfelde OpenStreetMap-contributors

Rent Level Average in €/sqm/month on postcode level

< 9.50 13.50 < 15.50 Water Area Industrial or Traffic Area 9.50 < 11.50 >= 15.50 Green Area Other Area

11.50 < 13.50

Source:Source: JJLL,LL, e VALUEmpirica Marktdaten systeme

Cover page 4 Contacts Market for condominium apartments Berlin

Asking prices are improving in the most affordable purchase price segment

In the first half of 2021, the median asking price for a Purchase price bands for condominiums Berlin condominium apartment increased by 8.7% year-on-year to its current level of €5,260/sqm, thereby maintaining Purchase price in €/sqm the momentum observed last year and matching the 10,000 9,060 Upper 10 % average of the past five years. There was a similar trend in 9,000 the top purchase price segment (most expensive 10% of 7,920 8,000 Upper 25 % properties being offered for sale; €7,920/sqm). Here, 7,000 Median purchase prices rose by 6.7% over the year, one 6,000 Lower 25 % percentage point more than in the same period last year, 5,000 but slightly below the five-year average. Prices in the 4,900 Lower 10 % 4,000 most affordable purchase price segment (lowest 10% of the properties being offered for sale) developed as 3,000 3,470 strongly as in the previous year to reach €3,470/sqm 2,000 (+10.9%), but growth was more restrained than the 1,000 Berlin Berlin average of the past five years. The new-build segment total new built was as strong as usual, with median prices rising by 8.1% to €6,300/sqm, around 0.4 percentage points above the Source: JLL, VALUE Marktdaten (Status: July 2021) five-year average. At district level, there are still wide variations in median asking prices between the central and peripheral districts, although many areas of the periphery have caught up significantly.

Distribution of condo listings by price group Development of purchase prices for condominiums

Purchase price in €/sqm/month 9,000 Purchase price in €/sqm > 8,500 8,000 ≤ 8,500 7,000 ≤ 8,000 ≤ 7,500 6,000 ≤ 7,000 5,000 ≤ 6,500 ≤ 6,000 4,000 ≤ 5,500 3,000 ≤ 5,000 2,000 ≤ 4,500 ≤ 4,000 1,000 ≤ 3,500 0 ≤ 3,000 ≤ 2,500 ≤ 2,000 H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 H1 2021 H2 2020 -600 -400 -200 0 200 400 600 800 1,000 Median price Half-year difference in number of listings Prime price (90 % percentile of all condo listings) H1 2021 Median prices (existing properties)

Source: JLL, VALUE Marktdaten (Status: July 2021) Source: JLL. VALUE Marktdaten, IDN immodaten (Status: July 2021)

Cover page 5 Contacts Asking condominium prices Berlin

Velten Bernau Hohen Neuendorf

Zepernick

Hennigsdorf

B 109 A 10

Pankow A 114 Reinickendorf B 96a

B 2

Falkensee A 105 B 158 Ring (Berlin)

A 111 Spandau Mitte Lichtenberg Neuenhagen Petershagen Marzahn- B 5 Hellersdorf Fredersdorf-Vogelsdorf Friedrichshain- B 1/5 B 2/5 B 1/2/5 Kreuzberg Charlottenburg- B 179 Wilmersdorf Rüdersdorf

Schöneiche A 100 A 115

A 104 A 103 Tempelhof- Schöneberg A 102

Neukölln Treptow- Erkner Steglitz- Köpenick Zehlendorf

A 113

B 1 B 101 Kleinmachnow B 96 Teltow Potsdam Flughafen Stahnsdorf Berlin-Schönefeld

0 5 10 km Ludwigsfelde OpenStreetMap-contributors

Condominium price level Average in €/sqm on postcode level

< 2,500 4,500 < 5,500 Water Area Industrial or Traffic Area 2,500 < 3,500 >= 5,500 Green Area Other Area

3,500 < 4,500

Source:Source: JJLL,LL, e VALUEmpirica Marktdaten systeme

Cover page 6 Contacts Contacts

Michael Bender Helen Lindner Ralf Kemper Head of Residential Germany Head of Residential Development Head of Valuation & Transaction Frankfurt Germany, Berlin Advisory Germany, Frankfurt +49 (0) 69 2003 2333 +49 (0) 30 203980 703 +49 (0) 69 2003 1092 [email protected] [email protected] [email protected]

Helge Scheunemann Roman Heidrich Sebastian Grimm Head of Research Germany Lead Director Valuation & Lead Director Valuation & Hamburg Transaction Advisory, Berlin Transaction Advisory, Frankfurt +49 (0) 40 350011 225 +49 (0) 30 203980 106 +49 (0) 69 2003 1196 [email protected] [email protected] [email protected]

Authors

Dr. Sören Gröbel Christian Giesemann Director Research, Berlin Lead Director Research, Berlin +49 (0) 30 203980 151 +49 (0) 30 203980 201 [email protected] [email protected]

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