Property investors are increasingly facing both financial and demographic challenges. How does responsible property investment work in Germany? Read the guest post by Enver Büyükarslan, Managing Director of Berlin’s EB GROUP and board member of various international property funds, on our blog for the answer.
By 2045, the German population will have grown from almost 82 million to 85 million, and there is no reprieve in sight for the housing markets in big cities. Plus, communities also need to address the needs of an aging society. In the face of such demographic challenges, property investors need to live up to their responsibilities: Returns must not be achieved at the expense of tenants. Despite this, the current demand for housing is driving up costs for tenants, while prices are soaring in the top seven biggest cities. But rent can only rise up to a certain level. The breaking point has already long since been reached for many households–and not only in regions with low levels of income. The best alternative to excessively high prices is a stable tenant base.
The EB GROUP has seen good results from taking various measures to invest in the quality of living: A socially responsible, energy-efficient facade renovation was completed at a building complex in Mehringplatz–one of Berlin’s major social hotspots with a large immigrant population. This resulted in reduced heating costs, and therefore a lower financial burden on the tenants. The EB GROUP also waived their allocation of eleven percent of the modernization costs, ensuring that the location was held by the tenants. The feedback was very positive, with residents enjoying new soundproofing as well as the financial relief. And the aesthetic improvements to the property did not go unappreciated either.
Accessibility, doorman service, neighborhood meetings
We also want to be prepared to help the growing population of elderly tenants: In selected properties we have invested in accessible apartments, providing a doorman service and ensuring that empty apartments are fitted out for neighborhood meetings. We are convinced that sustainable returns cannot be achieved without social considerations.
And it is our institutional investors in particular who welcome this and back our efforts.
About the EB GROUP:
The EB GROUP, a property investment company with vertical integration of all interfaces in the property industry, supports national and international investors in property investment. The multidisciplinary team of some 160 employees possesses proven expertise in acquisition, management, and appreciation of residential and commercial properties in Berlin incl. Potsdam, Hamburg, and Dresden. Since it was founded, the company has implemented a purchasing volume of EUR 1.7 billion.
The EB GROUP is headquartered in Berlin, with branches in Dresden and Hamburg. Find out more at www.eb-group.net.
Another blog post looking at the topic of “responsible property investment” will follow shortly. Read our interview with Christian Stupka, an expert in housing cooperatives who also works as a consultant offering local authorities advice on demand-based housing.