Opportunities through commitment

That Adlershof offers great opportunities for sustainable real estate investments has been a truism at the latest since construction began on the new Berlin airport BBI. It is also a well known secret that this has given rise to a new axis of development in the southeast of Berlin.

Well known national and international real estate investors are already committed in Adlershof, and this for the most diverse sizes and uses from office and retail to customised solutions for high-tech companies. These investors are satisfied, and the vast majority are planning further investments.

Although the offering for long term leases of existing real estate is limited, as an alternative project developments are nevertheless a rich source of additional investment opportunities, because besides the classical office use there is a growing demand from companies based in Adlershof for combined uses of office, laboratory and archive space. Also companies in Greater Berlin are increasingly turning their attention to Adlershof. This offers dedicated project developers the opportunity of creating tailor made solutions together with the tenant, particularly in view of the adequate areas the location still offers today.

The world of real estate in Adlershof could therefore be satisfied – if it wasn’t for the discouraging environment born of the financial crisis. This demands greater equity and the burden of proof on loan applicants that tailored areas are also suitable for other uses should the original tenant leave on expiry of the lease. This problem must be resolved jointly by project developers and tenants. Leases must run for at least ten years. However banks, if they still finance project developments at all, tend to demand fifteen years for tenant specific buildings. Higher returns on investment are needed to cushion the higher capital costs. Moreover, the decision processes are considerably longer for potential users. For companies operating on the international level leases running for longer than ten years are approved by their head office – for a considerably longer overall process.

Nevertheless, the highly encouraging development of the Adlershof location and the professional support on site are worth the dedication and commitment. And one day this financial crisis too will be over.

Rolf Mensing

Link: www.clsholdings.com