|Wednesday 30th August 2000
Berlin property glut after decade of unification
This week marks the tenth anniversary of the signing of the Unification Treaty which brought the former East Germany and West Germany together.
It has been a decade of intense change for many - particularly in the new capital city, Berlin. As politicians moved from Bonn, property developers in Berlin expected a boom. But as Richard Edgar reports, the big businesses never appeared and Berlin now is having to look elsewhere for salvation:
It is really a cliché to start a report from Berlin on a building site, but still the building goes on. I stood on this site back in February and then there was just a big hole, well now it is an eight-storey office block just waiting for windows to be put in, and it is on Potsdamerplatz in a new commercial district.
|"Politicians moved to Berlin but the big businesses never appeared." |
What future does this block have? The fact is that Berlin has 1,500,000 square metres of empty office space. Even though the government is in Berlin, established companies from the old West Germany have, with one notable exception, found no need to send more than a handful of staff to represent them.
So as the old industry has failed them, the governments have tried a different tack - encourage the new economy, high-tech start-ups. Jörg Schönbolm Is the deputy Prime Minister of Brandenberg, the state which surrounds Berlin and, he describes his initiatives to attract new companies:
"First of all we train the workforce so that they can take a job even in a more complicated way. Secondly we give new entrepreneurs public money. The third point is that we are preparing a network so that the products can be sold through this network and we can help them to establish new relations."
But it is not just the government which is getting involved. Bewag is Berlin’s electricity and utilities company, one of the cities largest property owners , again much of it empty. Hans Huber Manages that portfolio and standing outside an empty office he says his company is going to extraordinary lengths to tempt start-ups to its properties:
|"One incentive maybe for example, that the first year is free of rent, or that all the furniture for the office space, or loft space, may be put in, and these different incentives are possible." |
Not everyone is impressed with the efforts being made Karl-Heinz Schutner is from the organisation which represents small and medium size enterprises, he says there is still too much bureaucratic red tape to attract enough business.
"It centres on speeding up the decisions of the Berlin senate for it to work less bureaucratically, so that companies have to wait for less time between applying to move to Berlin and getting permission. That is a process which can be drawn out for over half a year to a year, or even longer."
But Berlin’s secret weapon may be more subtle than any of the economic goodies on offer, with fashionable cafes and a bustling nightlife, many fall in love with the city and decide to stay. Ares Kalandides from Berlin Partners which promotes the city says this new strategy is beginning to have considerable success.
"We have had, since reunification, about 100,000 start-ups, successful start-ups, we are not talking about companies that went broke. Of course it is high risk but we all know that investment is about taking risks, either it works or it does not work."
|"We all know that investment is about taking risks - either it works or it does not work." |