CONSUS Real Estate AG: Will the introduction of the Berlin rental freeze affect CONSUS, Germany’s leading real estate developer?
“Berlin will get a rental cap. (…) It will not be possible to increase rents for 5 years from today. Details to follow”.
In the days before the Mayor’s announcement, the plan to freeze Berlin rents had already become known and this caused real concern in the real estate sector of the German capital and throughout Germany: the proposal of the left leaning state government could suddenly make Berlin, which in recent years had become one of the most sought-after locations on the growing German real estate market, unattractive.
The Berlin rent cap will not affect Consus on the basis of the current bill.
In a key issues paper which was published in summary by the Berlin Senate, the state government outlined the scope of its proposal:
The law, which is expected to be passed at the beginning of 2020, but will apply retroactively to 18 June 2019, prohibits all rent increases for flats without a fixed rent. In addition, rent ceilings are to be set. Tenants can apply for actual rents that exceed these limits to be reduced to the applicable limit. Finally, in the case of new leases, the new rent may not exceed that of the previous tenant of an apartment.
The aim of the rent cap is simple: to put an end to the steep rise in residential rents in Berlin.
Has Berlin therefore come to an end as an attractive residential property market for investments?
For property developers, the answer is clear: No!
The reason for this lies in a short sentence at the end of the press release published by the Berlin Senate:
“New residential construction is completely exempt from the law.”
Andreas Steyer, CEO of CONSUS Real Estate AG, says: “We see ourselves as part of the solution for developing additional affordable housing. We need different political solutions from those that are currently being discussed. This includes the increased designation of building land and the acceleration of approval procedures. We are happy to offer our conceptual support for new and innovative solutions.”
Consus Real Estate AG (“CONSUS”), headquartered in Berlin, is a leading residential real estate developer in Germany’s top 9 metropolises. With a project development volume of around EUR 10 billion, CONSUS concentrates on standardised multi-storey residential construction. Through forward sales to institutional investors, the digitalisation of construction processes and industrial series production, the group operates along the entire development value chain. CONSUS shares are listed in the scale segment of the Frankfurt am Main Stock Exchange’s over-the-counter market and the m:access segment of the Munich Stock Exchange’s over-the-counter market and are traded on XETRA in Frankfurt, among other places.
Anette von Zitzewitz
phone +49 171 2432736