While Berlin’s airport (BER) has yet to be finished, the area around it has serious potential for office development. Indeed, we suggested as much two years ago when presenting our survey of the local office real estate market at the airport. The 2019 update now reveals: There is a flurry of activity in the surroundings of BER, yet for the majority of developments it is important for the airport to open eventually.

Many people hope that Berlin’s new international airport will open soon, and not just property developers who built and invested in its vicinity. At the time of this writing, it is scheduled to open in 2020. Having once again analysed the development areas around the airport, we found: Despite the lingering uncertainties regarding the opening date of the new airport, its surroundings are bustling with dynamic development almost everywhere you look. A lot has happened within a very short period of time—and before the airport has even opened—north of the airport grounds and directly south-east of Berlin’s city limits.

There are so far no classic “out-of-town” markets in Berlin like the ones in Kaiserlei or Eschborn just outside Frankfurt. The present office market in Schönefeld (the suburb hosting the new airport) is still dominated, for the time being, by vintage buildings and a handful of newly constructed buildings. Other regional clusters are located in Waltersdorf, in the greater area of the old Schönefeld airport and in the vicinity of BER itself. As the opening date of the airport draws nearer, the building activity will gather momentum, and evidence on the ground around the airport shows it has already begun to do so. Even at this point, it is easy to see that the development activity at BER is following the classic pattern of airport locations centred around an airport city and supplemented by business parks with their typical mixed-use tenant line-up.

The survey discusses several development areas in detail. The development land of several hundred hectares would collectively accommodate more than 4.5 million sqm GBA. Over 1.85 million sqm thereof may be realised in the form of office accommodation. The areas examined differ from each other, and considerably so in some cases. In addition, the differences in regard to location, size and breakdown of owners coincide with different development timelines. Some areas are zoned for immediate developments, whereas others are still awaiting approval of their local development plans. The office developments whose planning progress has advanced farthest are primarily concentrated in Neu-Schönefeld and represent neighbourhood developments, e.g. Sonnenhöfe and Mizarstrasse, among other projects.

Neu-Schönefeld – Special Status for a Mixed-Use Quarter

The development of a mixed-use quarter that includes residential and office units in the core area of Schönefeld grants a long-term special status to the development area of Neu-Schönefeld, which is open to development regardless of when BER will open. In no other development area of the BER submarket will developments of the use types office and residential be combined on a comparable scale. Several factors work in favour of Neu-Schönefeld as office location:

1. A very keen demand in Berlin is matched by a very short supply in office accommodation on the city’s office real estate market.
2. Office employment as a whole is expanding in Berlin, thereby ensuring a sustained demand level in future.
3. The volume of new construction in Berlin remains insufficient to narrow the existing gap between supply and demand.
4. The vacancy rate is particularly low in Berlin’s sought downtown locations.
5. Neu-Schönefeld has excellent private and public transport links to the city and lies within easy reach of the airport.
6. All office schemes here are of new-build quality.
7. The new offices are well integrated into an integrated neighbourhood including residential accommodation.
8. There is reason to assume that the urban character of the development area will improve over time.

Unlike the other development areas, some of the construction projects in Neu-Schönefeld are already underway or indeed completed.

Airport Location: No Better Time than Now

Conditions are currently favourable for investors who wish to realise projects in the development areas discussed. For one thing, the long-term rent level on the overall market around the new airport will go up – and will do so even before the airport opens, meaning in sync with the progressive completion of the development areas in this submarket.

The marketing of real estate in the greater airport area is facilitated by the low trade tax rate in the municipality of Schönefeld, which is relevant for occupiers of every kind. Conversely, property developments within the nearby city limits of Berlin are at a competitive disadvantage, which seriously hampers their marketing prospects.

At the same time, the Schönefeld development areas compete with the inner-city locations of Berlin, and benefit from the growing supply shortage there. In other words, the conditions for setting up an office location here are quite auspicious.

The current update of the survey is available for download in PDF format (in German, link below). You can also download the 2017 survey on the office real estate market at the BER (PDF in German).

Contact person: Lina Wegener, survey author, bulwiengesa, wegener [at] bulwiengesa.de