Photographer: Krisztian Bocsi/Bloomberg
20 New Residential Towers Are Being Built in Frankfurt Because of Brexit DemandBy
Condominium prices increased by 15% in 2017, new study finds
Germany’s highest residential building to be completed by 2019
(Machine translation provided by Google and reviewed by Bloomberg editors.)
The prices for new condominiums in Frankfurt have now reached such a high level that it pays off for project developers to build high-rise residential buildings and more and more such towers are being built in the German financial capital. This emerges from an assessment by consulting company Bulwiengesa AG.
In 2017 alone, asking prices rose by 15 percent compared to the previous year. A total of eight residential high-rise buildings have been completed since 2014 in the city. 20 more could be added by 2022. Five are currently under construction and another 15 are planned. These are key findings of the study.
"The cost of building skyscrapers is about twice as high as in ordinary multi-storey housing," Sven Carstensen, Frankfurt branch manager at Bulwiengesa, said in an interview with Bloomberg. "Therefore, you also need correspondingly higher revenue."
He explains the increase in prices above all with the high demand pressure. Unlike other cities, Frankfurt offers little land potential. That applies especially in the city center, he said. Skyscraper are the answer. A factor should also be the exit of Great Britain from the EU. "The expected influx of Brexit newcomers will help to absorb the volume of high-rise housing," Carstensen said.
While it is unknown how many bankers will ultimately move to Frankfurt, there are plenty of forecasts. "We expect that at least half of London’s declining financial jobs will be relocated to Frankfurt, which will be at least 8,000 employees over a period of several years," Helaba Chief Economist Gertrud Traud said at the end of August.
One of the new high-rise residential buildings in Frankfurt is the 51-storey Grand Tower, which has been under construction since the beginning of 2016 and is due to be completed in 2019.
"90 percent of condominiums are now sold to a German and international clientele," Juergen Blankenberg, managing director of developer GSP Staedtebau, said. According to the company, the tower will have a height of 172 meters and is currently the tallest residential building under development in Germany. Frankfurt is pushing itself as a location for the tower - "also because of the excellent infrastructure for an international group of buyers", Blankenberg said.
According to Bulwiengesa, this year’s highest construction activity for new condominiums overall, not just for high-rise buildings, can be found in downtown Frankfurt. The consulting firm identified 24 projects with around 2200 apartments in this area. The company takes a closer look at the market once a year.
The weighted average price of new condominiums is around 6190 euros per square meter in Frankfurt, according to the data. The prices vary greatly, based on location.
Skyscrapers are not new for Frankfurt. In the office sector, they have long dominated the skyline. But now they are increasingly being built for apartments. Carstensen: "There are thus few acceptance problems - both from the administration and from the urban society".