There is an increasing demand for smaller apartments in Berlin too. Those studio apartments are more relevant for new lifestyles & habits of Berliner in the capital city. We have a look at the reasons of an increased demand and study how to take advantage of that trend.
Small home, big yield
A micro-apartment can be defined as such:
A reduced surface ideally between 20m2 and 40m2 which layout allows for a good use and optimisation of the space where only what’s strictly necessary is spread over 1 or 1,5 rooms.
This definition should be completed with a good location for what should be a practical home base for the tenant. Good location doesn’t necessarily mean right in the core city center but also a lovely area in a developing district well connected to public transportation. Convenience stores in the area are also appreciated. One can also think about the importance of universities or business centers for students or young professionals.
This segment is also composed of high-class furnished studio apartments in the heart of the city. Those are sought-after by big companies looking for temporary accommodation solutions for their top-tier employees when starting a new position or coming for a long-term project in a local office. Yield can sometimes reach 6% in that segment.
A growing segment thanks to singles of all ages
If we can certainly see the increase of rent prices as one major motivation for the renewed interest in that kind of apartment, one should also think about the current evolution of our households’ structure to explain the success of that segment. In Germany, the share of households held by single persons is only increasing the past few years. Berlin is a national champion with almost 50% of all households being people living alone. This number reaches almost 70% in Kreuzberg where a lot of cool hip young professionals are living. They have adopted more nomad lifestyles defined by co-working spaces and afternoons spent working from a laptop in a café. The city provides everything for entertainment, work and life. Home has become only a place to sleep and have breakfast in the morning.
However, micro-apartments have also caught attention of another population than young singles. Seniors living alone have also shown interest in smaller more compact homes. After their children have left the family home, some are more than happy to swap generous space for a more convenient location in the city center. That allows them to have all convenient stores within a walking distance and to be close to the rich cultural life only a large city can offer such as plays, concerts, museums and exhibitions.
Invest-AB is your partner in Berlin for international customers looking for rental investment opportunities in the German capital. Our portfolio has several opportunities for rental investments on micro-apartments in Berlin. Don’t hesitate to get in touch with us to know more.