A sign advertising a house for sale hangs outside the property in the Nauener Vorstadt district of Potsdam. Photographer: Michele Tantussi/Bloomberg
Pedestrians walk past stores on Brandenburger Street in Potsdam. Photographer: Michele Tantussi/Bloomberg
A sign advertising a house for sale hangs outside the property in the Nauener Vorstadt district of Potsdam. Photographer: Michele Tantussi/Bloomberg
Potsdam was chosen by Friedrich as the site for Sanssouci , the summer palace he had built in the 18th century to allow him to escape the cares of office and court pomp of the capital. Photographer: Michele Tantussi/Bloomberg
Visitors look at property on display in a real estate agents window in Potsdam. Photographer: Michele Tantussi/Bloomber
Cyclists approach construction cranes on the site of the new government building and Nicolas church in Potsdam. Photographer: Michele Tantussi/Bloomberg
Potsdam, where Prussia’s Friedrich
the Great hosted the philosopher Voltaire and plotted wars to
expand his kingdom, is enjoying a post-communist revival that’s
pushed up home prices to the highest in eastern Germany. And
there’s more to come.
The city, 27 kilometers (17 miles) southwest of downtown
Berlin by car, has attracted corporate executives and figures
from the arts world since German reunification in 1990.
Residents include Hasso Plattner, co-founder of SAP AG (SAP), Axel
Springer AG (SPR) Chief Executive Officer Mathias Doepfner, fashion
designer Wolfgang Joop and film director Volker Schloendorff.
“If Berlin is Germany’s New York, Potsdam is better than
the Hamptons or Long Island because the commute is shorter and
it has everything from shopping to culture,” said Victoria von
Koeckritz, a real-estate broker at Engel Voelkers based in the
city. The firm has 195 offices in Germany, 29 in the U.S. and
outlets in 37 other countries.
The average price for a house in Potsdam is about 406,000
euros ($586,000), according to a survey last month by Focus
magazine and Empirica, a research firm with three German
offices. That made the city the most expensive in eastern
Germany, pushing Berlin into second place with 327,000 euros.
Potsdam real estate will appreciate by 41 percent through 2020,
the survey predicted.
Sanssouci Palace
Potsdam was chosen by Friedrich as the site for Sanssouci,
the summer palace he had built in the 18th century to allow him
to escape the cares of office and court pomp of the capital.
This, along with palaces and parks at Babelsberg, Sacrow and
other parts of Potsdam were added to Unesco’s list of world
heritage properties in 1990.
In all, the city has 150 royal buildings dating from 1730
to 1916 and 500 hectares (1,235 acres) of parkland, according to
Unesco. It’s surrounded on three sides by lakes and the Havel
River.
“There’s a lot of pressure for Potsdam to grow, but
there’s simply no space and not enough properties,” said Anja
Farke, who also works at Engel Voelkers’ local office. “The
royal parks, lakes and monuments hem in the city and Potsdam’s
growth potential is really limited.”
The cost of land is rising as developers compete for sites
in the best parts of Potsdam, such as the Berliner Vorstadt,
Babelsberg and the Nauener Vorstadt. Prices climbed to as high
as 400 euros a square meter in 2010, an increase of as much as
60 euros from a year earlier, a report by the city council last
month showed.
Babelsberg Studios
Bankers, industrialists and film stars from Berlin started
building villas in Babelsberg, the Potsdam neighborhood best
known for its film studios, at the end of the 19th century. They
include Plattner’s house on Griebnitzsee lake, which was
designed by Bauhaus architect Ludwig Mies van der Rohe.
British Prime Minister Winston Churchill used the building
during the 1945 Potsdam Conference, also attended by U.S.
President Harry S. Truman and Soviet leader Josef Stalin, that
decided the post-World War II order after Nazi Germany’s defeat.
A Babelsberg house designed by Albert Speer, Adolf Hitler’s
architect, is being sold by Engel Voelkers for 1.3 million
euros. Built in 1936, the house has 530 square meters, an
outdoor pool and original floor tiles and oak floors.
Earlier this year, the broker sold the Villa Sarre in
Babelsberg, an Italian renaissance-style house built in 1906
that was listed for 4 million euros. Farke declined to give the
sales price.
New Neighborhoods
Since the Berlin Wall fell, billions of euros have been
spent by the state and private investors to spruce up Potsdam’s
long-neglected palaces, villas and apartment blocks and to build
houses, said Jutta Moll, an official at Potsdam’s business
development bureau.
“A number of completely new neighborhoods have been
built,” she said. They include Bornstedt, a borough that
borders Sanssouci Park.
The local population increased to more than 155,000 in 2010
from less than 128,000 in 1999, according to official
statistics, and it may climb to 165,250 by 2015. Berlin has 3.4
million inhabitants.
Potsdam’s house prices are still lower than those of
western Germany’s wealthiest cities. The average price for
Munich is about 679,000 euros, the highest in the country,
according to the Focus survey. Frankfurt has an average value of
543,000 euros, while Hamburg’s is 436,000 euros.
War Damage
There’s still work to be done. The Prussian kings’ palace,
which was demolished by the communists after sustaining war
damage, is being reconstructed and will house Brandenburg
state’s Landtag, or parliament, when it’s completed in 2013.
SAP’s Plattner donated 20 million euros for the project.
Potsdam served for centuries as both a Prussian royal city
and a military garrison. This military tradition runs from the
18th century through the German Empire under the Kaiser, the
Nazis, the stationing of Soviet Red Army forces in and around
the city from 1945 to 1994, up to today with the German army’s
Operations Command Center in the suburb of Geltow.
Investors can still acquire a piece of the city’s military
past: a former riding hall that was used by the army is also due
to be renovated and converted into homes. Other projects include
the Chateau Palmeraie, a red-brick military barracks, restored
and marketed by developer Das Baudenkmal.de.
Tax Benefits
Potsdam’s listed historical properties are popular with
investors because they can be used to write off tax, the city’s
2010 property report said.
“People who buy to rent can write off 100 percent of the
restoration costs against their income tax over 12 years,”
Joachim Bongard, chief executive officer of Das Baudenkmal.de,
said by telephone. “In Potsdam, that’s generally 60 percent to
75 percent of the total sales price.”
Still, much of Potsdam’s residential properties will have
limited appeal: About 40 percent of the city’s apartments are
precast concrete blocks dating from the communist era, such as
those in the Waldstadt II district, said Katrin Schmidt, a city
land registry official.
Potsdam’s biggest problem is traffic jams because the main
street through the center of the city has only two lanes, Engel
Voelkers’s Farke said. The road can’t be widened because it
borders historic buildings and parks, she said.
“For many people, Berlin is too big, too loud, too dirty
and too poor,” Farke said. “Yet let’s be fair: A lot of people
wouldn’t live in Potsdam if it weren’t for Berlin.”
To contact the reporter on this story:
Leon Mangasarian in Berlin at
lmangasarian@bloomberg.net.
To contact the editors responsible for this story:
James Hertling at jhertling@bloomberg.net;
Andrew Blackman at ablackman@bloomberg.net.