MANCHESTER, England, June 26 /PRNewswire/ --     Over the last 12 months, the emergence of Berlin as one of the
world's property investment hotspots has been obvious but what is the truth,
the potential and the pitfalls of this dynamic, cultural and economic
metropolis?

One key factor for potential buy to let investors is that only
12% of Berlin residents actually own their own property, so the city is still
very much a renters market. In Germany, renting property, as opposed to
buying, is not deemed socially inferior. Most people who could easily afford
to buy property choose not to because renting is such good value.

Before the Berlin wall came down in 1989, Berlin enjoyed a
privileged status in terms of subsidies. This affected rent and house prices
as both West and East Berliners were encouraged to stay in the city with
subsidised housing being one of the key incentives. This legacy from the past
is one of the reasons that the property market has not developed as quickly
as other cities in Germany and the rest of Europe.

According to a recent report from Jones Lang LaSalle, one of
the world's leading real estate services and money management firms; 'Prices
in Berlin are about 10% of those in London and over the last 18 months
estimates for Berlin capital investments prices rose by 20%. Next to a
buy-and-hold strategy, condominium conversion may become a very interesting
exit strategy and yield driver due to the low ownership rate in Berlin.'

Overall, both rent and average house prices are still
relatively affordable in Berlin, when compared to cities such as Munich and
Frankfurt where property can be up to 50% more expensive.

The Global Property Guides put rental yields in the city at
4.4%. They report that the best yields, of between 6-7%, can be achieved by
apartments in a city centre location that are less than 90sqm. However,
investors should note that German law is very pro-tenant. Landlords can be
fined if they try to increase the rent to in excess of 20% above the rent
charged for comparable premises. Tax on rental income is also high and can be
up to 25% for non-residents owning rental properties in the city.

General economic conditions in Germany are also currently
favourable and improving; interest rates are rising and many foreign real
estate funds are making substantial investments in Berlin. The city has seen
multi-billion pound investments from UK and European investment banks, such
as Terra Firma, which are buying up vast apartment blocks.

Private equity funds such as New York-based Cerberus Capital
Management and Goldman Sachs' Whitehall investment fund have also been
targeting Berlin. In 2004, the two together purchased 65,700 units of Berlin
public housing for EUR2.1bn. Investors from Britain, Ireland and America
spent GBP7 billion on properties in 2006 alone.

In addition, leading multinationals such as Sony, MTV, Universal and 
DaimlerChrysler have headquarters there.

The recent Economist Intelligence Unit's worldwide cost-of living survey 
found that Berlin, while having a population of 3.4 million and
being the second biggest metropolis in the European Union after London, is
actually only the 72nd most expensive.

The German Government has invested some EUR75bn in rejuvenating Berlin 
and this considerable cash injection has kick-started growth in the property 
market. 2006 saw a tentative 0.2% rise in prices after
losses in the previous year, whilst the German economy as a whole expanded by
2.5% in 2006; the fastest growth since 2000. Predictions are that it looks
set to increase by a further 2.5% in 2007.

Unemployment in Berlin fell to 7% in November 2006, its lowest
level in four years and this trend looks set to continue. Prices are
currently low but as unemployment decreases and the economy recovers, buying
power will increase which will in turn drive prices and rental returns up.

Pelle Langli, chief executive of Emerging Real Estate - one of
the UK's leading emerging property investment consultancies - and agent for
Schlosspark-Carree, an exclusive development in Berlin's Charlottenberg-
said; 'Germany is a new market for most overseas investors and it will take
time to develop. Therefore, investors should take a 10 year view, rather than
expecting instant returns.

He concluded; As a city, Berlin is on the cusp of great change and offers
significant capital appreciation for investors at all levels.'

Factors to consider when buying a property in Berlin:

1. The size of property is always measured in square metres (msquared).

2. The number of rooms quoted generally does not include kitchen &
bathroom

3. In Berlin, as with most European cities, the vast majority of
dwellings are apartments.

4. Mortgages for non-German nationals are not easily available at the
moment, but it is anticipated that the German banks will offer mortgages in
the next few years. (Currently German nationals can obtain mortgages of 104%.

About Emerging Real Estate:

Emerging Real Estate - your personal guide to buying property
in the emerging markets.

As one the UK's leading emerging property investment consultancies, we
offer clients a range of services and sound advice by:

- Identifying high quality overseas property investment
opportunities

- Offering you exclusive property developments with exceptional
value potential

- Assigning you a personal property consultant to work with

- Achieving 98% customer satisfaction for buying property abroad

- Supporting you throughout the property purchase process

For further information Emerging Real Estate can be contacted
    on +44-(0)845-601-7293, info@emergingrealestate.com, 
    www.emergingrealestate.com