German private bank's chief, Mr., under investigation for financial misconduct

German private bank's chief, Mr., under investigation for financial misconduct

In a Nutshell: Berlin Real Estate on the Rise, but Challenges Remain

Chatting with Marcus Lingel, the Man Behind Merkur Privatbank, About Germany's Real Estate Market

Börse Online: Hey Marcus, what's the lowdown on the German real estate market?

Marcus Lingel: Well, buddy, let's dive into it! I reckon we've passed the rough patch, and things are looking up for the German market. Now, during the real estate crisis, our business with construction companies was hit pretty hard. In 2022, we were at a whopping 1.6 billion euros, but in 2023, it dipped down to 840 million, and dropped even more to 653 million in 2024. It'll be a tough market till 2025, but I've got a feeling things will pick up significantly from 2026 onwards.

That sounds promising, but what's the basis for this optimistic outlook?

Good question, mate! The sales of project developers have been improving since the fourth quarter of 2024, and mortgage financing demands are increasing significantly. Another indicator pointing towards a turnaround is the sharply rising rents in new buildings. However, the demand for new project financing will take time to pick up. So, I'd say our business is likely to remain low for the whole of 2025. But you know, we've weathered the storm here at Merkur, and we've got through it all pretty well. Out of around 250 financings, only eight have failed, and we've managed all existing risks.

So, which cities have faced the brunt of the crisis?

Among the major cities, Munich has been hit the hardest, but Stuttgart and Berlin haven't been as badly affected.

With the crisis easing, where do you spot expansion opportunities in Germany?

Well, there's potential in the Berlin real estate market, no doubt about it. At present, we're exploring possibilities and scoping out opportunities, mainly with construction companies—our biggest customer group. If the opportunities look good, we'll be making moves quickly. Berlin's market has a strong growth orientation, and we see it as an opportunity to diversify our real estate business beyond our current regions.

What makes Berlin so interesting in this context?

I'm glad you asked! We believe we can diversify our real estate business by venturing into the Berlin market. The goal is to broaden our portfolio, and Berlin checks all the boxes with its growth-oriented economy.

A Bit About Marcus Lingel

Marcus Lingel is the head honcho at Merkur Privatbank, based in Munich. He's been with the bank since 2000, took over the reins as managing partner in 2005, became the chairman of the board in 2008, and currently owns a substantial chunk of the bank.

The Lowdown on Merkur Privatbank

Merkur Privatbank, under Marcus Lingel's leadership, has grown considerably in the past 16 years. In October 2019, it absorbed key parts of Bank Schilling & Co and currently employs around 500 people. The headquarters are in Munich. In the 2024 business year, the financial institution recorded a gross profit of 29.5 million euros, and earnings per share improved from 1.39 to 1.49 euros compared to the previous year.

Additional Stuff You Might Want To Know

Berlin's real estate market, when compared to other major cities in Germany, displays a unique blend of recovery, moderate growth, and structural issues. With an increase of roughly 2.2% in year-over-year notarized purchase prices for existing apartments in Q1 2025, the market is clearly showing signs of improvement. However, new housing development prices are lagging due to high construction costs, rising interest rates reducing demand, and supply constraints. Rental markets, especially in the commercial sector, are experiencing challenges with rising vacancies and a split between prime and secondary property rents.

Compared to other major cities like Cologne and Stuttgart, Berlin is showing relatively moderate price growth. Renewed upward momentum in markets across Germany's major urban centers is apparent, yet Berlin remains cautious in its recovery. For more in-depth insights, be sure to check out why these residential properties are becoming popular again.

1. With the sales of project developers improving and mortgage financing demands increasing, Marcus Lingel, the head of Merkur Privatbank, believes that things will pick up significantly in the German real estate market from 2026 onwards.
2. In evaluating investments in the industry, it's important to consider that the demand for new project financing will take time to pick up, and the market may remain low until 2025.
3. Marcus Lingel identifies Berlin as an opportunity to diversify Merkur Privatbank's real-estate business, attracting interest due to its growth-oriented economy.
4. In the Berlin real-estate market, rents in new buildings have been rising sharply, but new housing development prices are lagging due to high construction costs, rising interest rates, and supply constraints.
5. When assessing the risks associated with real-estate investing in Berlin, it's worth noting that the rental markets, particularly in the commercial sector, are experiencing challenges with rising vacancies and a split between prime and secondary property rents.

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