General Berlin


BAKING: One of Germany’s last great culinary secrets is slowly leaking out to Irish foodies, writes Derek Scally

ASK A GERMAN WHAT they miss most about home and the answer is always the same: their daily bread. German bread runs the gamut from moist, nutty Vollkorn to the dark, chewy Pumpernickel. With more than 300 varieties to choose from, you could enjoy a different kind of bread for almost every day of the year.

With that kind of choice, it’s little wonder the average German polishes off their own weight or more in bread each year, around 90kg per head.

Little is known about Germany’s centuries-old tradition of crusty goodness beyond its borders.But, like German Christmas markets and German wine, Germany’s last great secret is slowly leaking out to Irish foodies.

Small wonder: we may pride ourselves on our baking tradition, but after our batch loaf, brown soda bread and white soda bread with raisins, the list of traditional Irish bread crumbles to a halt.

For decades, the average Irish family has been stuffing themselves with what could best be described as an industrially produced bread substitute. One prominent Irish baker describes his colleagues in the trade as “not bakers but industrial engineers”.

But around the country, young food lovers are turning their backs on the bake mix and chemical “improver” and setting up their own bakeries. The National Bakery School, founded in 1935 and now part of the DIT, runs highly popular courses in bread and cake baking: for the current autumn courses, it received 600 applications for 200 places.

Leading the fightback against mediocre bread in Ireland is the head of the bakery school, Derek O’Brien. “We’re very unfortunate in Ireland because of our historical association with the British, who make the worst bread in the world,” he says.

Our early adoption of the supermarket, combined with rising city centre rents added to the pressures, he says, made it impossible for small- and medium-sized bakeries to survive.

“Irish people don’t know good bread because of what we’ve been eating since mid-1960s, and because we’ve become used to it.”

Bread has always been part of O’Brien’s life: after growing up in a family of bakers, he studied baking in Britain and Germany and now even has his own micro-bakery in his back garden.

As well as running classes in Dublin, the school sends 25 Irish students several times a year for intensive courses at a master bakery school near Heidelberg in southern Germany.

The contrast between Germany and Ireland is stark: while there are around 22,000 bakeries in Germany, around 47 per 100,000 population, Ireland has just 7 per 100,000.

The German bakeries range in size from small family-run outlets with the shop in the front and the bake house out back, to industrial bakers delivering to supermarkets.

What they share, and what Ireland lacks, are strict quality controls from the German bakers’ federation. Bakers go through strict training to earn their Meisterbrief or master craftsman diploma. Only then can they call their premises a bakery.

But, as in France and Italy, German bakeries have come under attack in recent years from “bake shops”, chain stores that take deliveries of frozen dough and heat it up with in-store ovens.

The chains launched a vicious price war and drove many traditional bakers out of business, after a lifetime of getting up at 3am to serve their customers.

But now, after years of decline, there are signs that the traditional bakeries are making a comeback. One of the younger generation is Peter Klann, owner and master-baker of the Soluna food store in Berlin.

The store, in the Kreuzberg neighbourhood, has become a place of pilgrimage where visitors are greeted with the foodies’ equivalent of incense: warm air carrying the smell of heated flour and baking bread.

Like all good bakers, Klann is passionate about his trade. His philosophy: after decades of industrial production, people are looking once more for authentic food experiences.

“For me, baking bread is alchemy: earth, fire and air,” he says. “Others play guitar or paint. With me, it’s the alchemy of food. I don’t want to just bake bread, I’m making art.”

A taste of the breads on offer shows that he isn’t kidding. Unlike Irish wheat-based breads, many of the most popular breads here are hearty rye-based varieties, baked with Sauerteig or sour-dough.

This distinctive dough is made with special wild yeast that produces lactic acid, giving the bread its distinctive sour taste.

Klann shuns chemical catalysts now prevalent in the industry and produces his sourdough the old-fashioned way, leaving it to rise for 24 hours before sliding it into the clay oven.

The true sign of quality in Klann’s breads is, as with all real German breads, they need time to mature after baking, and often taste much better a week after they have left the oven. That has helped him set up a thriving mail-order business for homesick Germans around Europe.

Like many of Germany’s new generation of bakers, he decided to go the slow-food route after becoming convinced that the very industrial production meant to save the industry in an era of rising costs, was actually turning people off bread.

“The mistake most bakers make is that they take the soul from the bread,” says Klann. “When you do that, people notice it and you can’t be too surprised when the bread is no longer in the limelight but just a support player, a carpet for cheese or whatever.”

Klann is a man on a mission, a passionate believer in bread. Derek Quinn shares his convictions and says that, even in tighter economic times, Irish people can be turned on to the health benefits of good quality bread.

“We need to educate the public that there is such a thing as good bread,” he says, “but they have to ask for it.”

© 2008 The Irish Times

Many of the Irish investors who spent €1.3bn buying into the German commercial property market in 2007 are now contemplating getting some of that money back.

Some find themselves in a situation where they need money to support their Irish business activities. Others have found their German properties onerous, because they lack knowledge of the local language and tax regulations and don’t have the necessary financial and legal resources to make their assets perform.

Irish property and investment consultants Farrelly & Mitchell (F&M), have reduced by €1m the borrowings of one of its investment funds which bought into a retail centre in Roethenbach in Germany.

F&M managed to take advantage of the credit crunch by offering to repay a loan to the global bank which lent it funds. The global bank was thus able to free up capital and, in turn, F&M’s Alpine Private II fund was able to reduce its borrowings.

The global lender, desperate to increase its liquidity, agreed after lengthy negotiations to waive €1m of the loan principal owed on this €9m mixed-use commercial property in Roethenbach, Bavaria.

They well-received when we sought to move the loan to a local bank. The security of a local asset, combined with the relative resilience of the German economy, meant that the notoriously conservative German banking system was willing to offer loan-to-value ratios and interest margins that the more exuberant Irish and British lenders were giving out 18 months ago.

The difficulty for most Irish investors is that they lack the local knowledge and industry expertise to exploit similar opportunities. If you want to acquire the right building; manage your tenants and leases; implement a successful exit or tax strategy; or access fresh funding from the well-capitalised German banks, then you need English-speaking German-trained professionals working for you.

Local knowledge and understanding of the language are critical in order to carry out meaningful research at the sourcing and acquisition stage. The commercial property markets in major cities such as Hamburg, Berlin, Munich and Leipzig vary, both in terms of investment characteristics and quality. The same prinicples are true when considering investing in two seemingly identical city blocks within any major city.

The language barrier will not be a big problem initially, and investors will find that German property agents, lawyers and bankers speak excellent English. However, when it comes down to the hard bargaining - over loan-to-value ratios, covenants and the finer details of leases — the discussions will inevitably lapse into German.

Contracts

This disadvantage is compounded by the fact that Germany has a different legal and leasing system. A lawyer will only examine contracts from a legal perspective, to ensure that there are no material defects. They will not examine them from an asset management or commercial perspective, to ensure that they conform to the industry norm, particularly in the area of landlord’s responsibilities and recoverable expenses.

It is only after investors have gone through the stress and excitement of acquiring a property that the real work starts, in terms of sound and proactive asset management.

We have found that German-based and international property management companies don’t really want mid-market business. These companies have a business model that is usually based on managing assets worth more than €20m and consider anything less to be a nuisance. This is one of the main reasons why we are setting up our own asset management office in Berlin, to service the entire German market.

Overall, Germany is still an excellent market. This was proven spectacularly only two weeks ago when an Irish investment firm sold the Zeilgalerie shopping centre in Frankfurt, generating a 70pc return for investors after only 18 months.

Investors who wish to stay in this market can take advantage of the credit crunch by boosting their liquidity. In ‘The Pope’s Children’, David McWilliams pointed out that while Ireland is a nation of optimistic young borrowers, the older German population has saved throughout the country’s economic downturn. As a result, German banks are well-capitalised relative to British and Irish banks.

Marco Henke is the Head of Asset Management at Farrelly & Mitchell. Prior to joining Farrelly & Mitchell, he managed a number of closed-end property funds in Germany

- Marco Henke

Lisney, together with its German partner Kemper’s, have advised Ballymore Properties on the acquisition of a large retail site in Berlin for €155 million.

The retail site, which is known as the Kudamm-Karree, is situated in Germany’s prime retail district Kurfuerstendamm in the centre of Berlin. This site comprises not only retail and offices, but also some residential accommodation and a theatre. It currently has a lettable area of 63,000sq.m.

Ballymore Properties have plans to spend €450million re-developing this two-hectare site. Mike De Mug, Ballymore’s group retail director, said the site the company has acquired “Is one of the best in Berlin. It is an existing retail arcade with two office towers over it, one of which is a landmark building”. Mr Mulryan, Ballymore’s chairman and chief executive, commented “We plan to further develop and enhance the Kudamm-Karee to make it an appealing destination for Berliners and visitors alike”.

The advisors on this project Lisney is Ireland’s largest privately owned property consultancy firm and an independently owned and operated member of the Cushman & Wakefield Alliance. Lisney has enjoyed sustained growth in continental Europe and are recognised as the market leader in Ireland for German commercial investments. Lisney research suggests commercial property investments in Germany by Irish investors totalled €1.4 billion in 2006. Lisney has transacted properties valued at over €700 million on behalf of Irish investors in Germany and has currently another €280 million in the due diligence process. Lisney has three German professionals based in Dublin focussing full-time on the German property market.

Irish Property Berlin

Source: Lisney / Irish Times

WHY BERLIN & GERMANY
Population: Circa 3.4 Million
Size: Circa 890 Square Kilometres
Of which 12% Recreation
18% Forest
7% Lakes & Waterways
Remainder Residentail/Commercial

Berlin is

- The most densley populated city of Germany
- After London the 2nd biggest in Europe
- Since 1990 the capital of Germany
- Since 1999 the seat for the parliament
- Central in Germany

Headquarters for large National & International firms such as Sony, Hitchi, Coca Cola, Siemens, Daimler Chrysler, BMW, Schering, Gillette, Samsung……
City with most newspapers in Europe
Media Headquarter for 7 major TV channels in Germany
Music capital with Universal Music, Sony, BMG and MTV
One of the cheapest capital cities for residential/commercial property in Europe

Purchase Transactions:
Unlike in Ireland estate agents fees are paid by the purchaser in Germany. Fees vary from 3 to 6% payable. Between stamp duty, notary and registration fees, auctioneers fees an additional 10% need to be added to all property prices quoted. Notaries in Germnay handle purchase transfers. Schiller & Schiller can recommend vaires Notaries as well as Irish solicitors which are familiar with German law to check all pruchase transactions for a client.

German Banks will finance property bought by non-nationals. On average this can be between 40 to 50% of purchase price depending on property bought. There are tax breaks available on property bought that is classified as a listed building. Otherwise net income from rental is taxable at 20% in Germany.

As of March 2007 the following are the direct flights from Ireland to Berlin:

Aer Lingus : Cork (ORK) - Berlin (SXF)
Aer Lingus : Dublin (DUB) - Berlin (SXF)
Lufthansa : Dublin (DUB) - Berlin (TXL)
Ryanair : Dublin (DUB) - Berlin (SXF)
Ryanair : Shannon (SNN) - Berlin (SXF)

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This is what a toilet door looks like in Berlin. I love it! This particular door is in the once squat now tourist trap, the Tacheles.

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Old enough but interesting from an Irish perspective.

Escaping mass unemployment at home in the Seventies and Eighties the Irish came to pull pints and serve the punters of West Berlin’s bars and nightclubs. In the Nineties they flocked to the building sites to help reconstruct a reunified city after the Wall came down.

Now in the 21st century they have come back. This time they are taking over Berlin. At the far western end of the Kurfurstendamm - Berlin’s well-heeled shopping district - lies the headquarters of the new Irish property invasion.

In the last eight months alone, a group of Co Mayo investors has bought more than €40m worth of flats and apartments. At present they are negotiating a deal for a vast complex of apartments estimated to be worth €35m.

Spearheading the big Irish buy-up of Berlin is Mike Morris from the Mayo-based Premier Estates Maloney.

‘We started looking at Germany, and in particular Berlin, because it is a stable, conservative and trustworthy society,’ he says. ‘The company had thought about expanding our property portfolio into eastern Europe, but those countries are potentially unstable, which Germany is not,’ he adds, as he surveys three apartment blocks that the company owns close to one of the main motorways looping around western Berlin.

‘The €35m deal we are trying to secure now would land us with 900 apartments, 30 per cent of which need renovation. What we are offering in all our properties is a net return per annum of 7 per cent from rental incomes,’ he says.

Taking a brief stroll later across the Kurfurstendamm with Morris into the affluent Halensee district reveals the depth of the Irish investment invasion.

As he passes by a row of businesses below ornate 19th-century Wilhelmine apartments along the Westfaelische Strasse, with shops ranging from health food centres to lingerie stores, Morris points and says: ‘That’s Irish-owned, that’s Irish-owned and that’s Irish-owned. In fact most of the buildings on this side of the street have Irish landowners.’

Premier Estates Maloney and the other Irish companies following in their wake have not kept their investments solely to western Berlin. Their portfolio includes apartment blocks in the eastern and increasingly fashionable Prenzlauer Berg district. These include six retail units and 15 offices, with a branch of McDonald’s as the main tenant.

The expansion eastwards of the Irish investor follows a trend across Europe with entrepreneurs who made fortunes from the growth of the Celtic tiger economy buying up airports and shopping malls in England; thousands of apartments on the Spanish Costas and Florida; and hotels and ski chalets in the Balkans.

The Irish are estimated to be in the top three foreign investor nations in Berlin. However, in a city of 3.4 million, where only half of its citizens are working, German observers of the Berlin property market are extremely cautious.

Ralf Schoenball, a property expert for the Berlin-based daily Der Tagesspiegel, warns that Berlin may not be the best place for Irish investors to buy flats and apartments. ‘Don’t get me wrong here. I have been here since 1983 and I love Berlin. But the economy of this city has shrunk every year since 1996 with one exception: [growth of] 1 per cent in 2000.

‘Because of the shrinking economy there are fewer Berliners working and the incomes of the households are decreasing if you take into account the cost of living. For the housing market this means that, as people have less money, an increase in rents makes it harder for them to pay. There are also 100,000 empty flats in Berlin, so tenants can move around and find the cheapest places to rent.’

Morris brushes aside the cautious noises of German observers and says: ‘The prospects for Berlin look good in the long run. Many of the Germans in business here are too conservative.

‘There are good deals to be had here in Berlin and the long-term returns will be worth it. We might take a look at Dresden too.’

By Guardian Unlimited © Copyright Guardian Newspapers 2006
Published: 9/2/2006

This weekend it’s time for another edition of the annual Holy Shit Shopping event at Cafe Moskau.

This saturday from 12 to 10pm and on sunday from 12 to 8pm Cafe Moskau, located at Karl-Marx-Allee 34 is the home base of many Berlin based fashion designers and producers of nice design pieces from Berlin. 100 selected artists will present their artwork and sell their goods.

If you wanna shop for some cool Berlin Mitte Style or if you’re looking for some unusual christmas presents - Cafe Moskau is definately the must-be place this weekend. Well known Berlin Djs will provide you with the right soundtrack which adds to some very cool shopping atmosphere in one of the cool Berlin locations.
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Believe it or not Knut is now one year old!

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ap_knut_071205_ms.jpgThis is what he looks like now

Going Knuts

— In April sweets company Haribo released rasberry flavoured Knut sweets

— German toymaker Steiff have a special collection of Knut stuffed toys

— The first 2,400 Knut stuffed toys produced by the zoo sold out in 4 days

— In April he shared the cover of Vanity Fair magazine with Leonardo DiCaprio

— He has made more than £7 million for the zoo.