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Chinese investors seize on cheap Berlin properties

Investors 'unaware' that tough tenancy laws limit potential for rental growth

These luxury apartments under construction at the KU136 Kurfuersten Strasse Berlin building are being marketed in Beijing and Shanghai. (Photo by Jens Kastner)

BERLIN -- To Berliners, Kurfuersten Strasse, in the district of Schoeneberg, is synonymous with prostitution and the drugs trade. But to Premium Finance Group, a Chinese wealth management company selling 127 apartments in the KU136 Kurfuersten Strasse Berlin project, the area is "very desirable for those with families due to the excellent local facilities."

Shanghai- and Beijing-based Premium Finance Group is one of a number of Chinese wealth management companies that hold regular launch events in China to sell flats in Berlin, helping to make the German capital a growing target for Chinese property investment. On its website, the company claims that Berlin property prices and residential rents have seen annual increases of 10-13% and 8-10% respectively in recent years, and that investors can access the market for just 50,000 euros ($59,540).

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