Der Metropol - a Real Estate Magazine by Zabel Property, Buyers from China

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A REAL ESTATE MAGAZINE BY zabel Property AG

China Goes Berlin

What Brings Chinese Buyers to Germany‘s Capital City?

Country Snapshot China

China‘s Super-Rich are Coming

The Power of Eight

The number of Chinese investors seeking to invest in European markets has been soaring

In our interview, real estate expert Jie Li explains what brings Chinese investors to Berlin

Numerology plays a key role in China. Particularly valued is the number “eight”

der metropol Open, Cosmopolitan, Colourful: Berlin has been developing into a hot spot for property buyers from all over the world. With its new publication “der metropol,�

Zabel Property offers a print magazine rich in content focused on a key topic of our times: foreign investors in Berlin. Published quarterly in a print run of 10,000 copies, the magazine is offered free of charge.

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Editorial

Dear Reader, more and more Chinese investors are taking an interest in Berlin’s real estate. One reason being, Berlin has developed the reputation abroad of being an extremely trendy city. In addition, there is a growing number of affluent Chinese who are charmed by the German capital, and demand for exclusive residential property – be it for owner-occupancy or as buy-to-let investment – is growing as a result. According to the dollar-based World Wealth Report from the Royal Bank of Canada, the number of German millionaires increased by barely 0.9 percent. The Asian-Pacific region, by contrast, saw the steepest increase in high-net-worth individuals (HNWI) at around nine percent. Winning foreign HNWI as clients would therefore be a great way to ensure that Berlin’s market for exclusive residential real estate keeps growing. One of the reasons explaining the keen interest among Chinese investors in foreign assets, is that you cannot own real property in China. You may only acquire a 70year right of residence. This makes foreign real estate markets highly attractive to Chinese investors because it is their only chance to own property outright. Berlin, one of the most affordable metropolises in Europe, is particularly well qualified as an alternative real estate investment destination. The high-priced segment of Berlin’s real estate market still offers plenty of potential. For the city has yet to offer the high-end kind of service that the super-rich – whether they hail from China or elsewhere – are accustomed to in terms of private wealth consultancy, and what they expect when buying property. So far, Germany’s capital city has hardly met the high expectations vested in this kind of service. In order to find the right client approach, internationally active property sales companies must have excellent intercultural competencies to be able to handle the different mentalities of particularly affluent clients. It is the only way to open up Berlin’s property market for this type of clientèle. We would like to help accomplish this, with this issue of “der metropol.”

Thomas Zabel has been the CEO of Zabel Property AG since 1993. Internationally positioned, his team takes care of affluent foreign clients by meeting their elevated standards in service and quality of living. The company transacts 70 percent of its property sales with foreign clients.

Enjoy your reading!

Yours, Thomas Zabel

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INDEX

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Chinese investors love buying property in Berlin. But who are China’s super-rich, and why do they love to invest abroad?

What makes Berlin attractive, and what do Chinese property buyers watch out for? An interview with Jie Li, Property Consultant.

Land of Billionaires

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Interview

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One to One

From a Guided Tour to Your Dream Property

Sihua Tang, client of Zabel Property, talks about the things that fascinate her about the German capital and her property-buying experience.

Clients of Zabel Property benefit from special end-to-end services. An example itinerary of a two-day tour of Berlin for Chinese visitors.

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INDEX

CHINA

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The Power of Eight

Mitte – the Heart of Berlin

Numerology and “unlucky floors”: How superstition governs the shopping behaviour of many Chinese buyers.

Amazing architecture and rich cultural diversity: Mitte is the trendiest district in the metropolitan Berlin.

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Striking the right note can be everything in business. This tutorial briefs you on the “dos & don’ts” when dealing with Chinese clients.

Zabel Property has familiarised itself with the preferences of Chinese clients through regular attendance of relevant events and frequent trips to China.

Chinese Etiquette

Zabel in China

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China – a Land of Superlatives Mainland China has a population of 1.36 billion, of which more than half live in mega-cities of more than 20 million residents, like Beijing and Shanghai. The top one percent of this urban population, owns more than one third of all assets in this Communist country.

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28,8 €

2012

36,5 €

47,3 € During the past three years, private assets in the Asia-Pacific region (not including Japan, measured in trillions) grew considerably.

2013

2014

Source: The Boston Consulting Group

Country Snapshot

Land of Billionaires The number of high-net-worth Chinese seeking to buy luxurious condos in Berlin is rising. Who are these super-rich individuals, and why do they love to invest abroad?

There are 596 dollar billionaires in China today. For the first time, their number exceeds that of US billionaires. This is the upshot of the latest Hurun Report, the China rich list.

Year on year, their number has almost doubled. A total of 1,877 Chinese own at least two billion Yuan (c. 290 million euros) – an increase by one third since 2014.

And this even though the stock market crash in June of this year wiped out 40 percent of the equity values, and withstanding the Chinese economy losing momentum. With the domestic economy stagnating, wealthy Chinese prefer to invest overseas. According to a report compiled by the estate agency Lio Global, roughly 91,000 wealthy Chinese actually applied for dual citizenship in other countries between 2000 and 2014.

Foreign Investments Getting Easier The eagerness of Chinese citizens to invest in international markets has prompted the Chinese Government to ease restrictions on foreign investments. Since 2013, investments of less than one million US dollars no longer require government approval.

Investors are mainly attracted to US, Australian, and Canadian market, however a significant number of investors also invest in Hong Kong, Shanghai and the United Kingdom.

Only recently have they become aware of the German market. Word is beginning to get around how affordable the German real estate market is compared to other countries. In addition, Germany is considered a politically stable country – this being a criterion

that counts for Chinese investors.

Last year, they committed 2.3 billion euros on Germany’s commercial real estate market, up from just over 700 million euros in 2013. The residential property market is also extremely interesting to them, because their domestic market is overheating, with prices skyrocketing but yields and rents plunging. Moreover, it is impossible to own real property outright – leaving you the option to acquire a right of residence for 70 years, which is comparable to hereditary tenancy in Europe. By contrast, nothing keeps the Chinese from acquiring real property in Germany. Wealthy parents love buying apartments for their children who wish to study in Berlin.

The single wealthiest man in China is property giant Wang Jianlin, founder of the Wanda conglomerate. He operates cinemas, shopping malls, luxury hotels world wide, and among other things, owns a fifth of the Spanish football club, Athletico Madrid. His fortune is estimated at 29.9 billion euros. Last year, Jack Ma had the number one spot. The reason for his decline is that his e-commerce platform, Alibaba, lost significant value after going public. Today, he has an estimated fortune of 22 billion US dollars, down from 25 billion dollars the previous year.

Most of China’s super-rich came into money only during the past two decades. They tend to have risen from humble origins, making it into the top tier through hard work and good relations. A case in point would be Li Shufu, an ordinary man from the countryside who in 1999 founded a company to make affordable cars,

and was so vastly successful that he took over the majority of Volvo’s stock in 2010. China’s HNWIs are 38 years old on average, and seven out of ten are men. Private entrepreneurs in China got a break in 1989 when the government reformed its economic policy. Production costs were low, while domestic market demand was high and competition negligible.

Surge in Prosperity in China Purchasing power in China, rather than being boosted by millionaires and billionaires alone, is rising apace with the broad-based expansion of the middle class: Today, around 350 million, out of the population total of 1.38 billion, belong in this category, according to findings released by the Chinese Academy of Social Sciences (CASS). Households with an annual income between 8,500 and 71,000 US dollars qualify for this category. This means that China’s middle class grew by 14 percent year on year. The gross domestic product per capita, meaning the total value of all goods and services manufactured and consumed in the country, is growing steadily. The figure projected by the statistics portal Statista for 2015 is 8,280 US dollars per capita. This is up from 7,570 US dollars the previous year, and up from just 1,735 US dollars in 2005. The Middle Kingdom is thus home to an extremely solvent social stratum that keeps expanding. Germany stands to benefit from the fact that the boom of China’s domestic economy is slowing because wealthy Chinese prefer to keep their money safe abroad. It is an opportunity that should not be missed.

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“Chinese people expect first-class service.�

Jie Li, a Chinese national, is in charge of the Business Development China division of Zabel Property, and acts as property consultant for Chinese clients. She has been with the company for the past four years, and is perfectly familiar with the preferences of Chinese clients.

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Interview

China’s Super-Rich are Coming Property consultant Jie Li explains why Chinese investors love to do business in Berlin, and talks about how important superior service is for this high-net-worth clientèle.

China’s super-rich have increasingly flocked abroad lately to invest in real estate. Why is that?

There are various reasons to explain this. For one thing, real estate is a highly popular asset class among Chinese because it offers the security of tangible assets. For some years now, it has been unlawful for Chinese to buy more than one property in major cities such as Beijing and Shanghai, which has made overseas investments the only viable alternative for many. This is particularly true whenever a certain share of the wealth is to be invested in real estate. This makes it an obvious growth driver.

Does Berlin play a special role as an investment destination, or do Chinese buyers favour other European cities?

Berlin is quite popular. The fact that the German capital, of all places, is so often chosen is explained by its low prices when compared to other countries. Moreover, Chinese buyers prefer downtown locations above all.

In Berlin, you will still find affordable offers in this segment, unlike in many other metropolises worldwide – including the Chinese capital. The net rent multiplier quoted in downtown Beijing is 36, whereas assets in Berlin are still selling at 23 times the annual net rent. It implies initial yield rates of four to five percent. Since Chinese investors generally aim for high rates of return, this is another perk of residential real estate in Berlin.

Which other buying criteria come into play?

Another key aspect for the Chinese leads, is the lettability of their condominiums. Berlin meets this requirement more than many other cities.

Since the share of tenants is higher here than in most other metropolises, the demand potential for rental flats is greater, too. Better yet, the supply of apartments in the luxury segment continues to lag behind in Berlin, creating excellent conditions for this sort of investments in the city. You need to know that Chinese buyers are interested exclusively in newly completed buildings. Buying vintage property is out of the question for them. Another key argument in favour of investing in the German market is Germany’s reputation as an economically and politically stable country. This contrasts starkly with the way China itself is perceived, and Chinese investors consider it a very reassuring and attractive aspect.

But Berlin surely has its drawbacks, too, compared to destinations like New York City or London?

Of course it does. Notwithstanding the notable perks of Berlin’s residential real estate, luxury properties in the German capital are not an automatic sell. Many leads return to their home countries frustrated, regardless of nationality. In most cases, the reason is poor service. While top-notch services are the rule in New York City or

The apartments available in Berlin’s luxury segment easily qualify for an investment.

London, they tend to be the exception in Berlin. So while Berlin may well be playing in the premier league in terms of the residential property’s appeal, the available services are on a county league level. For this discriminating clientèle, however, bad service is a knock-out criterion. After all, we are talking about highly educated and very wealthy cosmopolites who are accustomed to the highest service standards, and used to getting exclusive service. Of course, this does not just go for Chinese clients.

What strikes Chinese visitors as odd when coming to Berlin for the first time?

The empty streets! Of course, this is a tongue-in-cheek observation, but compared to the crowded streetscape of Chinese cities, Berlin strikes many Chinese as pleasantly quiet and non-crowded. The Chinese also love the sense of order they observe in Germany, whether it be road traffic or the high-level consistency of the law in purchase transactions.

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CULTURE

The Power of Eight Numerology plays an enormous role in China – particularly when it comes to purchase decisions. It is something you should bear in mind if you wish to do business with Chinese buyers.

A certain degree of superstition is part of every-day life in China: Long noodles symbolise long life, and if you are lucky enough to be born in the Chinese year of the dragon you are destined for wealth and power, according to ancient belief. But the symbolic significance of numbers is probably one of the most powerful superstitions of all. Similar to the way people here in the West consider the number “13” to be a bad omen, there are lucky and unlucky numbers in China.

Chinese – a Language like No Other To understand this, we need to look at some of the basics. The fascination with numerology is rooted in the specificities of the Chinese language. The pronunciation of Chinese characters, which include figures, generally consists of just one syllable. Yet there are only around 400 syllables in Chinese.

It is true that you can pronounce each syllable in four different pitches to vary the meaning of the spoken word. But all things considered, the number of possible phonemes for Chinese words and figures is rather limited. This explains why spoken words can have various meanings. More often than not, you need the context of the whole sentence to determine the meaning of a given word. The semantic ambiguity is so great that in many cases the meaning of these “terminological doubles” is associated with figures that sound the same.

The positive meaning of the number “eight” (“ba”), for instance, is based

on its phonetic similarity to the word “fa”, whose original meaning of luck, wealth or “lead the way.” The name of the Chinese e-commerce vendor Alibaba, for example, contains the term “ba” twice, and the company’s IPO in the US was scheduled for the 08/08/2014. The Olympic Games in Beijing kicked off on 08/08/2008 at 08:08 AM sharp. Internet addresses, flight numbers, and street names in China are positively bristling with eights. And the best time to sign a contract in China is on the eighth of a given month at eight o’clock.

The faith in the number “eight” is so deep set that many Chinese are willing to pay good money to have an eight in their apartment number, their cell phone number or their license plate.

Here is a rule of thumb: The more frequent the lucky number eight appears in or on a given asset, the more money Chinese are willing to pay for it. Another number the Chinese consider a good omen is “six” (“liù”) – it calls to mind a Chinese proverb about a smooth and harmonious life. The number “nine” (“ji”) promises a long life because it sounds like the Chinese word for “eternity.” The figure is therefore particularly popular with wedding couples who love to exchange their marriage vows on 09/09.

Also highly coveted are number combinations that read like phrases. One man, for instance, paid the tidy sum of 900,000 euros to get the cell phone number 135 85 85 85 85 because the sequence, when read out, sounds

like: “Let me be rich, be rich, be rich, be rich.” The Bank of Communications bore this in mind when making its initial public offering at the Hong Kong stock exchange in 2005. It acquired the securities number 3328, which in Cantonese reads “getting rich the easy way.”

The figure “nine” connotes eternity, which is why the Chinese get married on the 9th of September by the tens of thousands.

The Cursed Number Four Bad things are believed to happen to those who get in touch with the number “four” (“sì”). It sounds similar to the Chinese word for “death” (“si”).

Whenever possible, Chinese steer clear of the number four: Many buildings in China skip apartment numbers that contain a “4” and fourth floors altogether. Sometimes the consequence of leaving out unlucky floors is that buildings with 30 numbered floors actually only have 27 physical storeys because the floors 4, 14 and 24 were simply omitted. By the same rationale, it is easy to figure out where the priciest apartments are located.

Just check the eighth floor.

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The Prettiest Place in Berlin The impressive Gendarmenmarkt square in the district of Mitte is considered “Berlin’s most beautiful square.”

Its centre is occupied by the Schauspielhaus venue, flanked by the Deutscher Dom on the south side and by the Französischer Dom on the north side. The square was named in commemoration of the mews of the “Gens d’armes” heavy cavalry regiment. Today, Gendarmenmarkt is not just a culinary but also a cultural hot spot.

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Impressions

Mitte – the Heart of Berlin Berlin-Mitte is a melting pot for history, culture and architecture.

Exclusive shops, numerous sights, and attractive properties for sale, draw Chinese visitors to this part of downtown Berlin.

Left: concert hall on Gendarmenmarkt, top: Zabel “Finest Homes” at Gendarmenmarkt

The district of Mitte offers Chinese guests an expansive bouquet of stimuli. Shop fronts are stocked with luxury goods, cultural venues including renowned theatres and museums are just around the corner, the entire area is dotted with restaurants, and the eclectic blend of architectural styles reflects the rich history not just of the district but of the entire republic.

Berlin-Mitte extends over 10.7 square kilometres and is home to about 86,000 residents. The city district is an amalgam of cultural, historical, and political hot spots,such as Checkpoint Charlie, Reichstag, Potsdamer Platz, and the Berliner Ensemble. The number of people moving to Berlin has been increasing year after year, and the inner city has proven particularly popular among them. As a result, the residential vacancy rate in Mitte is below two percent. This means that it is no trouble at all to let apartments in this area. More than by any other style, the cityscape of Berlin is defined

by the architecture of Prussian classicism. Gendarmenmarkt, Museumsinsel, and Pariser Platz are executed in this architectural style, which adds a Mediterranean touch to the city. Many high-end restaurants have opened up in the vicinity of these vintage locations, serving anything from Cantonese to French and Spanish and all the way to classic German cuisine, reflecting the world in a culinary microcosm. Luxury brands fancy the frontage along Friedrichstrasse, Gendarmenmarkt, Hackescher Markt, and side streets for their outlets or flagship stores.

“Finest Homes” at Gendarmenmarkt It is precisely here at Gendarmenmarkt that Zabel Property opened the shop “Finest Homes”.Its interior was inspired by similar show rooms in the US. Looking out from the inside, you view the Konzerthaus concert hall, flanked by the Französischer Dom

and the Deutscher Dom. Passersby like to stop in front of the illuminated shop fronts and to study the displays appealingly presented in the windows. Inside, visitors are welcome to find out more via large-screen presentations of high-spec properties from the company’s portfolio and their fitout features. The shop is furnished in tasteful, carefully coordinated designer pieces to create an ambience of well-being for its exclusive clientèle.

The interior decoration by Zabel Property is inspired by shop designs of the world’s leading estate agencies, combining their best ideas with the company’s own taste and standard, and thus creating a shop design that hasn’t before been seen in Germany up to this date. As it were, Zabel Property chose a striking location for setting up a professional flagship store of a type that had been lacking in Germany’s capital city.

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Impressions

Classic Residential Quarter in BerlinMitte If you cross to the north bank of the River Spree and walk through one of the classic residential areas of Berlin, you will find streets lined with typical period buildings dating back to the second half of the nineteenth century.

Front buildings with stucco façades and labyrinthine backyard architecture define the residential neighbourhoods of Berlin-Mitte. Unlike other nationals, however, Chinese buyers are immune to the charms of period buildings. What they have in mind when shopping for real estate are recently completed units.

Left: visualised exterior aspect of High park, right: Potsdamer Platz

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“High Park” on Potsdamer Platz With its clear lines and modern-structure façades, the “High Park” tower block project contrasts handsomely with the Belle Époque buildings. The balconies of these exclusive apartments command a sweeping view over the city’s history-steeped architecture.

This is the kind of ambience where clients from the Far East feel right at home. As it is, 70 buyers from 27 different countries have already secured exclusive units at High Park, including a large number of Chinese investors. The 49 metre-tall building will be built on the last available plot on Potsdamer Platz, and is to be completed

Impressions

by the end of 2017. From the panorama terraces of the 13th-storey building, residents will have a breathtaking view across the city skyline. Two towers and a transverse building will accommodate 165 condominiums, 38 boarding apartments, and 9 retail units. A concierge on the ground floor will watch over everything. A high-end design service will be available for all apartments. The building will span the U2 underground line right next to the “Mendelssohn-Bartholdy-Park” station. Residents of the building will benefit from being perfectly connected to the public transport.

From Brandenburg Gate to the Reichstag It is just a short walk from this location to the city’s main landmark, Brandenburg Gate, which dates back to the classicist period. It was built between 1788 and 1791 by the order of Prussian King Frederick William II, and is considered a national icon reflecting the eventful history of Germany. It served as backdrop for a number of historic events: The ascent of National Socialism to power, the division of Germany during the Cold War, and the nation’s reunification.

In the direct vicinity of Brandenburg Gate, lies the seat of the German parliament, the Reichstag. With its glass dome by Sir Norman Foster, it is one of the architectonic highlights of the city, and a popular sight frequented by tourists both domestic and foreign.

The cluster of time-honoured museums on the river island is called the Museumsinsel, famous museums such as the Pergamonmuseum and the Alte Nationalgalerie, lie within easy reach. Home to the well-known bust of Nefertiti, impressionist paintings and Renaissance sculptures, the ensemble could keep art buffs busy for days. Across from the museum island, on Kupfergraben, is the private residence of Chancellor Merkel, by the way.

The Nikolai Quarter The neighbourhood called Nikolaiviertel is the oldest part of Berlin.

Strolling through its narrow streets will transport you back to the Middle Ages. Houses and streets are grouped around Nikolaikirche, a church built in the thirteenth century. Except for this picturesque quarter, few vestiges remain from the city’s medieval beginnings.

Three Retail Destinations in Berlin-Mitte Kavier Gauche

The shop front of Kaviar Gauche draws female eyes like a magnet.

Here, at its flagship store, the Berlin-based fashion label sells truly splendid bridal couture, must-have bags, and feminine prêt-à-porter collections.

Linienstraße 44, 10119 Berlin

Galeries Lafayette

The Berlin outpost of this Paris-based fashion department store presents international premium and luxury brands, beauty products, and fancy French foods on five floors.

Friedrichstraße 76/78, 10117 Berlin

Bang & Olufsen

T he Danish electronics vendor presents high-end audio systems, music players, speakers, and TV sets in timelessly minimalist design in their brand store on Gendarmenmarkt.

Charlottenstraße 62, 10117 Berlin

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Impressions

Riverside Embassies along Märkisches Ufer Nearby lies the embassies of Australia, Brazil, Turkey, Cyprus, and China in a cluster resembling a small diplomatic quarter that benefits from the charm of Mitte and the district’s centrality. The diplomats who work here occupy handsome offices and buildings that are within walking distance of the German Foreign Office. The fact that security is tight around the embassies does not impair life in the buildings and or the neighbourhood.

The Chinese embassy was originally built as a hotel and convention centre

In the heart of Nikolaiviertel

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of the East Germany’s trade union umbrella organisation FDGB, and redeveloped after Germany’s reunification. The small diplomatic quarter has an up-market international touch without the urban hustle and bustle that defines other downtown districts.

In a sense, it has a village feel to it, created by Köllnischer Park, with listed parklands of roughly one hectare that date back to the 18th and 19th century. The ground and surrounding areas feature a number of historic edifices from past centuries.

Impressions

Metropol Park One of these historic building is the impressive Metropol Park on Rungestrasse, a listed red-brick complex.

Originally a health insurance building designed by architect Albert Gottheiner, the expressionist 1930s architecture is now complemented by progressive new residential buildings with ceilings up to six metres high.

Currently undergoing conversion from a workplace into exclusive lofts, suites and penthouses, the complex will be ready for occupation in early 2017.

The incoming residents of Metropol Park will have a great view of the park

and the city skyline from their patios.

Tranquil sanctuaries of this type are becoming increasingly hard to find in Berlin. Also located on Rungestrasse is the bear pen that has housed several generations of the city’s heraldic beast since 1939. On the northern edge of KÜllnischer Park, facing the river, you will find the building of Märkisches Museum. Raised in 1908 in the historical style of imperial Germany, the ensemble of buildings reference architectural precursors from northern Germany and the state of Brandenburg.

Entrance area of Metropol Park

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“Berlin is more open and generally more liberal than China” Sihua Tang, one of Zabel Property’s clients, has been living in Berlin for a year. The 19-year-old Chinese expat moved here without her parents in order to enrol in a degree program. She found suitable flat at “The Mile,” a centrally located residential complex.

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ONE TO ONE

A Lunchtime Meeting with Sihua Tang A Chinese national, Sihua Tang told us over lunch what fascinates her about the Germany’s capital city, and about her property buying experience.

Zabel: Sihua Tang, your native country is China. How long have you lived in Berlin, and what brought you here?

Sihua Tang: Back in China, I used to live downtown, and went to a boarding school. I studied several foreign languages, my major being German.

In order to deepen that focus, I decided to go to Germany after boarding school to get my A levels here. So I moved to Potsdam in 2012. The close proximity to Berlin made it possible for me to spend my weekends here.

What thrilled me about the German capital was its international and cosmopolitan flair. It did not take me long to realise that this is where I wanted to live. So I made up my mind to enroll in a degree program in business mathematics in Berlin.

Zabel: Do you remember your first impression of Berlin?

Sihua Tang: Oh yes, I do (laughs).

When I landed in Tegel, I thought this is the smallest airport I have ever seen.

In China, I had seen nothing but large airports. So when the plane landed I thought I had arrived in a small town.

Zabel: Your family lives in China. And yet you have remained anchored in Berlin. What is special about the city?

Sihua Tang: I grew up in a very busy family. My parents travelled a lot even when I was a child. This and my time at boarding school taught me early on to get by on my own. Compared to China, Berlin is more open and generally more liberal. It took me no time at all to get acquainted with a number of people whom I keep seeing to this day. I love the diversity of the city and the relatively short distances.

Zabel: Going to school can be quite demanding. At the same time, Berlin is full of distractions. What is your favourite thing to do on a night out?

Sihua Tang: Perhaps it’s a Chinese thing, but I like tall structures. Berlin has all sorts of places that command a spectacular view. I love spending summer evenings in one of the rooftop bars. The bar at the Soho and the Deck 5 in Mitte are always packed, and they serve great drinks. Another rooftop place I like to go to after a shopping spree in Charlottenburg is the Monkeybar which overlooks the zoo. Then you have all kind of nightlife venues on Potsdamer Platz. The Van Gogh Bar is a good place for a cocktail over classical music after catching a movie.

Zabel: We are here at the “China City” restaurant. Would you like to tell us which other restaurants you fancy?

Sihua Tang: I love eating Chinese or Japanese food. On Kantstrasse, which is a bit like Berlin’s China town, I feel very close to home. You get fine original Cantonese cuisine at the “Aroma” or the “Good Friends.” A great place for Japanese food is the “Hashi” restaurant on Hackescher Markt. At the Hashi, you share tapas on round tables. They also have excellent cocktails. My favourite place for some rich German fare is the “1840” with its rustic atmosphere.

Zabel: You bought a condominium at “The Mile” in a deal brokered by Zabel Property. How was your experience during the brokerage process?

business mathematics I started hunting for an apartment in Mitte. Since homeownership in Berlin is cheaper in the long run than renting, my mother and I decided to seek the advice of a property expert. I found Zabel Property on Wiebo, the Chinese version of Twitter. After I had filled in the contact form, Jie Li called me the very next day and we scheduled an appointment at her office on Friedrichstrasse.

Jie Li drew up a list of suitable properties, and took all of my requirements into account. Zabel was not the only estate agency I talked to, but they ultimately struck me as the best bet.

Zabel: What kind of service performance do you expect from real estate sellers, and what do you feel they should bear in mind when dealing with Chinese buyers?

Sihua Tang: What matters a lot to me is to be on good terms with the estate agent. Things like excellent service and tenacity are instrumental in accomplishing this. Chinese clients require a lot of patience. We never rush our decisions. Jie Li chose the perfect property for me – including in a value-for-money sense – when picking “The Mile.”

Zabel: So you would recommend Zabel Property to close friends and relatives?

Sihua Tang: Absolutely. In fact, I already recommended them to someone. A girlfriend from China was also interested in a condo at “The Mile.”

It would make me very happy to have her as my neighbour.

Sihua Tang: As soon as I had been admitted for my degree program in

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CULTURE

From a Guided Tour to Your Dream Property Clients of Zabel Property benefit from end-to-end care that starts well before they even arrive in Berlin. In addition to being shown suitable properties, they are given a tour of the city. Two day sample itinerary with Chinese leads.

Day 1

Day 2

08:00 CET: Jie Li, property consultant from Zabel Property and a Chinese national, picks up her Chinese clients at the airport. The chauffeur-driven car is already waiting outside.

Jie Li knows: Her clients love modern hotel chains, so she booked rooms at the NH Hotel in Berlin-Mitte for them.

09:00 CET: When her clients step out of the hotel, Jie Li is already waiting for them in the chauffeured car. The group proceeds to Chausseestrasse to view apartments at the “Living 108” complex. The real estate expert is well aware that “eight” is a lucky number in China, and indeed her clients duly take note of the fact that the number is part of the address. The estate agent competently guides her clients through the rooms and answers the questions of her prospects in detail.

09:00 CET: After her clients have freshened up at the hotel, she takes them on a tour of the city. They tick off classic sights like the Brandenburg Gate, the East-Side-Gallery, the Reichstag, and Alexanderplatz. There is time for a group shot in front of the TV tower before lunch.

12:00 noon: Her clients feel right at home at the China City restaurant in Berlin-Mitte. The patrons are almost exclusively Chinese during lunch hour. They sit close together at round tables, chop sticks lifting duck feet, pig skin or century eggs from small bowls, and smile when drinking to each others health.

14:00 CET: As tourists from outside the European Union, Chinese are exempt form value added tax when shopping in Germany. The shop fronts of the KaDeWe department store display the wares of luxury brands. In the kitchen department, where Fissler and Zwilling cookware is being presented that day, the sales staff actually speak Mandarin. After two hours, the party proceeds down Kurfürstendamm, stopping in several luxury stores, before moving on to Kantstrasse for dinner.

18:00 CET: Jie Li takes her clients to the Chinese restaurant Good Friends. The items on the menu are quite familiar to her guests. Over barbecued duck and squid chop suey, Jie Li elaborates on the perks of Berlin’s real estate market and answers the various questions her guests ask her in regard to German traditions.

21:00 CET: At the end of a lovely evening, the chauffeur takes the group back to the hotel. Jie Li leaves her guests to spend the rest of the evening as they please.

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12:00 noon: Over lunch at a traditional German restaurant, one of the clients signals that he is interested in the apartments. He would like to buy a condominium in the building that was just shown. While tending to his veal roll, he begins to discuss the purchase procedure details with Jie Li. 14:00 CET: The group also shows interest in the “High Park” project. Jie Li explains the project highlights in depth, also touching upon the superior, coveted location so close to Potsdamer Platz. A couple looking to buy an apartment for their daughter, who will study for a degree in Berlin, are seriously interested.

16:00 CET: Financing and legal experts at the office of Zabel Property answer questions the clients raise in regard to the purchase process and to non-immigrant visa regulations in Germany. One gentleman wishes to retain legal counsel for the registration appointment because he will not be in Berlin at the time. He goes on to inquire whether the estate agency could take care of letting the apartment. The estate agent assures him that this won’t be a problem at all.

18:00 CET: The day winds up for the group with a final joint dinner at the Borchardt restaurant. With choice wines filling their glasses, Ji Lie and her clients toast good business relations, and before she parts, she tells her guests just where to go for the best nightcap. The next day, she sends the car again to take her clients back to the airport for their journey home.

CULTURE

Chinese Etiquette

Gestures

Greeting Visitors

Behaviour considered impolite: It does not always take a wrong word choice to breach protocol. A non-verbal faux pas often suffices to ruin your chances to make a good impression. For example, the German hand signal for “two” signifies “eight” in China, and this can cause quite a bit of confusion when ordering at a restaurant. It is never a good idea to point at a person with just one finger. Rather, you should point with your entire palm. Also, there is principally nothing wrong with beckoning someone. But the palm should face down, not up the way Westerners are used to.

Remember to bring your business card: Even the way you exchange greetings during your first meeting with someone can be fraught with hazards. Luckily, observing a basic code of conduct will keep you from pushing any buttons: The first encounter with a Chinese business partner should always commence with a bow. Start by greeting the highest ranking person and work your way down the seniority list, with men taking precedence over women. Limit yourself initially to the use of the last name, and be sure not to forget your business card. The latter is always offered using both hands.

Gifts

Physical Contact

The proper gift: Everybody loves getting presents. Here as everywhere else though, it is of the essence to plan carefully to pick a sensible gift. Presents wrapped in red, yellow or pink paper will always be welcome. These are colours connoting good cheer and a carefree joy of life. You cannot go wrong by giving chocolates, candy, company giveaways, and spirits from your home country. Fountain pens and ballpoint pens are also sure to win you sympathies. All types of clocks schould be avoided as gifts. Giving a clock is the big daddy of Chinese taboos.

Avoid getting physical: Close physical contact, such as hugs, a peck on the cheek or a pat on the back, does not go over well. The two guiding principles you should observe when dealing with Chinese is to show proper respect and to retain your composure at all times. Firm handshakes are another thing best avoided. They are considered boorish in China. Similarly, emotional outbursts of any sort are frowned upon. Even when frustrated, you should never raise your voice, but instead keep smiling and use a subtle register of facial expressions.

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CULTURE

Zabel and the Middle Kingdom Zabel Property very much appreciates its Chinese business partners.

Regular attendance of relevant events and frequent trips to China have helped Zabel Property to familiarise itself with the preferences of wealthy Chinese business people.

Seminar at the Hotel Adlon “China Goes Berlin” Thomas Zabel, CEO of Zabel Property, profiled the advantages of Berlin’s real estate market during a seminar called “China Goes Berlin” that Commerzbank hosted at the Hotel Adlon in Berlin last March. Berlin’s population of currently 3.4 million is growing at a rate of 40,000 new residents per year, while 121 new businesses are started in the city for every 10,000 residents, and 170,000 students are enrolled at the city’s four major universities. Other perks include stable economic growth and residential property prices that, while still rather low at the moment, will go up in the coming years. The demand for new apartments will keep rising, and since the German economy remains stable despite the Eurozone crisis, the country is a comparatively safe place to invest. In short, Berlin is exciting for Chinese investors, because it shows enormous potential.

That being said, it must be added that Chinese clients looking for a luxury property are demanding. They expect top-notch service, and this is something that few estate agencies have been able to deliver in the past. As a result, many prospective buyers return home in frustration, their money unspent.

Travelling to China Zabel Property has opened up a lucrative niche market here, and specialises in exclusive end-to-end service for Chinese clients today. To ensure that his clients get everything they need Thomas Zabel hired Jie Li, a Chinese

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Property consultant Jie Li with a lead at the “Luxury Property Showcase” in Beijing

national, as property consultant for Chinese clients. She regularly travels to China in order to identify new clients in the country’s metropolises.

Most recently, she attended the “Luxury Property Showcase” in Beijing to wet the appetite of Chinese leads for real estate in Berlin’s downtown district Mitte. It is the most important event for premium property in China.

This most recent convention attracted more than 5,000 high-net-worth individuals and investors. Zabel seizes opportunities like these trade fairs to expand its global network of sales partners.

Chinese investors buying property either to let or to owner-occupy are interested mainly in new completions and property developments. Refurbished period buildings are not eligible for

the Chinese clientèle. One of the reasons that makes Germany attractive to the Chinese is the option to enroll in a degree program for comparatively low tuition fees. Since Chinese do not like to rent, parents prefer to buy a place for their children, but always with an eye on how the property will appreciate. Indeed, buying condominiums for the next generation has become a popular practice in China.

Those who lost money during the stock market crash in June 2015 have turned to overseas investments to preserve their assets. This is where Berlin’s residential property market comes in with its affordable prices and steady appreciation. Well aware of the opportunity this situation presents, Zabel Property keeps expanding its contacts in Asia.

COMPANY SNAPSHOT

Zabel Property AG Zabel Property has specialised in the advisory to international clients concerning the acquisition of high-end condominiums in Berlin. Fluent in 12 languages, the team of Zabel Property is perfectly familiar with the issues and expectations of international property buyers, and will meet even the highest client standards. The company’s access to global networks of banks, non-bank financial intermediaries, attorneys and notaries public,ensures smooth property transactions for their clients- even when buying abroad.

THE WORLD IS INVESTING IN BERLIN The world’s investing in Berlin

russia

USA

6 %

14 %

Europe

52 %

Lebanon

Isr a el

3 %

Kuwait

3 %

4 %

China

8 %

saudi a r a bia

5 %

Legal Notice Zabel Property AG Unter den Linden 14, 10117 Berlin phone: +49 30 88 66 00-0, fax: +49 30 88 66 00-199 Trade registration at local court Charlottenburg HRB 169834 B | VAT: DE 235138710 CEO: Thomas Zabel email: info@zabel.com, internet: www.zabel.com

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Any commercial use of this periodical, which is protected by applicable copyrights, or any of its contents and illustrations, specifically through reproduction or dissemination, is unlawful and actionable except with the publisher’s prior written consent or unless regulated otherwise by the German Copyright Act.

Zabel Property AG Unter den Linden 14 | 10117 Berlin phone: +49 (0)30 88 66 00-0 | fax: +49 30 88 66 00-199 email: info@zabel.com | www.zabel.com