Before World War II, Berlin's Potsdamer Platz was the center of the city, packed with department stores and restaurants. Destroyed in the war, and left high and dry between East and West Berlin during the Cold War, hopes were high after the fall of the Berlin Wall that the square could regain its old prominence. The city launched a massive rebuilding project and star architects created a whole new city quarter which it was hoped would bring back a bit of the old glitz.
But now, in a measure of the extent to which the project has failed to meet expectations, almost the entire complex is up for sale. Both DaimlerChrysler, which owns 17 buildings on the south side of the complex, and Sony, which owns the iconic Sony Center on the north side, are reportedly taking offers.
The Financial Times Deutschland, quoting industry sources, reported in its Tuesday edition that Daimler has given the investment bank Merrill Lynch and the real estate consultancy Angermann the task of looking for a buyer for its Potsdamer Platz complex. Analysts estimate the market value of the Daimler complex, which consists of 17 buildings built between 1994 and 1998, at around €1.5 billion ($2.1 billion) -- significantly less than the €2 billion it cost to build.
The paper also reported that Japanese firm Sony has put its Sony Center, which is across the street from the Daimler complex, on the market. The Frankfurt investment bank Drueker is responsible for managing the sale, and analysts estimate the asking price at €600-700 million ($850-990 million).
The Sony Center, one of Berlin's best-known landmarks, was designed by the architect Helmut Jahn and was completed in 2000. It houses the headquarters of the German rail company Deutsche Bahn, as well as luxury apartments, restaurants and cinemas.
"Daimler and Sony have admittedly missed the best moment for selling," an industry insider told the newspaper Monday. "Investors can no longer finance big deals so cheaply, as a result of the credit crunch, and so they're not offering such high prices as they were just a few months ago." However the prestigious location is bound to attract investors, the source said.
Spokeswomen for both Daimler and Sony declined to comment on the sale plans when approached by the FTD. "The buildings at Potsdamer Platz were designated as non-essential in 2006," the Daimler spokeswoman told the paper. "Until now there have been no further developments and a decision has not been made."
International investors have developed a keen interest in the Berlin real estate market in recent years, attracted by property prices well below those in other European capitals. Although Potsdamer Platz is one of Berlin's main tourist attractions, the development has been criticized for being over-commercialized and lacking character.