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Why There’s No Room for Startups in Berlin
Office space is in dangerously short supply for attractive startup cities like Berlin, which can’t seem to get out of its own way
When Germany split after World War II, industry fled the capital city, settling into more stable locations in the West. But after the Berlin Wall came down 30 years ago, industry never returned. The automobile, engineering, and banking powerhouses that turned the German economy around remained in Munich, Düsseldorf, and Frankfurt. Berlin’s salaries remain below the national average to this day.
But tech is finally an industry where Berlin is winning. Of the €2.7 billion ($3 billion) in venture capital flowing to German startups in the first half of 2019, €2 billion ($2.2 billion) went to Berlin-based companies.
“We need tech companies in Germany; we need tech companies in Berlin,” says Andreas Streim of Bitkom. In a survey, the digital association found that 64% of the startups in Berlin report having a hard time finding new office space due to rising rents.
If you want to attract tech talent, few cities sell themselves as easily as Berlin. At the same time, the city can’t seem to get out of its own way. Office vacancies are hovering around just 2% — one of the tightest markets in…
