"Network and trust."
Real estate. If an auction house operates real estate agencies, there is probably a very special idea behind it. Michael Reiss is managing partner of Sotheby's International Realty in Munich. He describes his vision and current real estate trends.
"We have currently sold a property in Munich's city centre - almost 500 square metres, an old building from the Gründerzeit period, high ceilings, elegance. For our customer we were able to achieve a price per square metre of almost 25000 euros. And at the gates of Munich in the Kitzbüheler Alps, our latest project - Six Senses Residences Kitzbuehel Alps - is being developed. On sale are luxury alpine apartments & chalets with full use of the six-star resort. This is an exciting time," smiles Michael Reiss.
Sotheby's has been a big name in the auction business since 1744. And those who sell art, vintage cars or jewellery inevitably build up a network of wealthy customers. "It was only logical to add a real estate division to this. Clients often know each other as well," says Reiss, who set up this division in Munich in 2016 and serves clients throughout the Bavarian foothills of the Alps. "These personal contacts are the key. Because they help us to recognize what the market participants really want."
German and European buyers, for example, usually look for living space between 100 and 250 square meters. Both size and location depend on their phase of life. "Older people often separate from their large villa in the bacon belt and look for a penthouse apartment in the city centre. Wealthy young families, on the other hand, are drawn to the green, but close surrounding countryside. Through our network, we can bring buyers and sellers together around the world."
The location has always been the decisive criterion for real estate buyers. It stays that way. However, the demands on the equipment have changed. "Smart Home, the networked communication of technical devices is a big topic, multi-media integration, home cinema and a lot of attention to detail. This can be a waterfall in the wellness spa area or a glass elevator," explains Reiss.
However, the trend towards much cool steel in the kitchen is over. "Now warmth and comfort count, which is reflected in bronze-copper tones and Art Deco style. Hygge is what the Scandinavians call, cocooning is what the Americans call. We call it living in harmony with consciousness."
This holistic feeling of well-being also includes the topic of sustainability. "This is new, but a trend that is clearly intensifying. Heat recovery is therefore the technology that is currently most in focus."
The sellers, Reiss knows, naturally want to achieve a reasonable price. "But for many, the sales process is also about discretion. You don't want to test the market in the first place, but want to find a buyer directly through our network. And they trust us to know the value of their property."
There are also sellers who deliberately forego the maximum yield. "Although Arab and Russian buyers pay the highest prices," Reiss explains. "But since they do not live permanently in their properties, entire streets are almost uninhabited - in Munich, for example, this is the case in the Lenbach Gardens. However, some sellers want their property to be lively. Deshalb they renounce in return on top yields."
All this must be balanced sensitively. The prices then attainable are currently very stable. "I don't see no real estate bubble. Demand remains strong. Family offices, entrepreneurs, foreign returnees and foreign investors are looking for real value and asset preservation in a safe place. At the same time, the supply is limited. These are very good framework data for a healthy market." ®
Munich | Sotheby's International Realty Michael Reiss; 49 (89) 744 241 890