Capitalist Avenue? "Nein Danke!" say Karl Marx Allee tenants in Berlin

By Joachim Herrmann and Caroline Copley

BERLIN (Reuters) - Tenants are up in arms over the sale of apartments on the most prominent boulevard in old Communist East Germany to Berlin's largest property company, the latest in a wave of protests over skyrocketing rents in the German capital.

Deutsche Wohnen has bought 700 flats on Karl Marx Allee, a sweeping boulevard of monumental Stalinist architecture that was one of the flagship building projects of the former German Democratic Republic after World War Two.

Deutsche Wohnen owns around 110,000 flats in the Berlin area and has been the focus of much ire over rising rents. Tenant groups want to gather 170,000 signatures needed within four months to hold a referendum with the aim of expropriating Deutsche Wohnen's property.

The seven- to nine-storey apartment blocks flanking Karl Marx Allee, named after the German political philosopher who wrote "The Communist Manifesto" and "Das Kapital", were built between 1952 and 1960 in the socialist wedding-cake style.

Protesters against the sale have hung banners from one apartment silo reading "Kommerz Allee fuer 28 Million Verhoekert An Deutsche Wohnen" ("Capitalist Avenue - flogged to Deutsche Wohnen for 28 Million").

A spokeswoman for Deutsche Wohnen said the company planned to keep the apartments in its portfolio and that existing rental contracts would be valid.

For decades, residents enjoyed comparably cheap housing. But over the past decade, ultra-low interest rates, foreign investment and an influx of some 40,000 people to the capital each year have thrust up living costs.

Rents have more than doubled since 2008, according to a recent study by online housing portal immowelt.de. In April, some 10,000 people took to the streets of Berlin to protest about rising housing costs.

Last month Google shelved plans to convert a former electrical substation in the trendy Kreuzberg district into a campus following months of anti-gentrification protests.

Concern about a shortage of affordable housing prompted Berlin's mayor in August to say the state was considering barring foreign investors from buying real estate in the capital in a bid to cool the property market.

The Berlin government has introduced measures to try and curb rising rents including expanding areas that are covered by anti-speculation laws that allow the state to block private sales in favour of state-owned companies.

The district of Friedrichshain-Kreuzberg is considering whether to execute its first right of refusal to buy one of the four apartment blocks, a spokeswoman said.

(Reporting by Caroline Copley; Editing by Mark Heinrich)