10 The Sunday Times November 28, 2021
BUSINESS
Berlin: house prices are
beginning to soarGermans fall for a British obsession: home ownership
Thomas Klein had outgrown
his one-bedroom rental flat.
His two-year-old daughter did
not have her own room, his
dog needed some outside
space and his wife wanted a
bigger kitchen, so the young
family took the plunge.
Although it was very difficult
to get a mortgage, they
managed to secure enough
money for a deposit to buy a
ground-floor flat in a village in
the southwest of Germany.
The property is not very
luxurious but the 35-year-old
business consultant is thrilled
that he finally has a flat he can
call his own. “We were fed up
with renting,” said Klein. “We
wasted so much money overthe years. Now at least we are
paying off a mortgage and will
end up with a real asset.”
His story does not sound
too unusual; a lot of people
prefer to own rather than
rent. In Germany, however,
this is a rather new way of
thinking — people have
typically rented their homes
for most of their lives. But the
European Central Bank’s
policy of negative interest
rates is slowly changing this
view. Younger generations
are starting to aspire to their
own four walls.
The home ownership rate
in Germany has traditionally
been the lowest in the EU.
Only 43 per cent of Germans
have bought the property
they live in; in the UK, thatproportion is 65 per cent. The
reasons for the supremacy of
tenancies in Germany are
diverse. After the Second
World War, capital was scarce,
so the state built homes for
the masses to rent. Buying
costs of up to 14 per cent of
the asking price — for stamp
duty, and notary and estate
agent fees — have also made
ownership less attractive.
Much tighter rent control
and tenant protection laws
compared to the UK have also
meant that the cost of renting
has risen only moderately in
recent decades. Meanwhile,
house prices have gone
through the roof: in Berlin
and other big cities they have
almost tripled in a decade.
Amid low interest rates,Andreas Wagnerof Guthmann Estate, one of
Berlin’s leading estate agents.
His company’s research
shows that, in 2011, the
average price per square
metre in Berlin was €1,750;
now it is €5,150 (£4,360). No
wonder Germans are starting
to take notice of house prices.
Some people have started
joking that Germans are
turning into Brits as the once
unknown idea of a “property
ladder” gains traction.
Historically, even if Germans
bought a house or a flat, they
would rarely sell it to move to
a bigger one. They would rent
until they had a family, then
buy a house in a village and
live there until they died.
Now, younger generations
buy flats when they are singleand upgrade when they have
a family. Pascal Schütt is one
of this new breed — the
journalist has just sold his flat
in Karlsruhe and is looking to
buy a house outside the city.
“I love the flat,” says the 39-
year-old, “but we now have
two kids and need space.”
So while more and more
people in the UK cannot
afford to buy homes and have
to rent, the trend in Germany
is going the other way. The
Federal Statistical Office
expects the home ownership
rate will climb to more than
50 per cent by 2030.
Klein is pleased. He bought
his new flat in April “and its
value has already increased
by about 7 per cent... Times
have changed.”more Germans have invested
in property. Even energy-
inefficient 1960s flats, which
used to stay on the market for
months, are being snapped
up above asking price.
“We have been in a
supercycle for more than ten
years,” says Peter GuthmannTECH TALK
The supermarket giant is piloting instant airborne deliveries of food and
medicines. But is this the future or is reality still in the hype’s slipstream?
Walmart hovers
closer to its drone
delivery dream
It began delivering medical supplies in
Ghana in 2019, expanded to Covid-19 vac-
cines this year, and will start air-dropping
blood and vaccines in two states in
Nigeria in 2022. In all, it has operated
more than 15 million miles of commercial
autonomous flight.
Yet while the technology has come on,
regulations have lagged. Industry sources
said that, post-Brexit, the Civil Aviation
Authority — once seen as taking a progres-
sive line on drone regulation — has lost
momentum. It dismissed that idea. David
Tait, CAA innovation chief, said the regu-
lator was “heavily engaged” with the
industry, adding: “We’re seen by much of
the industry as a world leader, and a
number of international developers have
recently moved their operations here.”
Amazon, however, has shifted its focus
to America. An investigation by Wired
magazine quoted staff at the Cambridge
office who called the drone operation a
“gigantic oversell” with high executive
turnover, shifting priorities and low
morale. Amazon admitted that it had
reorganised “one group within Prime
Air” and sought to find new jobs for dis-
placed workers. It added: “We remain
committed to our development centre in
Cambridge, where we have hundreds of
talented engineers, research scientists
and technology experts working across a
range of innovations.”
The potential, despite the challenges,
is immense. E-commerce has exploded
since the pandemic and placed huge
strains on logistics networks — as illus-
trated in Britain by the struggles of com-
panies to recruit enough delivery drivers.
Replacing a swathe of humans with fleets
of drones would remake the industry and
slash operating costs. Amazon said that
more than 75 per cent of its orders are 5lb
or less — the maximum weight that its
drones can carry.
Realistically, though, the lifting of the
line-of-sight requirement may not hap-
pen for another five years. The key hurdle
is convincing regulators that what are
basically flying robots can travel safely
over populated areas. The core technol-
ogy to enable that is known as “onboard
perception” or “sense and avoid”.
Broadly, this relies on sensors on the
drone that use computer vision — a type
of artificial intelligence that can recog-
nise surroundings and identify threats.
Once the system recognises, say, a flock
of geese, or a person standing too close to
a drop zone, it then needs to be able to
avoid any mishaps — without fail.
Amazon said: “We are pioneering new
ground and it will continue to take time to
create the right technology and infra-
structure to safely deliver packages to
customers. As part of this, we continue to
collaborate closely with... regulatory
bodies around the world. Prime Air is
committed to making our goal of deliver-
ing packages by drones a reality.”
For now, that reality exists for a few
folk in rural Arkansas.Concorde take two: start-ups
assail the sound barrier again
Remember Concorde? It’s
coming back. Kind of.
Next year, two novel
supersonic jets — one built by
a start-up appropriately
called Boom, the other by
defence giant Lockheed
Martin under commission
from Nasa — will each begin
test flight programmes after
years of development.
The goal: to prove that 18
years after Concorde’s final
flight, supersonic flight is not
only viable but will become de
rigueur for a huge swathe of
the flying public. Eli Dourado,
an economist at Utah State
University, said: “Once this is
done in an economically
reasonable way, which
Concorde wasn’t, it will be
here to stay and will become
the dominant way we fly.”
There is a lot of clear blue
sky to cross to get to that
prediction. Today, not one of
the 25,000 commercial
planes in service flies faster
than the speed of sound. But
interest in reviving supersonic
flight has boomed in recent
years, with at least half a
dozen projects taking off in
Britain, America and Russia.
In America, the efforts are
led by start-ups with names
such as Spike, Exosonic and
Hermeus. This summer,
Hermeus won a $60 million
award from the US Air Force
to build and test a plane that
would fly at more than
3,000mph, or Mach 5. Going
from London to New York
would take less than an hour.
Lockheed Martin will start
test flights of its one-seat
plane, called the X-59, next
year. Rolls-Royce has
partnered with Boom
Supersonic, of Denver,
Colorado, to develop engines
for a supersonic airliner and
is working with Virgin
Galactic on a different model.
Russia has joined forces with
Mubadala, the United Arab
Emirates’ investment arm, to
develop both a supersonic
business jet and a 30-seater.
The most obvious question
is why will this time be any
different? Concorde, while a
technological triumph, was a
business failure — a product
with high costs and limited
appeal or utility. What’s
more, the dawn of in-flightinternet, for work or
entertainment, has arguably
lessened the need for super-
fast flights. And the prospect
of a new generation of fuel-
hungry planes flies in the face
of efforts to cut emissions.
Backers of the supersonic
renaissance, however,
compare the Concorde
programme to the moon
landing: a Cold War-era totem
funded by governments more
focused on beating the
Russians than controlling
costs or building something
sustainable.
Much has changed since
2003, when Concorde landed
at Heathrow from New YorkDANNY FORTSON IN SAN FRANCISCO
Hermeus, armed with $60 million from the US Air Force, is one of the new supersonic start-upsfor the final time. For one
thing, engines have improved
markedly, as have material
science and advances in
computer-aided design.
Dourado explained: “They
used slide rules and drafting
paper to design Concorde. It’s
kind of amazing, actually.”
Concorde was the product
of an Anglo-French treaty
struck in 1962. Soviet spies
stole parts of the design and
successfully tested their own
version, called the TU-144,
just three months before the
first Concorde flew.
This time, many of the
projects are being led by
private firms. The one that
has made the most headway
is Boom. It has raised more
than $270 million since Blake
Scholl, a former Amazon
executive, started it in 2014.
This year, United Airlines
has ordered 15 of Boom’s
“Overture” models — a
commercial airliner that only
exists in artists’ drawings and
will, at the earliest, start test
flights in 2025. Scholl has
claimed the planes will run
on “100 per cent sustainable”
fuel, though details of how
that will be achieved are
vague; sustainable fuels make
up a tiny part of global supply
and cost up to eight times
more than conventional fuel.
But behind the flurry of
deals is confidence that a
supersonic aircraft, designed
from scratch and conceived
as a commercial project from
first principles, will open a
new era of ultra-fast travel.
Boom’s would fly at twice the
speed of today’s jetliners. A
one-seater prototype, XB-1,
will start test flights next year.
Crucially, it and rival start-
ups are working on models
that could eliminate one of
the most problematic aspects
of supersonic travel: the loud
sonic boom. Advances in
design and testing have let
this new generation engineer
dart-like aircraft that
promise to turn the boom
into a less audible “thump”.
Pulling that off could push US
regulators to lift the ban
on overland
supersonic travel that has
stood for 50 years and
dramatically limited
Concorde’s potential utility.SONIC BOOM AND BUST
NOVEMBER 29, 1962
Britain and France sign treaty to
develop a supersonic airliner.DECEMBER 31, 1968
Russia’s competitor plane, the
TU-144, aided by spies who stole the
Concorde designs, conducts its first
flight. A Cold War coup.MARCH 2, 1969
Concorde’s first flight.JUNE 3, 1973
The TU-144, nicknamed “Konkordski”
for its likeness to Concorde, crashes
at the Paris Air show, killing six crew
and eight people on the ground.JANUARY 21, 1976
Commercial services on Concorde
begin with London-Bahrain and
Paris-Rio de Janeiro flights.1983
American airline Pan Am accuses
British Airways of subsidising
Concorde to keep ticket prices
artificially low.JULY 25, 2000
Crash in Paris kills all 109 people on
board and four on the ground.OCTOBER
24, 2003
Last flight
lands in
Heathrow
from New
York,
marking the end
of supersonic commercial travel.Drones are the
primary system
in Rwanda for
delivering blood
to hospitals
T
he science fiction writer Will-
iam Gibson once said: “The
future is already here — it’s
just not evenly distributed
yet.” If you want to see the
future of e-commerce, it is
unfolding in the skies above
Pea Ridge, a town of 5,000
people in rural Arkansas.
Last week Walmart
announced a partnership with Zipline, a
$2.75 billion (£2.1 billion) drone start-up
backed by Bill Gates, to launch autono-
mous drone delivery of health products
up to 50 miles from its Pea Ridge store.
The companies trumpeted the deal as a
big step after years of slow progress
towards the dream of fleets of drones
delivering packages, pills and pizza.
Jackie Crabtree, Pea Ridge’s mayor, said:
“This is a stepping stone for what can be
done, and it’s a privilege to be part of it.”
The deal is a coup for Walmart. Eight
years have passed since Jeff Bezos, the
founder of Amazon, unveiled an early
drone prototype in a much-ballyhooed
segment on 60 Minutes, a revered
national news magazine in America. “Oh
my God,” gasped the interviewer when
he first saw the Amazon octocopter in
action. “One day,” Amazon predicted,
“Prime Air [drones] will be as normal
as seeing mail trucks on the road
today.”
The big reveal led to breathless pre-
dictions of the overhaul of global logis-
tics. Amid Amazon’s ongoing battle
with Walmart, America’s biggest
retailer, the stunt also reinforced its
image as a tech-savvy disruptor next to
the stodgy old giant known for out-of-town megastores. Since then, the two
have taken different paths. Amazon
opened an office in the UK, in Cambridge,
to develop and test the technology —
bringing on legions of engineers and data
analysts — and made its first delivery to a
British customer in December 2016. But
progress since has been lethargic, and
this year a reorganisation led to a flurry of
redundancies.
Walmart, on the other hand, has
focused on partnering with third-party
drone firms rather than trying to build its
own technology. It began running tests
with Zipline last year, and last week it
announced a separate delivery operation
with DroneUp, a start-up that launched
services from several delivery hubs. Wal-
mart invested in the firm last summer.
Even Walmart’s strides, however, are
not what they first appear. For one, the
“50-mile” service radius envisaged for
the Zipline drones is almost fanciful.
Under US aviation regulations, it must
operate commercial drones within the
line of sight of a human. This means that
someone — either a spotter, or multiple
spotters along the route or at the launch
base — must be able to see the drone for
the whole flight. And not just anyone can
make an order: the potential recipients of
Pea Ridge packages have been hand-
picked based on the flight path from a 25ft
platform at the back of the Walmart store.
But San Francisco-based Zipline is con-
fident it is on a path towards large-scale
operations that will do away with the line-
of-sight requirement. Conor French, its
general counsel, said: “We regulate
unmanned aircraft systems with a frame-
work designed for commercial passenger
jets: 200-ton aircraft with pilots carrying
hundreds of passengers. Some of those
same regimes are being used to look at a
45lb Styrofoam aircraft with a 5lb pay-
load flying predetermined routes.”
Zipline has the advantage of having
operated for years in the developing
world, where needs are more urgent and
restrictions less stringent. Its fixed-wing
drones, which are launched by a contrap-
tion that looks like a catapult, are the pri-
mary blood-delivery system for Rwanda’s
network of hospitals and medical clinics.
The drones do not land but instead drop
packages fixed with a small parachute.Staff
called a
drone
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Jeff Bezos has hit
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