AN ASSET CLASS OF THE FUTURE - CITY QUARTERS Assessing the modern city quarter landscape in Germany - Corestate Capital
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CITY QUARTERS AN ASSET CLASS OF THE FUTURE Assessing the modern city quarter landscape in Germany
WORD
FORE
CORESTATE and bulwiengesa have therefore
teamed up to take a systematic look at Germany's
city quarter universe in this comprehensive paper
and standard reference work.
This is the first in a series of publications on
the subject of city quarters and will provide the
strategic foundation for subsequent works. We
are creating a reliable list of modern city quarters
in Germany with a focus on the recent past and
City quarters play an extremely important role in all projects currently under development or in
modern urban planning and are attracting more the planning stages. On this basis, we will define
and more interest from the real estate industry. sub-types of city quarters and discuss their
THE BASIC CONCEPT
various characteristics and functions, as well as OF THE CITY QUARTER
City quarters are not a new invention. In fact, their impact on the surroundings. City quarters and
they have always been an element of sustainable COVID-19
We are delighted to have this opportunity to CITY QUARTERS
urban development. For decades, however,
the prevailing conceptual models in urban share our thoughts with you and hope to pique THE FUTURE OF
development promoted car-friendly, strictly
your interest in the city quarter asset class. URBAN DEVELOPMENT
zoned and low-density cities. The resulting
separation of the individual types of use stands Happy reading!
in stark contrast to the idea of a city quarter.
THE DEFINITION
CITY QUARTER
From a planning point of view, city quarters are
Megatrends
desirable for a number of reasons. They round off
the compact city model, give new life to brown
QUARTERS
field sites and boost efforts to achieve greater OF THE PAST
climate efficiency, to name just a few examples.
London Great
At the same time, city quarters are popular among Estates
their users and inhabitants, as they c ombine
an integrated approach to urban design with HOW MANY CITY
meeting demand for housing and commercial QUARTERS ARE THERE
space. City quarters also reflect the spirit of our
IN GERMANY?
era and go hand in hand with many megatrends Mark Holz Felix Embacher
of the 21st century. CORESTATE Capital Group bulwiengesa
Group Head of Research Head of Master Planning
and Conversion Projects
CONCLUSION
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa
4
The basic concept of the city quarter
1 THE BASIC CONCEPT
OF THE CITY QUARTER
The table below shows the characteristics
of city quarters according to various
definitions.
DEFINTITION CRITERIA
l Definable inner-city area l Good connection to city overall
l Characterised by mix of uses l L
iving space within walking
The term “quarter” or city quarter is used in many distance
l High density of building
ways. There is no one systematic definition l S
trong and positive self-identity
FELDMANN 6
l Robust urban structure
that provides a differentiation by type. The and outside perception
term, which comes from French or Latin, was l Unique appearance
l Balanced social structure of users
originally used todenote part of an army camp. In literature, different approaches can be found l Intact local supply infrastructure
l H
igh density of interaction among
Today’s use of the word was influenced by the for developing a definition of what a city quarter l Focal point for the public users
literature on urban and sociological issues in is. The focus of the definitions is on quantifiable
the 1960s1. The German term Quartier was used parameters, such as the number of residential l Built after 1990 l Includes residential function
as a unit of space for examining sociological units, or on qualitative factors associated with BBSR 7
l More than 500 dwellings, l P
lanned using a homogeneous
processes in the urban environment and is social life. urban design concept
l 1,000 residents and/or 10 ha
now generally applied to mixed-use or urban
development projects. The directly related term SCHNUR2, for example, defines the quarter l External and internal activities l Central area not clearly defined
Quartiersentwicklung (“quarter development”, primarily in terms of its social functions for its SCHNUR8
l Socially constructed space l Everyday living environments
roughly equivalent to “urban development”) users. By contrast, the BBSR3 completely ignores
described the proactive upgrading of socially these aspects in its criteria for identifying city
deprived urban areas through urban development quarters and introduces a specific minimum
policies based on a cooperative, participative size, along with an age limit. Furthermore, it
and integrative approach. Nowadays, the term requires the inclusion of residential use and the
Quartiersentwicklung is used to signify not only existence of a uniform urban design concept. The
the development of socially deprived areas, BBSR4 does, however, acknowledge the social
but also development on former industrial, component of the quarter in other publications. 1 Feldmann, Philipp. Die strategische Entwicklung neuer City Quartere. In: Schriften zur Immobilienökonomie Band 53. 2009
infrastructure, military and greenfield land. 2 Schnur, Olaf. Quartiersforschung. Zwischen Theorie und Praxis. 2008, S. 40
Moreover, it is synonymous with the development FELDMANN5 lists both material and social 3 BBSR Bundesinstitut für Bau-, Stadt- und Raumforschung. Neue City Quartere. 2012
of an area of a city, or major development projects characteristics, albeit with the result that there is 4 BBSR Bundesinstitut für Bau-, Stadt- und Raumforschung. Ziele nachhaltiger City Quartersentwicklung. 2013
5 Feldmann, Philipp. Die strategische Entwicklung neuer City Quartere. In: Schriften zur Immobilienökonomie Band 53. 2009
in general. no specifically quantitative classification.
6 Feldmann, Philipp. Die strategische Entwicklung neuer City Quartere. In: Schriften zur Immobilienökonomie Band 53. 2009
7 BBSR Bundesinstitut für Bau-, Stadt- und Raumforschung. Neue City Quartere. 2012, S. 3
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa 8 Schnur, Olaf. Quartiersforschung. Zwischen Theorie und Praxis. 2008
6
The basic concept of the city quarter
THE ESSENCE OF A CITY
QUARTER IS CREATED
BY THE MIXED USES,
WHICH – AT LEAST IN
THEORY – GIVES THE
QUARTER A DEGREE OF
To categorise city quarters for the purposes of
INDEPENDENCE WITHIN
this study, it is necessary to determine typological
features based on the broad definitions cited. THE CITY AND SERVES
TO SATISFY A RANGE OF
To this end, account is taken of the material, USER NEEDS.10
social and economic aspects of the quarter while At the social and economic levels, a quarter
examining various typological forms. is characterised by the type and composition
of its population, the diversity and distribution
In addition to the co-existence of the
At the material level, the quarter is characterised of uses and services, and the individuality and
uses, synergies should also arise
by features that include location, size and density, independence of the quarter within the relevant
between them to create added value
as well as structural design, the ratio of buildings city. The city quarter functions as a sociotope9
for all stakeholders in the quarter. Other
to open spaces, the street layout and public with a balanced social structure. It is a city on a
urban structures – such as purely
spaces. The quarter must be distinguished from small scale.
residential neighbourhoods, commercial
individual property; it represents diverse individual
and business centres, or hypermarkets
buildings that appear as a unified concept and How the residents of a quarter perceive the
and retail parks – represent the extremes
exist within an urban design context. In the case atmosphere there has a direct influence on the
of monofunctional use in clear contrast
of quarter development, urban visual accents are quality of life. Still, its image vis-à-vis outsiders
to the idea of the city quarter.
introduced through the overarching design and also has an influence on identity within the
planning concepts for the area concerned. quarter.
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa 9 Strohmeier, Klaus Peter. Quartier und soziale Netzwerke: Grundlagen einer sozialen Ökologie der Familie. 1983.
10 Feldmann, Philipp. Die strategische Entwicklung neuer City Quartere. In: Schriften zur Immobilienökonomie Band 53. 2009
8
The basic concept of the city quarter
PARIS MAYOR ANNE
HILDAGO WANTS TO The mix of uses in a city quarter generally
consists of the following main types of use:
CREATE A ’15-MINUTE CITY‘
IN WHICH ALL NEEDS CAN Residential
BE CATERED FOR Office
WITHIN A 15-MINUTE Retail
WALK. CITY QUARTERS,
HOWEVER, AIM TO CREATE Residential use is a key, essential element in The main types of use are supplemented and
the development of inner-city quarters. It goes complemented by additional forms which can be
A ’5-MINUTE QUARTER‘.11 beyond satisfying basic needs and serves as a grouped under the following headings:
means of self-expression and presentation to
the outside world. This is also where successful Social infrastructure
quarter development creates a feeling of identity
Transport infrastructure
and promotes a positive sense of belonging.
Cultural amenities
New housing concepts such as micro-living Leisure and recreation
and co-living can complement the traditional
residential use in the quarter and, in conjunction Social infrastructure in its broadest sense includes
with other types of use, generate added value. facilities for health care, social services and
education. Concert halls, museums, cinemas and
Offices – the production sites of companies theatres are all examples of c ultural amenities,
in the services and IT sectors – also play a which provide benefits to the residents of the city
significant part in the development of city as a whole beyond the boundaries of the quarter
quarters and provide places of work for residents itself.
of the quarter or city. Offices account for far
less construction volume per user compared to Transport infrastructure is an important element
residential buildings. As a result, they increase in the development of a quarter and guarantees
the numbers of users relative to the volume of residents’ mobility. In the context of the city quarter,
the buildings, thus contributing to the vibrancy of it includes the public transport network, parking
the quarter. garages and the provision of services such as bike
sharing. Depending on the size of the quarter, train
Attracting retail stores, pubs, cafes and or rapid transit stations may even be provided and
restaurants usually requires a quarter to be integrated.
located in an urban setting. Retail and restaurant
use depends on a certain degree of agglomeration, Uses that are classified as leisure and recreation
or a critical mass of potential customers. Local include sports facilities and green spaces in
retail outlets make it possible for residents and particular. These provide an opportunity for social
people who work in the quarter to run errands in integration and make an important contribution to
the near vicinity. This ties into the urban design enhancing the quality of life and leisure within the
principle of a compact city. quarter.
Die Assetklasse der Zukunft – CORESTATE Capital Group GmbH 11 Bloomberg, The 15-Minute City - No Cars Required - Is Urban Planning’s New Utopia; November 2020
10
The basic concept of the city quarter
Culture
Social
“
infrastructure
Transport
infrastructure The long-term viability
and attractiveness of a
Residential lively quarter requires
the incorporation of
sustainable solutions that
Leisure & Hotel take environmental, social
recreation
and economic factors alike
into account. Green spaces,
culture and leisure facilities
in conjunction with housing,
work, basic goods and social
facilities complement them
Retail
and give people a high-quality
”
Office experience in a quarter.
Logistics
Food &
beverages
Karin Groß, Head of Real Estate Capital
Investment Portfolio Management/
Commercial Management
Ärzteversorgung Westfalen-Lippe
Shopping centres are another example of hybrid
use. They are an agglomeration of a wide range
of retail, catering, leisure and entertainment
facilities.
Along with the basic and supplementary types of
use, there are also hybrid forms of these same Distinguishing between private and public spaces
types. First and foremost among them is hotels, plays an important role in the context of the city
which offer a combination of accommodation quarter. Residential units are probably the most
and catering. Micro-apartments and serviced private spaces, but other use types – such as
apartments enable longer stays than otherwise offices and hotels – also offer private spaces, as
offered by hotels. In this way, the quarter provides they are only partially accessible to the public or
opportunities for temporary residence. not at all.
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa
12
The basic concept of the city quarter
DUE TO THEIR SCALE, CITY
QUARTER DEVELOPMENTS INTERNATIONAL
PROVIDE AN OPPORTUNITY QUARTER DEVELOPMENT
TO SHAPE THE LOCATION.
On an international level, the framework
conditions for urban development are similar
or comparable throughout Europe. The Leipzig
Charter on Sustainable European Cities provides
impetus for urban development and advocates
stronger links between housing, work and leisure
in cities.
In an international comparison, European
countries have a weaker dynamic as far as
population growth is concerned. The increased
need for housing in European cities is driven
mainly by patterns of migration.
Green spaces play a special role in the public
realm. They are synonymous with quality of life, A contrast to the type of urban development
health, relaxation and movement. In addition, they seen in Europe can be found in emerging
promote biodiversity, allow people to experience markets, where a much stronger dynamic in
nature and are important for the microclimate. the growth of the population is associated with
rapid urbanisation. To meet this huge demand
From a business perspective, a property’s for housing, urban development must be driven
location is a key indicator of financial success forward at a rapid pace.
and represents one of the most important factors
in terms of value and return on investment. As a These developments are leading to urban
rule, an individual property should blend in with regeneration projects which are quite radical in
Public spaces play an equally important part in an existing location rather than standing out as some cases, involving the redesign of existing
a city quarter, serving as the elements that link its main influence. Due to their scale, city quarter structures and functions. Parts of historic city
the various use types. In doing so, they fulfil developments – unlike individual buildings – centres may be demolished and replaced with
a variety of functions. They serve not only to provide an opportunity to define the character modern tower blocks. Examples of this type
bridge distances and help people find their way of a location and play a role in other elements of of urban redevelopment include the Chinese
around a quarter, but also as places to rest and the value chain. To ensure its long-term success, megacities of Beijing and Guangzhou.
relax. Public spaces have great importance on a a city quarter therefore requires a coherent
sociological level as places to meet and socialise, overarching design concept and a balanced mix In addition to redeveloping city centres, entire
thereby reinforcing a quarter’s sense of identity. of uses. quarters are being built in areas near the centres.
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa
14
The basic concept of the city quarter
COVID-
19
GOOGLE MOBILITY STATISTICS – PERCENTAGE CHANGE For much of last year, COVID-19 held sway over
FROM PRE-COVID-19 REFERENCE VALUE (2020) our cultural and social lives and the economy. As
an example, most of this study was produced by
people working from home during the lockdown.
20
One thing we have learned in recent months is
10
to refocus on the local. Sweeping restrictions
0 have been imposed on international travel and
-10 remain in place, and even national and regional
journeys are no longer a normal part of life. With
-20
the aid of Google’s mobility statistics, it is still
-30 possible to identify a clear trend in favour of
-40 remaining close to home.
-50 The situation demonstrates the advantages of
-60 city quarters, where interaction takes within the
space of a few kilometres and basic needs can
-70
be met in the immediate vicinity.
-80
15.02 15.03 15.04 15.05 15.06 15.07 15.08 15.09 15.10 15.11 15.12 15.01 Of course, not even city quarters have been
2021 spared the closure of non-essential businesses
and near abandonment of offices. But the basic
Shopping & leisure Work principle of mixed use in a small area remains a
distinct advantage of city quarters – especially
Local amenities Housing
when compared with monofunctional sub-
Public transport stops
areas.
Source: Google
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa
16
City quarters as the future of urban development
2 CITY QUARTERS
AS THE FUTURE OF
URBAN DEVELOPMENT
“ As an investor with a long-term
outlook, the Ärzteversorgung
Westfalen-Lippe pension
fund began investing in the
development of city quarters
many years ago. For example,
we took over the development of
the KÖ-Quartier in Düsseldorf
The development of city quarters is favoured by
a variety of different factors and drivers. These
in 2013, plus we invested in the
include political and planning guidelines that have MainTor district in Frankfurt Cities use policy statements to define objectives
a direct influence over the development of cities. in 2012, the Gerling-Quartier in for development and give them direction. They
2017 and an inner-city quarter provide operational principles and serve as a
The requirements of users and the investment vision and guide.
due for development
”
profile of investors also have a positive effect on
the development of city quarters.
in Copenhagen in 2020. In Munich, for example, development is guided
by the aim of being “compact, urban and green”.
The megatrends that shape and change our In Leipzig, urban development is directed by
overall society additionally affect how cities are Karin Groß, Head of Real Estate Capital the principle of creating a compact, mixed-
planned and built. Investment Portfolio Management/ use city. Other concepts include the social city,
“
Commercial Management sustainability and the conservation of resources.
In the following section, we will look at the
Ärzteversorgung Westfalen-Lippe They follow the principle of
various drivers involved in the development of city To meet the high level of demand for inner-city
quarters. housing and contribute to mixed-use cities, the
the compact city, and they
concept of urban space was included in the enable residents to connect with
The main advantage city quarters offer users is the German land use act in 2017, which provides for each other. Despite a potentially
mix of uses and the resulting synergies. In addition, the mixed use of housing, commercial, social, higher density, such quarters are
higher-level planning – such as mobility concepts cultural and other facilities. In the Nördliche
more liveable and sustainable
– can be applied across a quarter. The end user’s Wallhalbinsel area of Lübeck, the implementation
interest in concepts like these represents the first of one of the first city quarters is planned for the
– in both a social and an
”
driver for demand. site of the historic dockyard warehouses. Apart environmental sense.
from building spaces to live and work, the aim is to
City quarters also offer advantages for investors. create a city of short distances. The urban quarter
Unlike properties with a monofunctional use, they will follow this development principle and, thanks
Sabine Georgi, Country Manager
afford the opportunity of spreading risk through to coordinated planning, will also provide other
the diversification of uses. management options. RICS
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa
18
City quarters as the future of urban development
MEGA Society is shaped and altered through
long-term processes of change which
can be described as megatrends. These
processes affect individuals, society in
TRENDS
general and the economy. We need to take
these processes into consideration if we
are to understand the significance and
the role of city quarters today and in the
future.
These are the megatrends that are
changing our society or have already
changed it: 12
KNOWLEDGE CULTURE GLOBALISATION KNOWLEDGE CULTURE NEO-ECOLOGY
The way we handle information is changing. The neo-ecology megatrend reaches into every
Enormous amounts of knowledge are being aspect of daily life, from organic shopping and
CONNECTIVITY NEW WORK generated in decentralised structures, with the EU single-use plastics directive to the energy
knowledge losing its elite character and revolution. It acquires its significance through
INDIVIDUALISM MOBILITY increasingly becoming public property. global challenges such as climate change and
the extinction of species.
NEO-ECOLOGY SILVER SOCIETY
CONNECTIVITY HEALTH
HEALTH URBANISATION
The principle of connectivity dominates social Health is a key life goal and is rooted in our
change and is the most influential megatrend awareness, culture and self-perception. Health-
GENDER SHIFT SAFETY of our time. Digital communication technologies conscious people want to inhabit health-
are changing our everyday lives and giving rise to promoting environments and expect them to be
new lifestyles and patterns of behaviour. the norm.
INDIVIDUALISM GENDER SHIFT
Individualism basically means freedom of choice The trend towards changing roles and breaking
on a personal level and constitutes the cultural down gender stereotypes is bringing about
principle of the western world. radical change in the economy and society.
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa 12 Zukunftsinstitut GmbH. Megatrend-Dokumentation. 201820
City quarters as the future of urban development
GLOBALISATION
Globalisation is affecting worldwide economic
activity. Trade disputes, diplomatic crises and
the power of large international corporations
mean that globalisation is often perceived as
a problem. However, we must not lose sight of
the positive aspects that come with it, such as
cultural exchange
NEW WORK
Digitalisation is taking over many aspects of
our working lives and changing them. Against
the background of the COVID-19 pandemic,
mobile working has taken on a new significance.
Independently of this, more and more people are
calling for a symbiosis of life and work.
MOBILITY URBANISATION
In urban areas in particular, existing forms of More and more people worldwide live in cities,
mobility are being called into question. Technical making them the most powerful influencing
innovations and the changing needs of the factors and most important problem solvers
population are leading to the creation of new in a globalised world. Cities are becoming the
forms of transport and the rediscovery of old countries of the future, representing new ways of
ones, such as the bicycle. living and thinking
SILVER SOCIETY SAFETY
We have an ageing population and increasing People have a natural need to feel safe. Although
numbers of elderly people. At the same time, we live in the safest of times, the perception we
people are remaining healthy for longer and have of our safety is much lower, creating a call
therefore have time for self-expression in new for greater levels of safety.
lifestyles at an advanced age.
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa22
City quarters as the future of urban development
The world of work is in a state of flux caused
QUARTER CERTIFICATION by digitalisation, globalisation and the ongoing
COVID-19 pandemic. One significant trend is
Since 2012, the German Sustainable flexible working with regard to place, time or
Building Council (DGNB) has been content. Concepts such as co-working and
awarding certificates for sustainable serviced apartments offer responses to these
In the past, the increased need for housing in neighbourhoods. The focus is on an developments.
cities arising from urbanisation has often been overall evaluation of the developments in
met by building monofunctional residential the area. Connectivity can be apparent in various ways in
developments, usually on the edges or outskirts the development of a city quarter. It may exist
of the city. However, in many cities, the daily In addition to assessing ecological quality, between people, the types of use and the buildings
commute from these dormitory towns results the DGNB also examines and grades or technical installations. Quarter-based apps
in traffic chaos. By bringing together retail economic, sociocultural and functional offer users the possibility to communicate among
trade, housing, restaurants and bars and offices quality, as well as the quality of the themselves and interact with amenities such
within a single quarter, it is possible to create processes involved in the development. as parking guidance systems. Non-electronic
an environmentally friendly and economically solutions in particular, such as communal areas
successful city of short distances. and the design of public spaces, can also help
The German government’s climate policy sets a people to connect with each other.
By planning appropriate mobility concepts target of reaching climate neutrality by the year
within the quarter and providing public transport 2050. As a core element of the overall economy, The changing division of roles is leading to
connections to the quarter within the city, city the real estate industry must provide answers new demands for couples and families. In order
quarters can offer a wide range of solutions to to the issue of climate protection. Because to guarantee the compatibility of career and
the transport problem in cities and help meet the development of city quarters is a process family, childcare facilities are essential. Within
climate targets. that takes several years, if not decades, the the context of a city quarter development, the
foundations for sustainable quarters have to be scale of projects enables an appropriate range of
laid now. A climate-neutral quarter will have a The modern city quarter aims to meet the childcare options.
In the area around Berlin’s Tegel airport, the Urban
zero overall balance of monitored CO2 emissions. challenges of the present and the future.
Tech Republic project and the neighbouring
Schuhmacher quarter, a complex mobility In Berlin, Howoge is constructing a city quarter The lack of essential medical amenities in
concept is being planned that aims to make the that will be CO2 neutral and have affordable rents. rural areas illustrates the importance of a good
switch from the car to other modes of transport Unlike the construction of individual buildings, ZIA CHAIRMAN DR. healthcare network. Medical care can be provided
an attractive option. Alongside high-speed cycle developing a quarter creates the opportunity ANDREAS MATTNER in a quarter or the surrounding area due to the
lanes, mobility hubs will serve as transfer points to strategically plan and leverage the synergies STATES: "THE CITY OF density of building and its urban location.
between various means of transport, such as between the uses and the various buildings.
public transport, bike and car sharing. In the For example, overarching energy and mobility THE FUTURE IS A CITY Germany is one of the countries most affected by
Schuhmacher quarter, the concept will also concepts that would not be feasible for individual OF QUARTERS“ 13 demographic change and has one of the oldest
include garage parking. properties can be realised across a quarter. populations.
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa 13 ZIA Zentraler Immobilien Ausschuss e.V, Pres-semitteilung, ZIA: Die Stadt der Zukunft ist eine Stadt der Quartiere, Berlin, 26.08.202024
City quarters as the future of urban development
PROPORTION OF POPULATION
AGED 65 OR OVER
Germany
Italy
EU
France
Spain
UK
0% 5% 10% 15% 20% 25%
The needs of the older population also have to be
met in the development of city quarters. Where
individual properties are concerned, issues such
as accessibility are important considerations.
With regard to the mix of uses, normal residential
use can be supplemented by types of use such
as assisted living or retirement apartments
to enable the elderly to live independently and
THE CITY QUARTER ASSET connect with others.
CLASS EMBRACES THE
In this context, there are various initiatives that
SPIRIT OF THE TIMES AND deal with city quarter developments that are Another factor affecting perceived safety is road
PICKS UP ON MANY OF suitable for older residents. The EU’s HELPS14 traffic, which reduces the perceived safety when
THE MEGATRENDS FOUND project offers recommendations for action for speed increases and the share of public space is
high.. By the same token, integrating alternative
IN URBAN PLANNING those involved locally in the development of city
quarters. mobility concepts can raise the level of perceived
MODELS. safety.
A high frequency of users contributes to the level
of perceived safety in public spaces, thanks to In conclusion, we can say that the city quarter
the element of social surveillance. This “eyes on asset class embraces the zeitgeist and picks
the street” principle was strongly influenced by up on many of the megatrends found in urban
the urban planning and architecture critic Jane planning models. As a result, the city quarter
Jacobs. embodies the concept of the mixed-use city of
short distances. Energy and mobility concepts
Proper planning of public spaces can increase make it possible to address issues of climate
perceived safety by avoiding areas and protection and take them into consideration in a
underpasses that are poorly designed and offer far more effective way than can be achieved at
poor visibility. the level of individual properties.
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa 14 „Housing and Home Care for the Elderly and Vulnerable People and Local Partnership Strategies in Central European Cities“26
The definition of city quarter
3 THE DEFINITION OF
CITY QUARTER
THE STUDY USES
THE FOLLOWING
SUB-CATEGORIES:
SUB-
CATEGORY SIZE USE
Traditional 20,000 to Mix of core use types:
quarter 400,000 sqm residential, office and retail
Mega quarter 400,000 sqm + Mixed-use large-scale city quarter development
A study of city quarters requires a clear Small-scale up to Mix of core use types:
quantifiable definition that can be used to The idea of a quarter goes hand in hand quarter 20,000 sqm residential, office and retail
distinguish city quarters from other types of with a mix of uses that represents the basic
Commercial 20,000 to Dominant commercial use
urban settlement and generate sub-categories of precondition for a traditional city quarter. The
quarter 400,000 sqm (more than 90 % commercial use)
quarters. proportion of the various uses may vary from
one project to another. With regard to the type of Residential 20,000 to Dominant residential use
For the purposes of this study, a city quarter is use, a distinction is made accordingly between quarter 400,000 sqm (more than 90% residential use)
taken to be an inner-city area or an area close the traditional quarter, the residential quarter and
to the city centre with a high level of building the commercial quarter. Vertical Mix from core use types
40,000 sqm +
density characterised by a mix of the core uses quarter Residential, office and retail
residential, office and retail, that can be A quarter must be of a certain size if high-level
complemented by other types of use. The city concepts are to be implemented throughout it. In
quarter represents a structural and social frame this respect, a quarter is generally different from
of reference generally consisting of several an individual property. One exception to this rule Further special categories can also be
buildings with a positive self-identity and local is a vertical quarter, which, in the form of a mixed- derived alongside the sub-categories The project design will be subject to
basic amenities within walking distance. use tower, must feature a certain size and mix of already listed in this study. These include requirements and framework conditions
uses in order to generate the impact of a quarter. technology or innovation quarters, for associated with the specific location.
In particular, the city quarter must be In Germany, however, vertical quarters are of example. Such quarters usually have
differentiated from other urban structures in peripheral importance, as towers of this type a campus-style character and exist In terms of administration, it is possible to
terms of the type and extent of building use. With can rarely be built in central locations due to in association with universities and differentiate between managed and non-
monofunctional types of settlement, such as planning regulations and urban development research facilities. A prime example managed quarters.
business parks or housing developments with no policy. Given their size, city quarters may have would be the Adlershof quarter in Berlin.
other amenities, it is impossible for synergies to a defining effect on their location. In terms of Project sponsors may range across
form between other use types. By this definition, size, quarters under 20,000 sqm and above The location of the quarter within the the spectrum from public to private
even monofunctional developments which 400,000 sqm in area are viewed as their own respective city is another criterion for enterprises, with projects frequently being
are labelled as quarters cannot be classed as sub-categories. Still, it should be noted that there classification. managed as public-private partnerships.
traditional city quarters and are placed within are no hard and fast rules for qualifying as a city
their own sub-category. quarter.
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa28
The definition of city quarter
TRADITIONAL
QUARTER
HOTEL 5% AVERAGE SIZE: 56,966 sqm
A traditional quarter is defined as any quarter
with a total area of between 20,000 sqm and
400,000 sqm GFA (gross floor area) which does not
fall into any other category of quarter (particularly
commercial or residential). Traditional quarters
typically have a high mix of uses. With over
RESIDENTIAL 58% 300 quarters identified, this is the most
frequently occurring of the sub-categories.
EXAMPLES
l Werksviertel, Munich
l The Q, Nuremberg
l Laurenz Carré, Cologne
OFFICE 20% l Glückstein-Quarter, Mannheim
11%
OTHER 6%
SCHOOL, GYM, ETC. 6%
DISTRIBUTION BY STANDING ASSETS VS. PIPELINE
MARKET TYPE*
Standing Assets Pipeline
A Cities
16% B Cities 50% 19.7% 80.3%
22%
C Cities 0 25 50 75 100
RETAIL 11% D Cities
Other
16%
The percentages relate to the average distribution by area in all the traditional quarters included in this study.
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa * The market types used in this study comply with the definitions of markets as set out by bulwiengesa30
The definition of city quarter
MEGA
QUARTER
RESIDENTIAL 47%
AVERAGE SIZE: 587,154 sqm
OTHER 9% Mega quarters are large-scale urban
SCHOOL, CONCERT HALL ETC. development and city quarter projects with a
total area of over 400,000 sqm GFA. As a rule,
mega quarters are developed in several stages
of construction. The time required for
development may be ten years or more. Mega
quarters are highly mixed-use, often with a high
proportion of commercial use. Due to their size,
mega quarters may have a defining effect on a
city.
HOTEL 2%
EXAMPLES
l Stuttgart 21, Stuttgart
OFFICE 39% l HafenCity, Hamburg
l EuropaCity, Berlin
11%
RETAIL 3%
11% DISTRIBUTION BY STANDING ASSETS VS. PIPELINE
MARKET TYPE
Standing Assets Pipeline *
A Cities
100.0%
B Cities
22%
22%
C Cities 0 25 50 75 100
D Cities
Other
78%
The percentages relate to the average distribution by area in all the mega quarters included in this study.
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa * Due to their size and the long project durations, all mega quarters are classed as “pipeline”.
However, individual or multiple construction stages may already be complete, as in the case of HafenCity, Hamburg32
The definition of city quarter
SMALL-SCALE
QUARTER
AVERAGE SIZE: 16.785 sqm
Small-scale quarters are traditional quarters
on a smaller scale of up to 20,000 sqm GFA.
These quarters are also characterised by the
mix of uses typical of all quarters. Due to their
size, this type of city quarter can increasingly be
found in smaller cities.
OFFICE 24%
RESIDENTIAL 47%
EXAMPLES
l Huyssen Quarter, Essen
l Clemens-August-Quarter, Bonn
l Das Quadrat, Stuttgart
HOTEL 9%
RETAIL 16% 20%
24%
OTHER 4% DISTRIBUTION BY STANDING ASSETS VS. PIPELINE
DAYCARE. GYM, ETC. MARKET TYPE
Standing Assets Pipeline
A Cities
48.6% 51.4%
B Cities
15% 22%
22%
C Cities 0 25 50 75 100
D Cities
Other
24%
17%
The percentages relate to the average distribution by area in all the small-scale quarters included in this study.
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa34
The definition of city quarter
COMMERCIAL
QUARTER
AVERAGE SIZE: 50,376 sqm
The primary characteristic of a commercial
OFFICE 41% quarter is that its main use is of a commercial
nature (more than 90%). In most cases offices
RESIDENTIAL 1% are the dominant form of use. However, a mix
of uses by hotel or retail tenants, for example,
must also be present.
HOTEL 20%
EXAMPLES
l Macherei, Munich
l Schultheiß Quartier, Berlin
l Messe City, Colgone
13%
OTHER 22%
DAYCARE, PARKING, ETC. DISTRIBUTION BY STANDING ASSETS VS. PIPELINE
12% MARKET TYPE
Standing Assets Pipeline
A Cities
B Cities 48% 33.7% 66.3%
22%
6% C Cities 0 25 50 75 100
D Cities
RETAIL 16% Other
22%
The percentages relate to the average distribution by area in all the commercial quarters included in this study.
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa36
The definition of city quarter
RESIDENTIAL
QUARTER
AVERAGE SIZE: 56,430 sqm
Like the commercial quarter, the residential
quarter is defined by its primary use type (more
than 90% residential). Still, this category of city
quarter also requires a mix of uses to be present,
consisting mainly of retail and smaller office
RESIDENTIAL 97% units.
EXAMPLES
l MiKa Quarter, Dresden
l Wohnen am Nockherberg, Munich
l LindeQuarter, Wiesbaden
9%
RETAIL 2% 12%
DISTRIBUTION BY STANDING ASSETS VS. PIPELINE
MARKET TYPE
Standing Assets Pipeline
A Cities
18.9% 81.1%
B Cities
OFFICE 1% 12% 22% 55%
C Cities 0 25 50 75 100
D Cities
Other
13%
The percentages relate to the average distribution by area in all the residential quarters included in this study.
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa38
The definition of city quarter
VERTICAL
QUARTER
AVERAGE SIZE: 87,809 sqm
Vertical quarters are still the exception in
Germany, as they can sometimes be difficult
to implement for planning reasons and did not
appeal to users in the past. This situation has
changed over time. There is now greater demand
for mixed-use towers specifically, and the project
RESIDENTIAL 33% pipeline has seen significant growth. The very
nature of vertical quarters means that they are
mainly found in the major cities of Germany.
OFFICE 42%
EXAMPLES
l Upper West, Berlin
l The Four, Frankfurt
HOTEL 9% l Omniturm, Frankfurt
5%
DISTRIBUTION BY STANDING ASSETS VS. PIPELINE
MARKET TYPE
Standing Assets Pipeline
A Cities
9.5% 90.5%
OTHER 6% B Cities
22%
DAYCARE, GYM, ETC. C Cities 0 25 50 75 100
D Cities
Other
RETAIL 10%
95%
The percentages relate to the average distribution by area in all the vertical quarters included in this study.
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa40
Quarters of the past
4 QUARTERS
OF THE PAST
Since 2012, however, there has been a gradual
The response to the functional, planning- abandonment of the principle of functional
related and constructional problems of the new separation. Plans have been implemented to turn
housing estates was to make them even bigger the monofunctional office district into a mixed-
or to increase the building density. However, the use quarter and provide it with new qualities.
spatial separation between the workplace and the The process also included changing the name
home remained. of the transformed area, which is now known
as the Lyoner Quartier.
Over the course of time, the increasing preference
for single-family houses as a form of dwelling Mixed-use quarters therefore stand in stark
and demographic changes meant that these contrast to monofunctional structures.
Lyoner Quarter in Niederrad
developments gradually lost market value and
The functional separation was applied in evolved into socially disadvantaged areas. The development of the new city quarters
residential developments on the outskirts of began in the United States in the 1970s. The
cities in particular, in line with the garden city Some of these housing estates are still first examples included the development of
concept. This context also saw the Radburn stigmatised today. In other cases, however, The Cannery and the redevelopment of Ghirardelli
design concept being applied, with long narrow further alteration and planning measures have Square in San Francisco. Amenities including
residential buildings arranged at right angles to succeeded in halting the negative trend. The shops, restaurants and cafés were incorporated
After the Second World War, the focus in the thoroughfare. Märkisches Viertel in Berlin, for example, has into waterside historical industrial buildings.
Germany was initially on rapid reconstruction, been upgraded by enhancing the infrastructure, Today, Ghirardelli Square also features a 5-star
concentrating on the city centres and quarters The construction of these new housing estates redeveloping the neighbourhood shopping hotel and is a popular tourist attraction.
that had been destroyed in the war. involved re-using existing floor plans, designs centre and making other improvements.
and cost structures, sometimes resulting in The first new city quarters in Europe were
In the period that followed, the urban planning monotony and the loss of a spatial relationship An example of this separation of functions developed in the industrial cities of Manchester,
model was defined by the car-friendly, strictly with the city. in commercial property development is the Birmingham and Glasgow in the late 1970s.
zoned low-density city. This style of construction Niederrad office city, which was created in the The reurbanisation project in the Castlefield
is the complete opposite of urban block Usually located a considerable distance away 1960s and embodied the idea of an office city area of Manchester saw the creation of a
development. Promoted by renowned architects from the heart of the city, housing estates had in green surroundings. This business park in the quarter with attractive housing, office
such as Le Corbusier, new urban developments little to offer users apart from a flat or house and south-west of Frankfurt am Main was and still is complexes and leisure and cultural facilities,
separated the functions of the various use types. a view of the green surroundings. characterised by a variety of tower blocks. as well as a wide array of bars and restaurants.
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa42
Quarters of the past
LONDON
GREAT
ESTATES
oncepts similar to those of the modern city COVENT GARDEN,
A LOOK BACK AT THE HISTORY OF quarter can be found dating back to the early PART OF THE BEDFORD ESTATE
URBAN DEVELOPMENT history of urban planning. Georgian London,
for example, contained holistically planned
Estate development developments of districts and quarters in what
in Georgian London is today’s West End. Similar concepts were also
seen during the urban expansion in Germany in
the late 19th century, examples being Südstadt in
Cologne and Haidhausen in Munich.
The great urban expansions of the 17th century –
known in London as estate developments A remnant of this can still be clearly seen in the
– followed a pattern of urban density and a cityscape. Seven Dials – also an estate in London’s
pronounced mix of uses. The ground-floor units West End, and largely owned by Shaftesbury
were intended for use by retail businesses, pubs PLC – is clearly identifiable as being of the same
and restaurants. The upper floors were set mould. It is true that some of these estates have
aside for residential use by various sociographic gone through periods of decline in the course
cohorts. Meanwhile, the rear buildings were of history. Seven Dials, for example, has been
reserved for crafts and manufacturing, and euphemistically described by writers and poets
occasionally even for small-scale agricultural of several eras as a “problem district”. However,
purposes. Prominent examples of these estate it too experienced an impressive renaissance in
developments include Bedford Estate (where the 20th century. This example also shows how
Covent Garden Market is situated), Portland important holistic and sustainable planning is,
Estate and Grosvenor Estate – all in the West as Grosvenor Estate has never been an area of
End. social deprivation.
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa44
Quarters of the past
The beginning of modern quarter development in
Germany is marked by the MediaPark in Cologne.
In the late 1980s, a decision was made to create
a new city quarter for use by a pool of media
companies at the disused Gereon freight depot.
Various building complexes with a lettable are of
around 195,000 sqm, along with an expansive
park and a lake, were built on a site measuring
approximately 20,000 ha. The MediaPark building
complex was also designed
to be car-free above ground, with delivery traffic
and access via an underground ring road. The
individual buildings are connected to one another
by pedestrian walkways and a central square.
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa46
Quarters of the past
DR STEPHAN ANDERS
“ Certified quarters make
it possible to generate higher
income and increase acceptance
of the development among
”
OF THE GERMAN
the population.
SUSTAINABLE BUILDING
COUNCIL (DGNB)
SAYS: „ALONG WITH Dr. Stephan Anders,
SUSTAINABLE CITY Head of DGNB Certification
QUARTER DEVELOPMENT German Sustainable Building Council
The basic 1980s concept of city quarter IN GENERAL … (DGNB)
development has changed little since then. In
densely populated urban areas, the conversion
DIGITALISATION AND
of existing buildings or the construction of RESILIENCE HAVE BECOME
new buildings that are related to one another INCREASINGLY IMPORTANT
in urban planning terms creates a mix of uses
IN THE PROFESSIONAL
that produces synergy effects. However, the
development of city quarters is always closely DEBATE.“
related to the urban development models and the
requirements of the era.
Sustainability is an increasingly important
issue in all areas of the economy. Overarching,
integrated energy and mobility concepts that
are not possible for individual properties can
be realised at quarter level. For example, CO2-
neutral quarters are now being planned, such as
the Weststadt quarter in Esslingen, which also
takes the aspect of mobility into account. With
increased energy efficiency helping to reduce
operating costs in the long term, buildings
and ensembles with sustainability certificates
offer an opportunity to save money. The social
component of city quarters can result in increased
demand from tenants, which avoids vacancies
and secures rental income. Digitalisation also
makes it possible to improve a large number of
processes in city quarters relating to things such
as energy use, mobility, logistics and the flow of
goods.
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa48
How many city quarters
are there in Germany?
SUB-CATEGORIES OF QUARTERS
Mega quarter
5
Small-scale quarter
Traditional quarter
Commercial quarter
Residential quarter
HOW MANY
Vertical quarter
CITY QUARTERS ARE
THERE IN GERMANY?
METHODOLOGY
This study considers city quarter
developments in the Federal Republic
of Germany. The sources of the data
used include the bulwiengesa AG
property database, desktop research
and interviews with stakeholders in the
market. The sub-categories devised in
this study were used as a further criterion
for narrowing down data.
The period under consideration limits
the quarters to those with a construction
start date from 2009 onwards.
Throughout Germany, 616 quarters were
identified. The following presentation
shows the locations of the quarters
identified. The quarters are concentrated
in cities and conurbations. As expected,
THROUGHOUT GERMANY,
the larger quarters can be found in major 616 QUARTERS
cities. WERE IDENTIFIED.
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa50
How many city quarters
are there in Germany?
Grouped by the year construction started, Looking at area by completion date instead of Due to the size and complexity of many quarter
the number of quarters shows a rising trend, pure numbers produces a different result, with developments, the implementation times can be
having increased more than fivefold between the greatest areas set to be completed in 2023 significantly longer than for individual properties.
2010 and 2020. This highlights the increasing (almost 4 million sqm) and 2025 (around 5
significance of city quarters as an asset class. million sqm). This is down to the fact that larger As a result, only 29% of the 616 quarters
In 2021, construction work is expected to begin projects have a longer planning horizon than examined in the period under consideration from
on 112 quarters. It is quite plausible that the smaller ones. The Werksviertel in Munich is one 2009 onwards have currently been completed,
number of projects where construction is due of the major developments due to be completed with 27% currently under construction. Concrete
to start further in the future is decreasing. The in 2025. plans are in place for more than one-fifth of the
number of quarters completed also rises sharply concepts, with 23% in the ideas stage.
over the course of time and is set to peak at
88 in 2023.15 In many cases – especially with large-scale
quarters – completion takes place over a number
of construction phases. Completion windows
Number
therefore provide more indicative insights than
120 completion dates in this kind of development.
Commencement
100
Completion
80
60
40
20
0
΄09 ΄10 ΄11 ΄12 ΄13 ΄14 ΄15 ΄16 ΄17 ΄18 ΄19 ΄20 ΄21 ΄22 ΄23 ΄24 ΄25 ΄26 ΄27 ΄28 ΄29 ΄30 ΄31 / ΄40 ΄41
23%
29%
DEVELOPMENT STATUS
sqm
(million) Concept stage
6 Detailed planning
Residential
5 Office Under construction
4 Retail Completed 21%
Hotel
3
27%
2
1
0
΄10 ΄11 ΄12 ΄13 ΄14 ΄15 ΄16 ΄17 ΄18 ΄19 ΄20 ΄21 ΄22 ΄23 ΄24 ΄25 ΄26 ΄27 ΄28 ΄29 ΄30 ΄31 ΄40
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa 15 The number of quarters completed in the future may increase or decrease based on the nature of the project.52
How many city quarters
are there in Germany?
With more than 300 quarters identified, the
number of implemented and planned projects is
the greatest in category A cities.
Ninety-eight of the quarters are in category B NUMBER OF QUARTERS
cities, followed by 81 in C cities. The lowest BY MARKET TYPE
number is found in the D cities, with 54 quarters.
Seventy of the quarters examined are in locations 350
outside the market type categories. 300
250
200
150
100
50
5% 8%
7% 0
A B C D Other
DISTRIBUTION OF
QUARTERS BY SIZE (GFA in sqm)
< 20,000
TOTAL AREA
The essence of a city quarter is its mix of uses. 20,000–40,000
30% BY MARKET TYPE (SQM MILLION)
The ratio of individual uses within a quarter 40,000–100,000
is therefore of particular interest. Residential 100,000–200,000 49% 25
use is the predominant form, at 62%. Almost a
> 200,000 20
quarter of the spaces examined are used as
offices. Retail (8%) and hotel use (4%) play a
15
supplementary role in terms of space. Up to now,
use for logistics has been rather rare and only 10
found in a few instances.
What is noticeable in this analysis is that the 5
On average, a quarter has an area of around average sizes have remained relatively constant
60,000 sqm GFA, with about half of the quarters over time – there is no trend towards larger or 0
having an area of between 20,000 and 40,000 smaller quarters. Only the future projects with A B C D Other
sqm GFA. Almost one-third of the quarters have a long planning horizon deviate significantly
an area of 40,000 to 100,000 sqm GFA. Some from the historical average. According to current
7% of the quarters have a total area of between findings, the expected average size of quarters
100,000 and 200,000 sqm. Only 5% of the with a construction start date between 2023 and
quarters examined are larger than 200,000 sqm. 2025 is 125,000 sqm GFA.
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa54
How many city quarters
are there in Germany?
A comparison of the various market types
reveals clear differences in the distribution of the
individual use types. For all market types,
residential use accounts for the biggest category
D cities 1%
A comparison of surface areas reveals a similar 5% 4%
4%
7% picture to the number of quarters. 7%
10%
The highest proportion of office use is in A cities,
A CITIES B CITIES
at 26%, followed by B cities with 22%. The lowest
share of office use is in D cities. In all market Residential Residential
types, retail is the third most common type of use. Office Office
The figures for area usage compared with market
26% Retail Retail
type do not reveal any clear trend, however. 22%
Hotel Hotel
62% 60%
In the cities in the study, hotels had roughly the Logistics Logistics
same share of area (4% to 5%).
2%
4% 4% 8%
4%
6% 12%
C CITIES D CITIES
Residential Residential
17%
Office 12% Office
Retail Retail
Hotel Hotel
Logistics 69% Logistics 70%
The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa56
Wie viele Stadtquartiere
gibt es in Deutschland?
Based on an approximation of the capital values In terms of quality, the quarters studied
of the individual quarters, the estimated market represent all types of residential area. To
MARKET SIZE FOR QUARTERS size of the quarters identified amounted to almost a large extent, quarters are realised in the
BY CITY AND MARKET TYPE 16 EUR 200 billion as of 2020. This study reveals that “average” to “good” categories. Around 10%
the focus of the market in terms of city quarters of the quarters are in an “excellent” area.
Capital value is on the category A markets. Munich, Berlin, “Basic” areas account for a very small share
in EUR billions
Hamburg and Frankfurt have the highest figures of the total.
60 due both to the number of projects and the high
50 capital value parameters.
40 At over EUR 30 billion, however, the market for B A newly built quarter, often replacing a brownfield
30 to D cities is of a very appreciable size. Averaged site or “underused” building, may well have a
out across the individual quarters, this equates to positive effect on the quality of the residential
20 almost EUR 134 million each. area itself. Once the quarter is complete, some
10 locations experience a positive development
due to increased provision of restaurants and
0 bars, retail outlets, social infrastructure and jobs.
In this case, the quarter not only has an impact
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surrounding area. This is a welcome effect from
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The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa 16 Approximation of market size from capital values of individual cities or market types. Calculation based on data from Riwis, bulwiengesa;
no calculation was made for quarters outside the A to D markets (approx. 3 million sqm GFA) due to a lack of reliable data.You can also read
