CITY QUARTERS AN ASSET CLASS OF THE FUTURE

Assessing the modern city quarter landscape in Germany The Asset ClassoftheFuture –CORESTATE Capital Group | bulwiengesa of the21stcentury. era and gohand in hand with many megatrends also reflect of our thespirit quarters space. City demand ­meeting forhousing and an integrated approach to urban design with and inhabitants,their users as they ­ are popular among Atquarters city same time, the climate efficiency, to name justa few examples. greater to achieve efforts boost and sites field the compact city model, give newlife to brown­ desirable for a number of reasons. They round off From aplanning point of view,are quarters city in starkcontrastto theideaofacityquarter. ­separation of theindividualof usestands types ­zoned and The resultinglow-density cities. ­development promoted car-friendly,strictly the ­urban development. For decades,however, they have always been an element of are not a new invention.City quarters In fact, and more interest from thereal estate industry. modern urban planning and are attracting more roleplay an extremely in important quarters City ­prevailing conceptual models in urban FORE WORD ­commercial ­sustainable combine Group HeadofResearch CORESTATE CapitalGroup Mark Holz Happy reading! your assetclass. interest inthecityquarter sharethoughtsour withyou and hope to pique We are delighted to to have thisopportunity their impactonthesurroundings. ­variousand characteristics functions, as well and discuss their ­sub-types of cityquarters will we basis, in this On stages. planning the or development under currently projects all in Germany with a focus on the recent past and arecreating areliableofmodern city list foundation­strategic Wefor subsequentworks. the provide on will and ofpublications quarters city of subject the aseries in first the is This and standard reference work. universe in thiscomprehensive quarter city paper ­teamed upto take lookat­ asystematic CORESTATEand bulwiengesahave therefore and Conversion Projects Head ofMasterPlanning bulwiengesa Felix Embacher Germany's

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CONCLUSION IN GERMANY? QUARTERS HOW MANY CITY OF THEPAST QUARTERS CITY QUARTER THE DEFINITION URBAN DEVELOPMENT THE FUTUREOF CITY QUARTERS OF THE THE BASICCONCEPT CITY QUARTER ARETHERE

4 The basic concept of the city quarter

THE BASIC CONCEPT 1OF 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 Living 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 Strong and positive self-identity FELDMANN 6 l Robust urban structure that provides a differentiation by type. The and outside perception l Unique appearance term, which comes from French or Latin, was l Balanced social structure of users l Intact local supply infrastructure ­originally used todenote part of an army camp. In literature, different approaches can be found l High 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 BBSR7 l More than 500 dwellings, l Planned using a homogeneous processes in the urban environment and is social life. l 1,000 residents and/or 10 ha urban design concept now generally applied to mixed-use or urban 2 development projects. The directly related term SCHNUR , 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 in general. no specifically quantitative classification. 5 Feldmann, Philipp. Die strategische Entwicklung neuer City Quartere. In: Schriften zur Immobilienökonomie Band 53. 2009 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 CREATE A ’15-MINUTE CITY‘ consists of the following main types of use: 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 11 the development of inner-city quarters. It goes complemented by additional forms which can be A ’5-MINUTE QUARTER‘. 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 cultural­ 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 Retail facilities complement them 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

CITY QUARTERS AS THE FUTURE OF URBAN DEVELOPMENT 2 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 due for development vision and guide. 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 the compact city, and they quarters. housing and contribute to mixed-use cities, the “ 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 – in both a social and an interest in concepts like these represents the first of one of the first city quarters is planned for the 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

Society is shaped and altered through long-term processes of change which can be described as megatrends. These processes affect individuals, society in MEGA 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.

TRENDS 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 CONNECTIVITY NEW WORK Enormous amounts of knowledge are being aspect of daily life, from organic shopping and 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. 2018 20 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 | bulwiengesa 22 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 The modern city quarter aims to meet the In the area around Berlin’s Tegel airport, the Urban laid now. A climate-neutral quarter will have a childcare options. challenges of the present and the future. Tech Republic project and the neighbouring zero overall balance of monitored CO2 emissions. 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 13 Schuhmacher quarter, the concept will also concepts that would not be feasible for individual OF QUARTERS“ 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, 26.08.2020 24 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 SPIRIT OF THE TIMES AND In this context, there are various initiatives that 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 IN URBAN PLANNING those involved locally in the development of city high.. By the same token, integrating alternative 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

THE DEFINITION OF THE STUDY USES CITY QUARTER THE FOLLOWING 3 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 Vertical Mix from core use types to the city centre with a high level of building the commercial quarter. 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 | bulwiengesa 28 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 bulwiengesa 30 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 B Cities 100.0% 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, Hamburg 32 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 B Cities 48.6% 51.4% 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 | bulwiengesa 34 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 | bulwiengesa 36 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%

12% RETAIL 2% DISTRIBUTION BY STANDING ASSETS VS. PIPELINE MARKET TYPE Standing Assets Pipeline A Cities B Cities 18.9% 81.1% 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 | bulwiengesa 38 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 B Cities 9.5% 90.5% OTHER 6% 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 | bulwiengesa 40 Quarters of the past

QUARTERS 4 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 | bulwiengesa 42 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 | bulwiengesa 44 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 | bulwiengesa 46 Quarters of the past

Certified quarters make it possible to generate higher “income and increase acceptance DR STEPHAN ANDERS 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 | bulwiengesa 48 How many city quarters are there in Germany?

SUB-CATEGORIES OF QUARTERS

Mega quarter Small-scale quarter Traditional quarter Commercial quarter HOW MANY Residential quarter CITY QUARTERS ARE Vertical quarter 5 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 | bulwiengesa 50 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 therefore provide more indicative insights than Number 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 quarter of the spaces examined are used as 20 offices. Retail (8%) and hotel use (4%) playa 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 | bulwiengesa 54 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%

4% A comparison of surface areas reveals a similar 5% 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% 4% 8% 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 | bulwiengesa 56 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, in EUR billions “Basic” areas account for a very small share 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. DISTRIBUTION In this case, the quarter not only has an impact Berlin Munich Cologne Stuttgart BY RESIDENTIAL LOCATION within itself, but also radiates its benefits to the Frankfrut Hamburg B markets C markets D markets Dusseldorf surrounding area. This is a welcome effect from 25% an urban planning point of view. 20%

15%

10%

5%

0%

basic good average excellent basic to Ø Ø to good

good to excellent

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. 58 How many city quarters are there in Germany?

SHARE BY FOOD RETAIL DENSITY by local shopping amenities within walking distance in sqm)

% 40 35 30 25 20 15 10 5 0

<450 >20,000 450–1,500 1,500–2,5002,500–3,5003,500–5,0005,000–7,000 7,000–12,000 12,000–20,000

The density of food retail outlets reveals that the majority of the quarters studied offered excellent DISTRIBUTION local shopping amenities. On average, a sales area BY PURCHASING POWER of 13,300 sqm is within walking distance. % 50 In terms of local shopping, the model quarter of 7% 4% short distances is a reality. 40 The dominant building factor describes the type 30 of building in the area in which the quarter is A study of local purchasing power reveals an located. Quarters in an area with predominantly average value of 106. Fewer than half (43%) the 20 large multifamily houses (MH) are the most DOMINANT BUILDING STRUCTURES quarters studied are located in an area with a 10 common and account for 46% of the total. Of the purchasing power below the German index value quarters studied, 38% are in an area where small SFH/DH 0 of 100 points, with 53% being above it. However, multifamily houses predominate. This shows the Small MH it should be noted that the figures for quarters urban nature of quarter development. 27% 60–80 26% Bigger MH being built on regeneration sites have only limited 80–100 100–120 120–140 140–160 160–180 significance. In fact, the purchasing power created As expected, only a small proportion of quarters Commercial use Purchasing power index: in the quarter probably also benefits the wider avg. income = 100 are located in areas where single-family and duplex surrounding area. houses (SFH/DH) are dominant, with 12% found in areas that are primarily used for commercial purposes. In these locations, the share of non- residential space in the quarters, at 65%, is much higher than the overall average for Germany.

The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa 60 How many city quarters are there in Germany?

The maps of selected cities below show the individual quarters and quarters under development in relation to their size. The category of the surrounding residential areas is illustrated for context.

In terms of the individual cities, a heterogeneous picture emerges of the distribution of the quarters within the area of each.

Subcategory Quarter Subcategory Quarter

Traditional quarter Traditional quarter

Commercial quarter Commercial quarter

Mega quarter Mega quarter

Small-scale quarter Small-scale quarter

Residential quarter Residential quarter

Vertical quarter Vertical quarter

Total floor space (sqm) Total floor space (sqm)

● > 200.000 ● > 200.000 ● 100.000 - 200.000 ● 100.000 - 200.000

● 40.000 - 100.000 ● 40.000 - 100.000

● 20.000 - 40.000 ● 20.000 - 40.000

● < 20.000 ● < 20.000

Residential Areas Residential Areas

very good very good

good to very good good to very good

good good

Ø to good Ø to good

Ø Ø

basic to Ø basic to Ø

basic basic

In Munich there are no quarters in the immediate city centre – with only one exception. This may be because there is no land available for this type of development. Apart from the centre, the The Werksviertel quarter near Munich East station In Berlin the quarter developments are quarter developments are distributed across is just below the size threshold for a mega quarter, distributed across the whole of the city. Near Outside the centre, the quarters are more the whole of the city. In the north and west, two with a total area of 390,000 sqm. However, it will the Kufürstendamm and Alexanderplatz, there concentrated around districts such as mega quarters are being built: the Bayernkaserne certainly have many characteristics in common are more vertical quarters. Lichtenberg, Treptow-Köpenick and Spandau. and Freiham. with larger examples.

The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa 62 How many city quarters are there in Germany?

Subcategory Quarter Subcategory Quarter

Traditional quarter Traditional quarter

Commercial quarter Commercial quarter

Mega quarter Mega quarter

Small-scale quarter Small-scale quarter

Residential quarter Residential quarter

Vertical quarter Vertical quarter

Total floor space (sqm) Total floor space (sqm)

● > 200.000 ● > 200.000 ● 100.000 - 200.000 ● 100.000 - 200.000

● 40.000 - 100.000 ● 40.000 - 100.000

● 20.000 - 40.000 ● 20.000 - 40.000

● < 20.000 ● < 20.000

Residential Areas Residential Areas

very good very good

good to very good good to very good

good good

Ø to good Ø to good

Ø Ø

basic to Ø basic to Ø

basic basic

In Cologne traditional quarters dominate, with The skyline of Frankfurt am Main is unique in examples in the city centre and in other areas Germany. This also explains why the city has the of the city. The quarters in the centre tend to be most vertical quarters by far. The vertical quarters in one area, unlike in Berlin and Munich. In the small-scale quarters. Quarters in a residential On the right-hand side of the Rhine, most quarter are in a central location in the banking district Ostend district, there are traditional city quarters, area classified as “excellent” can be found in the developments are concentrated in the Mülheim near the Messe Frankfurt exhibition centre. The with both purely residential quarters and the Rodenkirchen district in the southern part of the district of the city. No examples of a vertical or a quarter developments are highly concentrated traditional type located in the west of the city. city, on the left side of the Rhine. mega quarter could be identified in Cologne.

The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa 64 Stadtquartiere – Ein städtisches Konzept der Zukunft

CITY QUARTERS – AN URBAN CONCEPT 6 FOR THE FUTURE

City quarters reflect the current needs of users and investors. This is evident not only from the increasing number of quarter developments, but also in the context of current megatrends.

As long-term processes of change, these developments shape both the individual and When designing a quarter, there is a broad society as a whole. They also influence the spectrum of potential combinations of uses that real estate sector. Current challenges such as need to be adapted to the relevant framework sustainability, mobility and social issues can conditions. The dominant use type is residential best be met with an overarching concept, which supplemented by office space. Different accents is easier to plan and implement at the level of a can be set in a quarter through the introduction quarter than through individual buildings. of other complementary types of use. For investors, this variety of uses is a relevant factor, With their close links between home and work, and not just because the attractiveness of a quarter between social and cultural functions, quarters bolsters the level of demand from tenants, but are prime examples of the compact city concept. also because sector diversification within an Because quarters are frequently created as part investment reduces risk. of the regeneration process of brownfield sites, they also promote urban consolidation, provide A city quarter links the interests of investors and new housing for various social strata and create project developers with those of the community jobs. This is often associated with radiating and tenants in an ecologically sustainable way. It positive benefits to the surrounding areas –a will therefore remain a successful concept in the concept that is encouraged and required by the future, as the continuing strength of the pipeline community. demonstrates.

The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa 66 Danksagung & Kontakt ACKNOW- LEDGE- MENTS

AUTHORS CONTACTS Special thanks to our interviewees, who provided their expertise to make a significant contribution to this study. CORESTATE: CORESTATE: Sabine Georgi Mark Holz Nils Hübener Philipp Ellebracht Country Manager RICS Group Head of Research Chief Investment Officer (CIO) Group Head of Sales +49 69 3535 6302 33 +49 69 3535 6302 85 +49 69 3535 6302 42 Karin Groß [email protected] [email protected] [email protected] Head of Real Estate Capital Investment Portfolio Management/Commercial Tobias Gollnest Charles Smith bulwiengesa: Management Group Head of Investment Head of Key Client Relations Ärzteversorgung Westfalen-Lippe Dr. Maximilian Schlachter +49 69 3535 6302 28 +49 69 3535 6301 33 Project Manager [email protected] [email protected] Dr. Stephan Anders +49 89 2323 7649 Head of DGNB Certification [email protected] Maximilian Lieser Anne Zeller Vice President Investments Group Head of Product Development +49 69 3535 6301 96 +49 69 3535 6301 35 [email protected] [email protected]

bulwiengesa: Felix Embacher Head of Master Planning and Conversion Projects +49 89 2323 7622 [email protected]

The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa 68 Disclaimer

CORESTATE DISCLAIMER

This document has been prepared for general information purposes only and is not addressed to consumers. It does not constitute an offer fairness. Neither the Company nor any of its or invitation to sell or issue, or to purchase or directors, officers or employees or any other subscribe any shares in funds, securities or person makes any warranty or gives any guarantee, financial instruments, or any other shareholdings neither express nor implied, as to the accuracy in or distributed by CORESTATE Capital Holding or completeness of the information contained in S.A. or any other company of the CORESTATE this document, and accepts no liability for loss Capital Group (hereafter collectively referred to or damage of any kind in connection with this Data sources as the “Company”). No part of this document document, unless caused by gross negligence or nor the fact of its distribution be or form part of intent of the Company and unless standing in a Unless otherwise specifically indicated, or be relied on in connection with any contract causal connection to the potential damage. The the source of all data is bulwiengesa or CORESTATE or investment decision relating thereto, nor does information is subject to change at any time (even it constitute a recommendation regarding the without notification to the recipients). securities or the shares in funds or other financial instruments of the Company or of another entity. This document is not a financial analysis or Image sources Therefore, this cannot be deemed as financial a prospectus. The information and opinions services, investment advisory services, an offer for expressed in this document are provided as of the Page 3, 5, 11, 28–39, 47–59, 65 the acquisition of a financial instrument or general date of this document. Certain statements, beliefs CORESTATE Capital Group GmbH investment advice, legal or tax advice. and opinions in this document, are forward-looking, The Company does not undertake any obligation which reflect the Company’s or, as appropriate, the to update or revise any forward-looking Page 7, 8, 13–24, 45, 47 The data and information contained herein has Company’s directors’ current expectations and statements. You should not place undue reliance elements.envarto.com been obtained from various sources is believed to projections about future events. By their nature, on forward-looking statements, which speak only be reliable and accurate. All data and information forward-looking statements involve a number of as of the date of this document. No statement in Page 44/45 derive from sources which the Company believes risks, uncertainties and assumptions that could this presentation is intended to be nor may it be MediaPark Köln Entwicklungsgesellschaft mbH to be reliable. Furthermore, the Company has used cause actual results or events to differ materially construed to be a profit forecast. By attending the its best endeavors to ensure that the presented from those expressed or implied by the forward- presentation to which this document relates or by Page 50–62 facts and opinions are adequate and correct. looking statements. These risks, uncertainties and accepting a copy of this document you agree to be openstreetmap cc-by-sa, bulwiengesa AG Forward-looking statements and statements are assumptions could adversely affect the outcome bound by the foregoing limitations and, in particular based on current estimates, expectations and and financial effects of the plans and events that you have read and agreed to comply with the Page 40 forecasts of the Company regarding market and described herein. Forward-looking statements contents of this notice. Standort-Initiative Neues Niederrad e.V. industry developments at the time of preparation. contained in this document regarding past trends Nevertheless, no reliance may be placed for any or activities should not be taken as a representation This document was produced by CORESTATE Page 45 purposes on the information contained in this that such trends or activities will continue in Capital Investors (Europe) GmbH, a company of Covent Garden Market, image © London document or on its completeness, accuracy or the future. the CORESTATE Capital Group, on 3 May 2021. Metropolitan Archives (City of London)

The Asset Class of the Future – CORESTATE Capital Group | bulwiengesa