New Basic Study on Urban Quarters

New Basic Study on Urban Quarters


Background
04.06.2021 Author/s: Felix Embacher, Dr. Maximilian Schlachter

The urban quarter has become an important component of modern urban planning. And a 200 billion euro market that offers enormous potential for investors and developers, not least due to megatrends such as urbanisation or sustainability. With Corestate, we have for the first time compiled a compendium of German urban quarters and provide an overview here.

Of course, urban districts are not a new invention. They have always been an element of sustainable urban development, even if for decades urban development models prevailed that propagated the car-friendly, structured and dispersed city and the resulting functional separation of individual types of use stood in stark contrast to the idea of city districts.

In the meantime, city districts have even established themselves as an asset class and investment product. However, there has been a lack of structure and definitions as well as an overview of all German quarters that would allow further analyses.

The study "Urban Quarters - The Asset Class of the Future" aims to close this gap. It systematically records, categorises and evaluates all modern city districts with construction starts from 2009 to 2020, including projects under construction or in planning. Corestate and bulwiengesa have identified 616 city districts, corresponding to a market size of approximately 200 billion euros.

City districts combine private and public space. City districts point to the future of urban living and working. They are a response to megatrends such as urbanisation, demographic change, sustainability and digitalisation. In addition, as mixed-use and redensification concepts, they serve the needs of different actors in a sustainable form, such as urban planners, commercial and private tenants and investors.

As compact, mixed-use urban units, urban quarters are also important as ESG-appropriate concepts, precisely because they are often revitalisation and redensification concepts. The mixed-use quarters have also proven to be a successful model in times of COVID-19, as many city quarters combine the concepts of supply, social services and work in a dense space.

A classic quarter is Munich's Werksviertel, here the award-winning "Werk 12". The new district has been built on the site at the Ostbahnhof.

The six neighbourhood types

The grouping makes it possible to show clear differences in the distribution of the neighbourhood types at the macro level. For example, mega-quarters and vertical quarters are found almost exclusively in A-markets, while small and residential quarters are much more evenly distributed across German cities. Overall, half of all city quarters are in B-, C- as well as D-, and in some cases even smaller markets. 71 percent of the analysed quarters are currently under construction or still in the planning phase - a sign of the high importance of the asset class in the future. The study also shows that it is worthwhile for investors and project developers to look beyond the A-markets. The investment spectrum is very diverse and broad.

 

1. Classic quarter

Average size: 56,966 sqm

A classic city quarter is defined as all quarters with a total area of between 20,000 sqm and 400,000 sqm GFA (gross floor area) that do not fall into any other quarter typology (primarily commercial quarter or residential quarter). Classic quarters are characterised by a high mix of uses. With over 300 identified neighbourhoods, it is the most common form of subcategory.

Example quarters:

  • Werksviertel, Munich
  • The Q, Nuremberg
  • Laurenz Carré, Cologne
  • Glückstein Quarter, Mannheim

 

2. Mega quarter

Average size: 587,154 sqm

Mega-quarters are large-scale urban development and neighbourhood measures with a total size of over 400,000 sqm GFA. As a rule, mega-quarters are developed in several construction phases and the development period can extend over ten years or more. Mega-neighbourhoods are very mixed, often with a high commercial share. Due to their size, mega-quarters can have a city-shaping effect.

Example quarters:

  • Stuttgart 21, Stuttgart
  • HafenCity, Hamburg
  • EuropaCity, Berlin

 

3. Small quarter

Average size: 16,785 sqm

Small quarters are classic quarters on a smaller scale: up to 20,000 sqm GFA. Small quarters are also characterised by the mix of uses typical of a quarter. Due to their smaller size, these urban quarters are also increasingly found in smaller cities.

Example quarters:

  • Huyssen Quarter, Essen
  • ClemensAugustQuartier, Bonn
  • Das Quadrat, Stuttgart

 

4. commercial quarter

Average size: 50,376 sqm

Commercial quarters are characterised above all by the fact that the majority of the use (>90 %) is of a commercial nature. Although offices are the dominant form of use in most cases, there must also be a mix of uses here, for example hotel or retail.

Example quarters:

  • Macherei, Munich
  • Schultheiß Quartier, Berlin
  • Messe City, Cologne

 

5. Residential quarter

Average size: 56,430 sqm

Congruent to the commercial quarter, the residential quarters are clearly characterised by residential use (>90%). However, this type of neighbourhood also has a mix of uses. This consists mainly of retail and smaller office units.

Example neighbourhoods:

  • MiKa Quarter, Dresden
  • Wohnen am Nockherberg, Munich
  • Linde Quarter, Wiesbaden

 

6. Vertical quarter

Average size: 87,809 sqm

Vertical quarters are still an exception in Germany, as they are sometimes difficult to implement in terms of planning and have not met the tastes of users in the past. This has gradually changed, so that distinctly mixed-use towers are more in demand and the project pipeline has increased significantly. Due to their special nature, Vertical Quarters are mainly found in Germany's major metropolises.

Example quarters:

  • Upper West, Berlin
  • The Four, Frankfurt
  • Omniturm, Frankfurt

 

In addition to the subcategories mentioned, further special categories can be derived, such as the technology or innovation quarter. This usually has a campus character and is located in the context of universities and research institutions. A prominent example would be the Adlershof quarter in Berlin.

The location within the respective city is another categorisation criterion. The location results in requirements and framework conditions for the respective project concept.

 

Note: The 70-page study can be downloaded from the Corestate Capital Group website.

Contact persons: Felix Embacher, Head of Data Science & Research, embacher [at] bulwiengesa.de and Dr Maximilian Schlachter, Project Manager at bulwiengesa, schlachter [at] bulwiengesa.de