© The Financial Times Ltd 2016 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
May 23, 2014 6:50 pm
A quick glance at Stuttgart’s main station (Stuttgart Hauptbahnhof) leaves no doubt that the city is changing. And it is changing rapidly: diggers tear down the roof of the former station building, chainsaws cut down old trees and spring birds are drowned out by the noise of jackhammers. All this is part of Stuttgart 21, a major building project which will transform the city’s historic main station into a high-tech underground hub, offering speedy rail links from Paris to Budapest via Stuttgart. Yet the project – the city’s biggest rail expansion since the 19th century – has been widely and fiercely criticised. Concerns include the cost – estimated at €6.5bn – environmental impact and duration of the project.
Stuttgart is Germany’s sixth city and the capital of the state of Baden-Württemberg. With a population of just under 600,000 and a rich cultural scene, it strikes a balance between feeling cosmopolitan and cosy. With its wine bars, boutiques and narrow cobbled streets, the historic Bohnenviertel (Bean quarter) is a handsome example of both.
Just north of the city centre, the new Europaviertel (European quarter) – part of Stuttgart 21 – is taking shape. Restaurants, offices and apartments have sprung up, as well as Cloud No 7, an 18-storey skyscraper with 26 flats, 25 serviced apartments and two penthouses with 500 sq metres of living space. Cloud No 7, which is set to be completed by 2015, also contains a hotel operated by the Steigenberger group.
Farther north, but still within easy reach of the centre, another quarter, the Killesberghöhe, is being built independently of Stuttgart 21. British architect David Chipperfield has been tasked with developing a five-storey apartment building in the area. The three-bedroom penthouse features 270 sq metres of living space, three-metre ceilings, parquet flooring with underfloor heating and an additional 140 sq metre rooftop with a private pool. It is on sale for €3.45m, through Fürst Developments.
Chipperfield’s minimalist, white stone façade fits well with the style of the nearby Weissenhof housing estate, designed in 1927 by architects Ludwig Mies van der Rohe, Le Corbusier and Walter Gropius, among others. Weissenhof attracts about 30,000 lovers of architecture each year. Adjacent to the Kräherwald forest, in the nearby Robert-Bosch-Straße, a 1933 mansion with 10 rooms over 300 sq metres is on sale for €2.45m through Huber Immobilien.
In the local housing market, demand for real estate outstretches supply, leading to steep prices for both sales and lettings. In its latest market report, estate agency Engel & Völkers saw rental prices reach as high as €18.30 per sq metre. Meanwhile, a report by property firm Jones Lang LaSalle found house prices rose by 16.7 per cent in the second quarter of 2013 compared with the previous year. This means that in Stuttgart’s most desirable areas – known as the Halbhöhenlagen, a generic term for the city’s hillside areas – properties can sell for as much as €11,000 per sq metre.
While many buyers are owner-occupiers looking for large family houses, the financial crisis saw demand in property as an investment alternative rise to €500m in 2010, as investors looked for safe places to park their money. This was an increase of 60 per cent compared to the previous year, according to the German Real Estate Association (IVD). In 2011, another €500m was invested, and in 2012, transactions rising up to €1.6bn were registered. Most of this money is still local: “Generally speaking, Stuttgart’s investment market is dominated by German investors,” says Sebastian Grimm, a team leader at Jones Lang LaSalle. “Only very few foreign investors are active on the market.”
Despite Berlin’s recent popularity – real estate transactions reached €12.75bn in 2012, with foreign investors accounting for 76 per cent of these transactions, according to the IVD – prices in the capital are modest by international standards. In Stuttgart, however, low interest rates and a shortage of properties have meant that average property prices have risen by almost 40 per cent in the past five years. Yet according to the IVD, only 1,602 flats were built in the city in 2012. Stuttgart’s hilliness makes it difficult for developers to find suitable building space. In past years, developments have largely taken place in the suburbs, where building space is more plentiful. Thanks to the removal of the overground railway tracks, Stuttgart 21 is creating new building space in the city centre, where developers could previously only use already existing commercial space for residential occupation.
The nationwide property firm BBT AG is doing just that: it specialises in acquiring and restoring derelict commercial and residential property, instead of replacing it with uninspiring condominiums. In doing this, the historic cityscape is maintained. “Such projects – which require careful planning and substantial refurbishment – may not necessarily solve Stuttgart’s housing problems,” Kathleen Guhr, the company’s chairwoman, says. “But it’s an opportunity to show both owner-occupiers and investors that revitalising commercial property by turning it into residential property brings a lot of potential.”
BBT AG is restoring the former Rotenwald hotel in a western hillside area. While the exterior façade is being preserved, the interior is being refurbished offering the future owner parquet flooring with underfloor heating and floor-to-ceiling windows. There is also additional parking space, a rarity in this congested part of town. The penthouse has two bedrooms across 185 sq metres and comes with a rooftop terrace and several balconies. It is on sale for €1.5m and will be completed by the end of the year.
● Stuttgart is a one-hour flight from Berlin and London
● Property tax in Germany is based on land value, which at present is set at 5 per cent in Baden-Württemberg
● Stuttgart is home to several multinational companies, such as IBM
What you can buy for . . .
€500,000 A one-bedroom maisonette in a 19th-century, art nouveau building in a hillside area
€1m A two-bedroom maisonette in the Frauenkopf area, with views over the nearby forest
€2m A large mansion with 12 rooms in the Gänsheide area, close to the city centre
Copyright The Financial Times Limited 2016. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.