HafenCity scheme set to transform Hamburg’s property market

While Munich, Frankfurt and Berlin have been the focus of recent reports on Germany’s residential real estate boom, Hamburg, the country’s second most populous city with 1.8m residents, has kept a low profile.

HafenCity, a scheme to rebuild 157 hectares of decommissioned harbour space, is changing all that. When complete, this mixed-use project, on a previously fenced-off site that few locals visited, will increase the size of the city centre by up to 40 per cent.

“This is a huge chance for Hamburg,” says Susanne Bühler, communications director of HafenCity. “The old harbour is very centrally located and is under a kilometre from the town hall and just three or four minutes away by underground railway.”

By 2025 it is expected that HafenCity will have 12,000 residents, with 45,000 people working in the district. For the moment 2,000 people live there, some in stunning apartment blocks with views of the river Elbe where property changes hands for more than €10,000 per sq metre. A prime example is the Marco Polo Tower. On the water and close to Unilever’s ship-like German headquarters, its rounded, slightly irregular contours bring to mind the leaves of a plant. Here, an 11th-floor apartment with three bedrooms and two bathrooms, spread over 116 sq metres of living space – plus a terrace, a single underground parking space and concierge service – is on sale for €1.39m through Dahler & Company.

There is a surprising variety of architectural styles in HafenCity, due in part to the fact that few buildings in the district were considered worth preserving, so the great majority of construction is new.

Another reason concerns the specific tendering process decided by the city authorities. “Building plots are not sold to the highest bidder,” says Bühler. “Prices are fixed . . . the most convincing concept wins.”

In all, 56 building projects have been completed and 49 are under construction or being planned. One that is almost ready for delivery is a specially designed apartment block called the Musikerhaus, containing soundproofed units for musicians, so they can practise without disturbing their neighbours.

However, to the chagrin of many Hamburgers, the new Elbphilharmonie concert hall at the western tip of HafenCity – which it is hoped will provide a new focal point for the city – has been delayed and is running over budget. The first concerts are likely to be performed in 2017.

The concert hall building, designed by Swiss architectural firm Herzog & de Meuron (which converted London’s Bankside Power Station to house the Tate Modern) will also contain a hotel and about 45 high-end apartments.

The expectation is that HafenCity will breathe new life into central Hamburg. The core of the city is buzzing during the working day – this is Germany’s traditional home of print media – while the high-end shopping district around Neuer Wall, with its streets spread out over a lattice of canals and bridges, is one of the most elegant in the country. But like many other German cities, Hamburg’s postwar reconstruction favoured a strict separation of functions, with dormitory suburbs located at a distance from the city centres where people worked and shopped. Even today, only about 14,000 people live in Hamburg’s historical centre but demand for housing there has become intense.

“Almost as soon as we deliver [housing units], they are taken out of our hands,” says Quentin Sharp, a member of the managing board of Deutsche Immobilien, the property developer behind the Stahltwiete housing scheme, a low-rise development about 5km from the city centre. According to Sharp, three-quarters of the 127 units were sold before construction began. A 103 sq metre, two-bedroom penthouse apartment at Stahltwiete is available for €527,000, with delivery in 2016.

Although English and other western European languages are heard less frequently on its streets than in Berlin or Frankfurt – and Hamburg may appear much less cosmopolitan than the capital – Sharp says the city has “great German flair”.

“It’s a huge economic magnet for the north of the country and functions as a port of entry for much of Scandinavia,” says Sharp, who was born and raised in Cornwall but has lived in Germany since 1988.

Partly as a result, the city has calculated that it needs to build 6,000 new housing units a year to keep pace with demand.

According to the German Real Estate Association, the average used two-bedroom apartment in Hamburg (including units sold with long-term tenants) costs €1,900 per sq metre, up 8.6 per cent over the course of 2013. Using the same methodology the same unit would cost €1,550 per sq metre in Berlin (up 6.9 per cent in 2013) but considerably more in Munich (€3,150 per sq metre, up 10.5 per cent).

“Even with the increase in prices in the last few years – some of which have been steep – Germany’s property market is very stable and has none of the volatility of some other European countries,” says Sharp.

Hamburgers enjoy the outdoor life: the centrally located Alster Lake is full of sailing boats in the summer months and sometimes skaters during the winter.

Some of Hamburg’s most expensive homes are on the shore of the lake or in the smart residential districts to the north known as the Alstertal.

For example, a Bauhaus-style villa on a 2,286 sq metre plot in Hummelsbüttel – an area convenient for the city’s international airport – with 316 sq metres of living space containing three bedrooms and two bathrooms is on sale for €2.95m through Engel & Völkers.

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Buying guide

● Property transfer tax is 4.5 per cent of the sale price. Buyers usually need to budget 6.25 per cent for an estate agent’s commission

● Hamburg is about 1 hour and 40 minutes from Berlin by train

● The city has about 2,500 bridges – more than Amsterdam, Venice and London combined

● Winters are cold and blustery and the proximity of the North Sea means it can be cool in the summer

What you can buy for . . .

€250,000 A two-bedroom apartment close to the city’s main park

€1m A two-bedroom off-plan apartment in HafenCity

€5m A new four-bedroom apartment overlooking the river Elbe in Othmarschen, with a three-car garage