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Top Five major urban development projects in Europe
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Top Five major urban development projects in Europe

In the era of hipsterism, the unpolished charm of Europe's post-industrial heritage has given rise to a vanguard of promising neighbourhoods in London, Copenhagen, Paris, Berlin and Hamburg. These once reviled red brick and cement districts are now target number one for gentrification and their towering chimneys are fast becoming beacons for Europe’s new business and cultural hubs.

In the context of general eurozone real estate market recovery, Europe's biggest cities are enjoying heightened investments from overseas, but investors must battle with high demand and dense development in urban areas. Construction opportunities are often limited, especially in city centres and most developments sell out before completion. In order to avoid spiking property pressure, investors with long-term profits in mind are moving development projects to promising former industrial zones.

Key attraction points

  • underdeveloped districts (ex-ports, power stations and railways)
  • high demand for land and property
  • high occupancy rates and rental market pressure
  • liquid asset and yield growth

London, Paris, Hamburg, Copenhagen and Berlin are some of Europe's leading cities and have the top upcoming districts to watch.

London (#1) and Paris (#4) both rank in the top six cities for attractive investments according to JLL, a global investment management company, — but new real estate markets are also developing. Berlin (#1), Hamburg (#4) and Copenhagen (#7) are in the top ten European cities for property investment prospects according to PwC, one of the world's most prestigious accounting firms. At the same time, Berlin and Hamburg are among Germany's «Big Seven» cities which have attracted soaring commercial investments this year. Experts widely concur that the popularity of these five cities lies in the positive climate for business and property investments.

Battersea, London, the UK

Completion: 2026

Value: €11.4 billion

Built in the 1930s, the Battersea power station is located on the southern bank of Thames in the inner city Nine Elms district. The 16-hectare renovation project targeting the station and its surroundings is lauded as the largest construction project in the contemporary history of London. Even all four of its iconic coal-burning chimneys will be entirely refurbished next summer, turning this tribute to England’s industrial age into London’s newest destination for entertainment and business.

The Battersea renovation project will preserve the building and surrounding area

Renovation work on the decommissioned coal-fired power station has been designed by Frank Gehry’s renowned architect firm. It includes a 1,305-flat residential complex, 160-suite hotel as well as dozens of restaurants and shops. Office space will extend over 116,000 sq m, with one third of that inside the power station building. Apartments in this area will cost from €547,000 to €20 million.

Projected costs are estimated at €11.4 billion (£8 billion) with a portfolio of major investors including Malaysian investment funds and construction companies S P Setia Bernard, Sime Darby Property and the Employees Provident Fund.

Nordhavnen, Copenhagen, Denmark

Completion: 2015–2025

Value: unknown

Nordhavnen is in the harbour of Copenhagen where the cargo seaport was located until recently. Work on 200-hectare the “Sustainable City of the Future” on the Oresund Strait (also known as the Sound) that separates Denmark from Sweden began in 2009, and a new residential and commercial property district is about to see the day. The first apartments should be commissioned by the close of 2015 and the final completion is scheduled for 2025 when the artificial peninsula with new buildings and a cruise port is put into service.

Bird's eye view of Nordhavnen on The Sound in Denmark

The Copenhagen UN House has already been built and the total planned residential area will extend over 165,000 sq m while commercial property will reach 140,000 sq m. This new coastal district of Denmark’s capital will create accommodation and workspace for 40,000 people.

The Nordhavnen project is a state-funded initiative managed by the CPH City & Port Development. It is 95% owned by Copenhagen authorities and 5% by the Kingdom of Denmark. Private contractors like (Danish) PKA construction company have been engaged for the building work.

Les Groues, Paris, France

Completion: 2020–2030

Value: unknown

Paris is a densely developed city with little land left for new projects — except for Les Groues, just a seven-minute drive from the famous business district, La Defense. Located in Nanterre, a city suburb of the French capital, the development will add 630,000 sq m of new property by 2020, one third of which will be office space. Les Groues will bring new life to 47 hectares of abandoned railroads by converting this space into residential and commercial property as well as parks and sports facilities.

Les Groues is located near La Defense, the famous business district of Paris

The project is managed by the EPADESA, a state fund, and should create some 4,500 new homes. Les Groues should attract 10,000 new inhabitants and add just as many workplaces. The area will also get a new metro station by the same name. As the project has just been approved, the value is not yet known as authorities engage with local actors and construction companies.

EuropaCity, Berlin, Germany

Completion: 2025

Value: unknown

EuropaCity is a 40-hectare development project around Heidestrasse, just north of Berlin’s Hauptbahnhof (central train station). By 2025, the area will have 199,000 sq m of residential property, 355,000 sq m of offices, 28,000 sq m of retail premises and restaurants as well as 24,000 sq m destined to cultural activities. The French petroleum company Total is also building its new headquarters in EuropaCity.

The new EuropaCity district is located near the Berlin Central Station

Cologne firm ASTOC Architects is in charge of designing the residential property. Existing galleries and museums will be located on the new Kunst-Campus (Art Campus), due to be completed this year. Developer CA Immo Deutschland GmbH (20 ha), the State of Berlin (6 ha) and German Deutsche Bahn AG railway operator (10 ha) are the owners of this construction project.

HafenCity, Hamburg, Germany

Completion: 2025–2030

Value: €10.9 billion

Hafen is a part of Hamburg’s central Mitte borough, which is spread over several small islands on the mouth of Elbe. In 1997, city authorities decided to transform this two-century old port into a modern residential and business district and work started in 2000.

Over the next ten years, several thousand residential units and office buildings accommodating 14,000 new inhabitants and 45,000 workplaces will be built over 157 hectares in Hafen.

The Elbe Philharmonic Hall project will dominate Hamburg’s skyline

The renovated docks will have promenades spreading over 10.5 km, adding to the current 28 hectares of parks, squares and pedestrian zones in the area. So far, 57 projects have been completed including the eco-friendly Elbe Arcades residential complex and the HafenCity University. Prices for completed property range from €2,850 to €10,000 per square metre and more. Another 50 projects, including the Elbe Philharmonic Hall (Elbphilharmonie) will be commissioned by 2030.

The project is managed by HafenCity Hamburg GmbH who raised €8.5 billion of the total project fund (€10.9 billion) from private investors and another €2.5 billion from the government (including the land sale revenue).

Large-scale reconstruction projects that transform whole districts are unusual for real estate markets and subject to multi-level arrangements between authorities, investors and contractors. But even more importantly, they are subject to meticulous investment potential calculations and, therefore, the very fact that the reconstruction has begun is a positive signal to investors. Another important feature of projects of this scale is that the new residents not only buy property, they also occupy the workplaces created and use the local retail services as well as leisure facilities. In other words, these new districts develop their own micromarket with new supply and demand.

Julia Morozova Julia Morozova Project Manager (Capital Markets Department)

Ivan Chepizhko, Tranio

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