City within a city

Only the elegant sandstone façade still evokes the Golden Twenties. For 100 years, the Karstadt building – now called Galeria – has been the anchor for local retail in Wandsbek, but the store is now set to close by April 2024. In other inner-city areas, such an announcement would be greeted with alarm, but in this Hamburg neighbourhood it is being welcomed as a major opportunity. Variety and diversity will replace the existing monostructure. 

The planned redevelopment of Wandsbek Market – in which Union Investment is involved as developer and investor – heralds the start of a new era for the district. Project manager Ronald Behrendt calls it a milestone project: “The location offers superb opportunities thanks to the density of the urban environment and the capacity for transformation through diversity of use.” Offices, small-scale retailers and a private university are set to move into the heritage-listed department store, which dates from 1922. A new market hall with a food court and event spaces is designed to attract footfall. Intergenerational housing will occupy the site where a multi-­storey car park currently stands. Around 120 to 150 new apartments are expected to be built. 

The concept focuses on sustainability, CO2 reduction and usage mix and is thus a perfect fit with UniImmo: Deutschland.

UniImmo: Deutschland, Union Investment’s largest real estate fund with a total value of around €16.3 billion, is investing an amount in the three-figure millions in the redevelopment. The level of investment reflects the significant opportunities that fund manager Thomas Röhrs sees in the project, with the concept having the potential to improve the quality of the entire neighbourhood over the long term. 

Wandsbek is Hamburg’s most populous district, with around 445,000 inhabitants, and the population is set to grow further. Incomes are also rising. New uses will be carefully balanced to ensure they feed off each other, thereby contributing to sustainable urban revival. More apartments will make the area more vibrant and generate new customers for the shops, while a good range of restaurants, cafés and cultural facilities will boost demand for office space. 

All political groups support the project

The project enjoys the backing of all political groups on the district council. Despite the area having excellent transport links, it has suffered a decline in the online shopping era, with discount stores now dominating the street scene. Christian Hühn, managing director of ppp architects, who are responsible for the design, says that the problems are partly related to the structure of the existing development: “There are some real underbelly areas here” – low-quality spaces such as those around the car park or the Karstadt staff entrance. The key priorities now are to open up the neighbourhood to the surrounding area and revitalise it by introducing a range of different use types. And that is precisely what is set to happen. New builds will replace the existing 1960s buildings, which are unsightly and also dysfunctional by today’s standards. “Their design and structural strength – or lack of it – don’t allow densification,” says Hühn. “The multistorey car park is also too small to be converted effectively.” A bridge structure that currently creates a barrier effect will be removed and traffic flows rerouted, including underground parking provision. “We’re essentially repairing the urban environment,” says Hühn.

Plans have been well received, prospective tenants are showing interest

The highlight of the project and future unique selling point is a 1,600 square metre market hall that will incorporate cultural venues and eateries, thus meeting a need for these facilities in the area and complementing the weekly market held just a few metres away. There are plans for office space and services above the market hall, in addition to rental apartments. 

Talks are already under way with prospective tenants, says Union Investment asset manager Kerstin Behm, including with the Northern Business School, a private university that is considering bringing together its three Hamburg-based study centres under one roof in Wandsbek. For the retail units, the decision has been taken to actively seek retailers who complement the area’s existing offerings, such as sporting goods and toy stores. Behm says: “The mix must make sense for the location as a whole.” The apartments are expected to spark huge interest, especially since 35 percent of them will be publicly subsidised, as is customary in Hamburg. 

The firm’s commitment is a real bonus. It’s very clear that Union Investment has deep roots in the neighbourhood.

“It’s a development that promises to deliver added value,” says Bent Mühlena, head of the Real Estate Project Management department at Union Investment. In 2014, when the Karstadt properties were acquired, discussions were already held on what would happen if the main tenant moved out one day. The issue was particularly relevant because Union Investment also owns the Quarree Wandsbek shopping centre next door, which was extensively refurbished in 2021 and is a key element of the neighbourhood development concept. 

Union Investment’s long-term perspective sets it apart from other investors. Arne Klein, head of Wandsbek’s building department, says the firm’s commitment is a “real bonus. It’s very clear that Union Investment has deep roots in the neighbourhood.” After completion of the work, the ensemble will remain in the UniImmo: Deutschland portfolio. This is a classic win-win situation: the district and its residents benefit from the improvements, which in turn will boost the valuation of the properties going forward.

High sustainability requirements across the neighbourhood

The associated development plan is currently being drawn up. A comprehensive sustainability concept for the entire district is also being worked on, with the aim of fulfilling the requirements of the EU taxonomy and the Carbon Risk Real Estate Monitor. “The concept focuses on sustainability, CO2 reduction and usage mix and is thus a perfect fit with UniImmo: Deutschland’s portfolio structure,” says Röhrs. With completion of the project scheduled for the end of 2027, the time­scale is ambitious but not unrealistic. “There’s a clear determination by everyone to create something worthwhile,” says Klein. 

It helps that Union Investment is known in the area as a reliable partner who also supports social initiatives. In the past, the company has organised an architecture competition at the local Matthias-Claudius-Gymnasium secondary school and sponsored a district map and a local photo competition, and works closely with Leseleo, a non-profit association that promotes reading skills.

Civic participation will continue to be a priority during the development phase, promises project manager Bent Mühlena. As part of this commitment, a project office has been set up as a point of contact in Quarree Wandsbek: “We intend to listen and find out what people want.” If amenities and facilities are aligned with actual demand, that ultimately also benefits those who are creating new offerings in the area.

Words by Christine Mattauch, photos by Benne Ochs