Review 84th Swiss Real Estate Talk

At the 84th Real Estate Meeting, the debate revolved around retail in the city centre, successful district development and the city of tomorrow. In the committed exchange between academics and representatives from the field, a number of clear theses emerged.

Jürg Zulliger - 8 November 2021

The new balance between inner cities and surrounding areas

Strategy consultant Thomas Sevcik, CEO of Arthesia, began by questioning some basic assumptions: For example, while most people associate the term "city" with a dense mix of offerings - retail space, dining, culture and promise - visible, for example, in all the neon signs in big cities like Hong Kong. "But the reality of the city for most people today is different," Sevcik says. That's because many people don't live in the core cities at all. Sevcik put forward the thesis of the "in-between city", in which good and sought-after locations will increasingly form outside the centre in the future - often in a ring-shaped form. Sevcik compares this dynamic, exemplified by the Paris metropolitan region, to a donut: "The actual fat dough grows all around the city." The prerequisite: "The infrastructural connection must be right, then cultural hubs will also develop beyond the centers," says Sevcik. In Zurich, for example, these are quarters such as Oerlikon or Altstetten: "This is the place for co-working, co-anything, experiential shopping, and so on. This is where optimal accessibility and new forms of shopping, living and working come together." According to Sevcik, the in-between city offers "a variety of new opportunities," but this presupposes that hybrid forms (residential/commercial/industrial) are permitted - which often fails due to overly strict zoning regulations. In order to successfully shape the megatrend, it must be possible to remix functions such as commerce, work, living or shopping.

Quartier du Flon and Himmelrich

Gerhard Demmelmair, Head of Portfolio and Transactions at Mobimo, used the example of the Quartier du Flon in Lausanne to show how the transformation of a piece of the city, which for many years was mainly used as a warehouse and goods handling centre, into an urban district can succeed. Since 2009, after the takeover by the Swiss real estate company Mobimo, the quarter has been developing and becoming more dynamic. Where once a freight depot dominated the scene, a lively, mixed-use quarter has now emerged, with a clear identity at the heart of the city of Lausanne. Mobimo's motto in developing the Flon is to use the best of the past to shape the future. The result is the transformation of the neighbourhood into a new entertainment, creativity, work and living centre. "New tenants, restaurants, shops and offices are installing themselves in the Flon and mixing with the old and loyal tenants," says Demmelmair. Here, he says, it is concretely visible what new forms make sense and work. For example, with the idea of "Les Garages", with small, modularly usable spaces for craft businesses, artists, trades, etc. The Quartier du Flon comprises around 90 shops and 28 restaurants and bars.

Martin Buob reported on another successful example of neighbourhood development. The managing director of the Allgemeine Baugenossenschaft Luzern (ABL) described the history of the Himmelrich new housing estate. The ABL is building 250 apartments in Lucerne's Neustadt district by spring 2023 according to the plans of the architectural firm Enzmann Fischer Partner AG. The first stage, with 179 apartments and 16 commercial or catering businesses and social institutions on the ground floor, was completed in September 2019; construction work on the second stage along Claridenstrasse has been underway since autumn 2019. According to Martin Buob, the prerequisites for the success of the project were the intensive support of the process, the high level of identification of the cooperative members and the great commitment on the part of the commercial enterprises. On the ground floors, the cooperative opted throughout for shops and restaurants that serve local needs. "We deliberately decided against renting to labels," says Buob.

There is no question of urban exodus

Professor Alain Thierstein, holder of the Chair of Spatial Development at the Technical University of Munich, presented the results of current potential analyses for the greater Munich area - results from which interesting conclusions can be drawn about developments to be expected in similarly popular major cities. For one thing is clear: if people work at home rather than in the office for a large part of the week in the wake of the home office that has become fashionable in the pandemic, this will change the development of residential locations and trade. "But the blanket thesis that in the context of the pandemic everyone now wants to move to the open countryside is wrong," says Thierstein. After all, major cities such as Munich - or Zurich - are still clearly among the high-potential areas, because the labor markets and the central functions are highly attractive there. But in addition, a map with a polycentric structure is increasingly emerging. In the case of Munich, the new "secondary cities" include Augsburg, Ingolstadt and Donauwörth, for example - and to a lesser extent the cities to the south of the Bavarian capital, such as Garmisch-Partenkirchen. This is not only related to the price level there, but above all to "accessibility", good accessibility and, not least, a fast broadband internet connection.

New alliances needed

In the concluding panel discussion, moderator Markus Schmidiger posed the question of whether owners, for example, would be prepared to forego certain income - precisely in order to be able to curate and play with urban and neighbourhood spaces in a targeted manner. Sevcik clearly supported this thesis and called for new calculation and rent models ¬- "the time of fat 10-year rental contracts" was over. At the end, Professor Thierstein again brought tension into the debate: "All project developers and investors cannot simply have the positive reference examples presented to them. They have to ask about the developments that have failed." The city is a public good - but urban development is not an art that can be learned, Thierstein said. The speakers agreed that in future things will more often be done according to the principle of "trial and error" - and that it is precisely the less successful projects that need to be looked at in order to learn from the mistakes. This means also analyzing "failed" neighborhood developments - i.e., those that lack urbanity and thus attractiveness for residential and commercial tenants due to planning errors. Equally instructive are promising development projects that do not even reach the start of construction because of political hurdles. Thierstein concludes: "New alliances are needed. Neither the public sector nor the owners can conjure up or guarantee successful neighborhood developments today."