For years, Düsseldorf has been best known for its fashion and trade fairs. But as more international companies move in and its economic position goes from strength to strength, this city at the center of the Rhine-Ruhr industrial region is jumping aboard the luxury housing bandwagon with some unexpected results.
There are around 700 million worth, or more than $885 million, of housing projects being built there - totaling around 153,000 square meters, or almost 1.65 million square feet - many of which are upmarket, according to the real estate consultancy Dr. Lübke in Frankfurt.
"This growth is driven by several factors, including Düsseldorf's emergence as an increasingly international city," said Christian Dillenberger, managing director of Dr. Lübke in Düsseldorf. "Also, there is a move to re-embrace 'city life' with more and more people choosing to live in the city center rather than in the suburbs."
Düsseldorf's housing boom is more pronounced than those in other second-tier German cities because of the combination of its economic strength - the city rapidly reinvented itself after it was badly damaged in World War II, and it successfully paid off all its debts last year - and because there are millions of people living in the region, said Uwe Willer, managing director of investment at the real estate agency Savills in Germany.
"It is less than 30 minutes away from other cities, such as Cologne, and there are around 12 million inhabitants within a one-hour radius of Düsseldorf, which is also driving growth for top-end homes," Willer said.
Despite the continuing turbulence in the world's real estate and financial markets, Düsseldorf's upmarket housing sector has been holding up well so far, largely because such houses are rare, said Sascha Hettrich, a managing partner of the real estate advisory company King Sturge, in Berlin.
Overall, the German residential market has been holding up better than many others in Europe because most prices have remained flat over the past decade, as cheap rentals made it more attractive for many people to rent than to buy, keeping house prices in check.
That is in stark contrast to markets like Britain, Spain and Ireland, where the price of many homes doubled from 2000 to 2007 and now are falling sharply.
"In Düsseldorf and markets such as Munich, Hamburg and Frankfurt, prices for exclusive homes are rising because demand is greater than supply," said Kai Enders, managing director of the agency Engel & Völkers Residential, in Hamburg. "The more exclusive the location, the higher the rise in prices."
Düsseldorf is seen as offering good value for money, with many upmarket homes starting at 5,000 a square meter, or $580 a square foot. That is far less than in Munich, where similar homes cost upwards of 10,000 a square meter, according to Savills.
Many businesses, like the pharmaceutical company Henkel, have their headquarters in Düsseldorf. In addition, there are numerous law firms, drawn by the city's High Court, which also fuel real estate demand, Enders said.
The city's airport expansion is also a factor, said Boris Griesshaber, a partner at the Düsseldorf developer Robiné Projektmanagement.
"The airport is being extensively expanded, including 250,000 square meters of offices, which will also boost demand for upmarket homes," he said.
Popular residential areas include Kaiserswerth in the north, Niederkassel in the west and the Zoo quarter in the center, Griesshaber said. These areas have several parks, which gives them a leafy appearance and makes them popular with families.
Single urban professionals often prefer Oberkassel, slightly west of the city center, because of its good infrastructure and wide range of restaurants and shops.
Exclusive homes in these areas typically start from 5,000 a square meter, Griesshaber said.
The rapidly expanding Media Harbor, an area just south of the city center that is home to many media companies, also is becoming popular, and a number of luxury developments are planned there.
The area already benefits from a number of architecturally imposing buildings by the likes of Frank Gehry, Steven Holl and David Chipperfield. Now, the German developer Frankonia Eurobau will start work later this year on its Königskinder project, meaning "King's children," which encompasses two luxury residential towers. As the name suggests, it pays homage to a prince and princess with sculptures on the roofs.
"We got our inspiration from a German fairytale about a prince and a princess who are separated," said Alexander Schmitz, head of Frankonia's Düsseldorf office. "Our sculptures, which will be made of steel and several meters high, will stand facing each other on the two roofs,"
When completed in 2010, the two towers will have a total of about 80 apartments and lofts, ranging from 100 square meters to 400 square meters. Prices for the apartments, which will include concierge service, have not been determined, Schmitz said.
"Media Harbor is going to be a real hit," said Dillenberger of Dr. Lübke. "The architecture is very stylish and there are some restaurants to rival top restaurants in world cities such as London."
Near the zoo, in the city center, construction also is increasing. The developer Bema Rheinland Projekte is working on 85 luxury apartments overlooking the neighboring park in Graf-Recke Street. They will range from 75 square meters to 200 square meters, with prices likely to be 4,000 to 7,000 a square meter, said Fabian Maus at Bema, who is working on the project. Construction started this month and is due to be completed by mid-2010, he said.
There is also a growing trend of developing townhouses that can be divided into apartments. Robiné Projektmanagement is developing three townhouses, each with four to five apartments of around 200 square meters, on Cecilienallee on the eastern side of the Rhine. Two have just been completed and the third is expected to be finished by May. Each apartment comes with a price tag of around 1.1 million, according to Griesshaber at Robiné.
Robiné Projektmanagement will shortly start work on a townhouse development in Oberkassel, which will be divided up into four apartments of around 200 square meters each. The luxury apartments, with a view of the Rhine, are expected to be finished by the end of next year and will be offered for sale at about 2 million.
Apartments in townhouses appeal to chief executives and also to owners of large homes who want to downsize, Griesshaber said.