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Urban regeneration projects seek to turn around the fortunes of declining areas, characterised by derelict buildings, poverty and environmental degradation.
One of the most striking examples of European urban regeneration projects is King’s Cross, London. A neglected area of derelict warehouses and decaying buildings, next to the eponymous railway station, was transformed into a vibrant neighbourhood where restored historic buildings blend in with modern architecture. Nearly 2000 homes, cultural venues and commercial and public spaces have been created, forming a highly attractive new urban landscape. Both Google and Meta have set up their UK headquarters in the area.
It is a similar story with Europe’s largest inner-city development project, the HafenCity of Hamburg. With 157 hectares, the former industrial brownfield site was converted into sustainable living quarters with 8000 new, energy-efficient flats, shops, restaurants, offices and public spaces. The 25-year redevelopment project, one of Europe’s beacons of urban regeneration, was embedded in the much bigger strategic plan ‘Vision Hamburg – Responsible Growth’. Given that, it is not surprising that each year around €18bn is invested in the city state of Hamburg alone, €5bn of which is being spent on buildings and real estate development. It is probably fair to assume that HafenCity has a lot to do with such impressive numbers; doubly impressive given that the majority of this sum is coming from private investors.
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Given Europe’s building stock, urban regeneration offers massive business opportunities for urban planners, building materials suppliers and construction companies. On the other hand, private investment in regeneration and infrastructure projects is not an infinite good in its own right, as also demonstrated by London and Hamburg.
In case of the latter, a stake in the Container-Terminal Tollerort was sold to Chinese investors, a deal pushed through by German chancellor Olaf Scholz against much resistance from various ministries. But even if national security considerations do not come into play, urban regeneration projects can still be problematic. Take the Battersea Power Station redevelopment project in London, where Malaysian investors neglected affordable housing commitments to focus instead on more lucrative luxury apartments.
Despite all the undisputed benefits of regeneration projects, we should never forget that hard-nosed economic interests are at play when hundreds of millions of private capital change hands.
Martin Kaspar is head of business development at a German Mittelstand company in the automotive industry.
E-mail: martin.georg.kaspar@googlemail.com
This article first appeared in the August/September issue of fDi Intelligence
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