In the year 2000, the city of Hannover will host Germany’s first world fair. By Lydia Westrup.
Internationally, Hannover is renowned for its exhibitions: the city hosts an annual industrial fair, Hannover Messe, and CeBit, on information and communication technology. Indeed, the city annually attracts up to 3m visitors, who come to attend the 40 trade fairs organised by Hannover Messe. Expo 2000 will be another order of magnitude: up to 40m visitors are expected to attend it over its five-month span.
The organisers of Expo 2000 – Expo Grund – have set themselves an ambitious target. Creating an inspiring exhibition while at the same time making it a profitable venture will prove quite a challenge.
“Looking at the different options we finally decided that the best use of the site is in the area of leisure and entertainment,” says Frank Kollner, managing director of Expo Grund . This company – whose shareholders are the state of Lower Saxony and the City of Hannover – is responsible for the project development and marketing of the scheme.
For the exposition, the city of Hannover has provided Expo Grund with an 11.5 ha site adjacent to the existing fair ground about four km away from the city centre. The location has the benefit that Expo exhibitors may lease some of the existing halls at the Messe, and the Messe is interested in Expo, as the leisure/entertainment facilities planned may complement its exhibitions and draw more visitors to the Messe itself.
The Expo site will be developed into World Expo Plaza; outline planning permission has already been granted for key elements, including the German Pavilion. This 16,000 m2 building will have 8,600 m2 of exhibition space, plus a press centre, restaurant, and lounge facilities. After Expo, Landesbank Berlin, who is the investor backing the pavilion, intends to convert it into a Multimedia World Center. Detailed plans for this use have already been drawn up. Also located on the plaza is 15,000-seat arena. A subsidiary of Siemens will be planning and developing these two buildings, which have an investment value of DM 800m.
Other plans for World Expo Plaza include a theme park focused on multimedia, science and technology, the environment, the arts and culture. This “edutainment centre” is modelled after the EPCOT Centre at Disney World in Florida. Here, companies will be given the opportunity to show new forms of corporate presentation. Leisure facilities like an IMAX cinema with 400-450 seats and a music theatre for 1,500 are also being considered. The theme park has yet to find an operator.
In addition, Expo will have a 28,000 m2 World Trade Centre. To be developed by a local property company, GVI, its backers include Norddeutsche Landesbank, Stad-und Kreissparkasse, Haas Ingenieur-Consult und Haas-Rosemeyer & Partner, and Deutsche Messe. It will contain a 3/4-star hotel, restaurants and shops as well as offices.
Among recent proposals, there are plans for a DM 60m design centre on the south-western side of the Plaza. This is likely to be the new home of Industrieforum Design, a Hannover-based initiative, which has over the past few years organised exhibitions and events on industrial design in a small pavilion on the existing fair ground. It has been thinking about an alternative location for its events for a while.
“For the time of the exhibition the building may be used by one of the supranational institutions. We are thinking of the World Bank. Together with the Industrieforum, we will be looking for users for the time after the exhibition. We see good potential for the upper floor of the 17,000 m2 building to be let to international design companies,” says Kollner.
The commercial success of the Expo Plaza site depends on finding users and operators for various components of the scheme. “The two Expo companies, Expo 2000 Hannover and Expo Grund, together with Siemens and some Hannover-based property agents have begun to approach potential users and operators for the various components in Germany and abroad. At the same time we have started to negotiate the terms and conditions with the World Bank, the EU and UN for their presentation at the Expo 2000,” says Kollner.
Expo Grund’s job is not limited to marketing the site. The firm also acts as co-ordinator and manager for the whole development. “We consider it paramount for the commercial viability to look at the project as a whole. The individual projects are interdependent and it is our role to create attractive facilities for future visitors,” notes Kollner. Currently, Expo Grund intends to form a consortium of investors rather than parcelling off and selling individual plots of land and their respective buildings.
For financing, Expo is thinking about a closed-end property fund among other options. “For some time much of the property investment in Germany has been tax driven. With the new tax rules, investors are increasingly looking for projects with a good return. Since we have an immediate cash flow from the exhibitors at Expo, we can offer investors a solid return,” says Kollner. For the period of the fair, rents from exhibitors are expected to be up to DM 1,200 per m2 per month. This compares to average Hannover office rents of between DM 17-22 per m2 per month. The feasibility study puts the yield on the investment at just below 7%.
