- Hamburg, along with other European cities vulnerable to flooding, is projected to face severe flood damage, with costs potentially reaching €9.3 billion by 2100 under extreme climate scenarios.
- Despite HafenCity's development as a flood-resilient project, recent flood events and storm surges have exposed its vulnerabilities, impacting local businesses and exacerbating the city's housing crisis.
- Enhanced flood protection measures and early warning systems tailored to business needs can help mitigate the adverse effects of flooding and ensure continuity of operations.
A 2023 study conducted by the EU Commission’s Directorate-General for Environment (DG ENV) highlights that Hamburg – like other European cities located in floodplain areas including Paris, Florence, and Geneva – is expected to face the most severe flood damages in Europe in the coming years.
The study also emphasises that Hamburg and other flood-prone cities in Germany are at greatest risk of significant loss from impacts on residential buildings, noting that climate scenarios for river-based flood risk in Europe project these damages could reach €6.8 billion under RCP 4.5 and €9.3 billion under RCP 8.5 by 2100.
In view of these mounting threats, Hamburg has been implementing a range of flood protection measures in the past years, such as enhancing dike systems, improving drainage infrastructure, and developing early warning systems.
However, these measures may not be sufficient to promote optimal resilience efforts in the long term, as the city’s Elbe River continues to grow as one of Europe’s hotspots for severe floodings due to worsening rainfalls and storm surges.
This article looks at the case of the HafenCity Project and flood resilience measures in place, as well as important considerations to help businesses adapt.
HafenCity Project and Challenges of Local Businesses
HafenCity is an ongoing urban development project that started in 2003 in a port area along the Elbe River.
Today, the construction of 50% of the buildings planned in the master plan have been achieved, with the completion of the latest urban zone scheduled in 2025. This plan is expected to cover 1,570,000 sqm around the Elbe River, and to create 6000 apartment buildings for roughly 14000 residents, expanding therefore the inner-city of Hamburg by approximately 40%.
In 2015, HafenCity project was described as a flood-resilient city project in Hamburg, of which, in the words of Kevin Hanna, British Columbia University’s Associate Professor of Sustainability: “Adaptation and resilience are being built [directly] into new developments. [...] With innovative planning, good design and attentive municipal operation, cities can effectively manage the risk of, if not peacefully coexist with climate change-related flooding”.
In December 2023 however, the Elbe River flooding has submerged neighbouring streets to the local fish market, with waist-height water levels in some areas and peaking around 3.3 meters or 10.8 feet beyond high water level.
More recently in 2024, storm surges have caused flooding in the same area, severely affecting fish vendors and their operations, with many experiencing losses due to high water levels. While the fishing, logistics, and property sectors are heavily impacted, the area around the Elbe River – including HafenCity – remains at high-risk of business disruption due to flooding. In the second half of 2023, the housing market in Hamburg experienced a significant decline in purchase price and an increase in rent by 6.4% compared to the 2022 record, mainly due to high interest rates and elevated construction prices.
As flooding risks continue to increase, Hamburg's housing crisis is likely to worsen, particularly in areas like HafenCity that are vulnerable. The rising costs of flood protection and insurance, coupled with the physical threat to properties, may drive up housing prices further, exacerbating the affordability crisis.
In addition, the growing risk of property damage and displacement could deter investment in new residential developments, limiting the supply of housing and putting further strain on an already tight market.
As HafenCity continues its development, it represents a significant expansion of Hamburg’s urban landscape. Despite its initial reputation as a flood-resilient project, recent flood events and storm surges have highlighted vulnerabilities in the area, impacting local businesses and exacerbating the city's housing crisis.
The challenges in HafenCity highlight the urgent need for urban planning that balances immediate flood risk management with long-term resilience to protect both housing and businesses.
Protecting Businesses: A Better Approach to Flood Risk Management and Climate Risk Adaptation
Despite efforts by local and national authorities to provide flood risk alerts through radio broadcasts, sirens, and local speakers and heavy rainfall map to residents, these measures are not always sufficient for businesses in flood-prone areas.
Many businesses, particularly those in HafenCity and surrounding areas, have not yet adopted advanced tools and strategies to assess and manage their physical asset vulnerabilities.
This lack of sophisticated risk assessment and management tools can potentially increase the risk of asset stranding and operational disruption in the future.
In addressing these challenges, Climate X’s solution for Real Estate and Asset management, Adapt offers a valuable solution.
Adapt helps identify climate adaptation needs by improving decision-making efficiency and reducing reliance on third-party evaluations.
- Enhanced Risk Management: By incorporating Adapt, businesses can better assess and manage climate-related risks using accurate and relevant data, leading to more informed investment decisions. This proactive approach helps in identifying vulnerabilities and implementing effective adaptation strategies, reducing the likelihood of unexpected losses due to flooding.
- Increased Investment Confidence: Demonstrating a commitment to robust climate risk assessment and adaptation can enhance investor confidence. Investors are more likely to support projects that show resilience to climate risks, knowing that potential risks have been evaluated and mitigated.
- Attractiveness for Funding: As investors increasingly prioritise sustainability and climate resilience, properties and developments that use advanced tools like Adapt may become more appealing. This can potentially lead to better access to funding and more favourable investment conditions.
- Long-Term Financial Stability: By integrating climate adaptation into their planning, property developers can ensure long-term financial stability and performance. This foresight helps mitigate the effects of worsening flooding risks and supports sustained returns on investment.
- Actionable Insights: The tool delivers tailored recommendations for enhancing flood resilience, guiding infrastructure improvements and risk management strategies.
- Scenario Analysis: By modeling various flood scenarios, Adapt helps identify potential impacts on both residential and commercial properties within HafenCity.
Overall, using Adapt not only helps businesses navigate climate risks but also aligns with investor interests in sustainability and risk management, potentially leading to greater investment opportunities and stability.
For businesses, especially those in vulnerable sectors like property and warehouse management, it is crucial to implement more robust flood risk management practices. This includes investing in infrastructure upgrades, adopting comprehensive risk assessment methodologies, and integrating climate risk adaptation strategies into their operational planning.
Enhanced flood protection measures and early warning systems tailored to business needs can help mitigate the adverse effects of flooding and ensure continuity of operations.
Additionally, collaboration between businesses, local authorities, and urban planners is essential to develop resilient solutions that address both immediate and long-term climate-related risks.
