On a warm afternoon last October, Argentine property developer Alan Faena was looking out over the once-neglected Puerto Madero district of Buenos Aires at the community he has built over the past decade. Tall, slim and dressed in white, Faena – a former fashion designer turned national pop-culture icon – was explaining how this century-old quarter has evolved into the city’s pre‑eminent residential, cultural and commercial centre. Set along the Río de la Plata, within spying distance of the Casa Rosada, where Evita implored her nation to save their tears, Puerto Madero has withstood Argentina’s latest economic malaise to become the priciest housing destination in the capital.
“We wanted to develop a new neighbourhood that blurred the boundaries between culture, real estate and art,” explained Faena from atop Puerto Madero’s newest arrival – Norman Foster’s 50-residence Aleph building, completed late last year. “The goal was to create a ‘curated’ environment with similar levels of value and sophistication throughout – from the real estate to the art to our tango show; even our empanadas.”
The Faena District has indeed emerged as a global model for high-quality, purpose-built “lifestyle” living. At its centre is the Faena Hotel, which was designed by Philippe Starck and opened in 2004, with restaurants, a tango lounge and nightclub set in a historic mill building. It was completed at the same time as an adjacent 102-unit residential structure. The hotel was always envisioned as just the start for Faena and his chief collaborator, and wife, Ximena Caminos, and four residential blocks have since been added. Apartments are priced at up to $8,000 per square metre – higher than in Recoleta, the bastion of Buenos Aires’ old-monied elite. Since late 2011, the Faena District has also been home to the whitewashed Faena Arts Center, a sprawling $20m display space in the restored engine room of a wheat mill built in 1900.
The centre has become a major cultural force – with shows by contemporary artists such as Brazil’s Ernesto Neto, Cuba’s Los Carpinteros and Germany’s Franz Ackermann, as well as an annual arts prize and a clutch of public-art displays. This in a city where art production and exhibitions are often state-supported. Futhermore, the centre serves as a solid manifestation of Faena’s vision of Puerto Madero as a place where culture nurtures the bottom line as much as the spirit. “When they’re done right, art projects increase the value of apartments in developments such as Aleph,” he says. “They encourage buyers to truly invest in an area and not buy and sell simply to make money.” In January, Faena launched a parallel development in Miami, with residences also by Foster and a cultural centre designed by Dutch architect Rem Koolhaas.
According to New York-based property consultant Jonathan Miller, “luxury real estate is the new global currency”, and developers are turning to culture to give their projects a competitive edge. From South Florida to South America to South Africa, cultural fairs and arts centres are becoming crucial components of urban residential developments. Whether evolving organically, as in Miami’s Design District and Panama City’s Casco Viejo, or wholly integrated into master-plans, as on Abu Dhabi’s Saadiyat Island and Hong Kong’s West Kowloon quarter, “culture is helping to create and establish a location’s identity, while stabilising and increasing its long-term value”, Miller adds.
But the pas de deux between high culture and high-end property is also spinning the other way as upmarket real estate provides the funding – and audience – for culture itself. Take Panama City’s 340-year old Casco Viejo. Here, where Spanish-colonial cathedrals abut beaux-arts-era maisonettes – US developer KC Hardin is building luxury condominiums intended for foreign buyers alongside low-cost studios and living spaces for local artists. “Our goal is to finish one affordable housing unit for every high-end condo,” says Hardin, a former New York corporate lawyer whose premium properties range from $300,000 to over $1m (available through Arco Properties). “Keeping artists in place is the only way to maintain an area’s authenticity and attract a critical mass of visitors,” he adds.
In South Africa, a pair of entrepreneurs are taking a similar approach to Johannesburg’s long‑neglected city centre. In The Maboneng Precinct on the city’s still-transitional eastern flank, Jonathan Liebmann has built a fully functioning neighbourhood that includes artists’ studios, a four-star hotel and 500 upmarket apartments, priced at up to R3m (about £215,000). In a community still recovering from Apartheid-era isolation and inequality, he views property as a catalyst for culture-creation and, ultimately, racial reconciliation. “Culture needs real estate as much as real estate needs culture – the two sides feed off of one another,” says Liebmann, who also built Johannesburg’s well-regarded Arts on Main space. “I may be first and foremost a real-estate developer,” he adds, “but my profits are what allow me to build cool things such as studios and museums.”
Nearby in historic Braamfontein – close to Johannesburg’s Central Business District and home to the University of the Witwatersrand – former lawyer Adam Levy’s company Play Braamfontein started out by converting an office block into seven sprawling SoHo-style lofts in 2004. Now its initial investment has expanded into nearly a dozen neighbouring buildings and includes design and art ateliers, the renovated Alexander Theatre and Johannesburg’s year-old outpost of Cape Town’s vibrant Neighbourgoods Market.
These projects suggest that the blurring lines between art and commerce can actually enrich entire communities rather than just artists and their dealers. “It can create a sort of self-fulfilling prophecy for a destination,” says James Price, partner in international residential development at Knight Frank in London. “As more people are attracted to an area, its attractiveness [to buyers] is further enhanced and consolidated.”
Of course, most of the highest-profile, culture-rich property projects involve far costlier locations than Panama or South Africa. Take Windsor, the 416‑acre private residential community developed by Canada’s Weston Family in Vero Beach, Florida. First built in 1989, the development – where properties are sized between 2,500sq ft and 13,000sq ft and cost from $1.25m – not only hosts polo matches and has a Robert Trent Jones Jr-designed golf course, but is currently supporting a three-year partnership with London’s Whitechapel Gallery. In tandem with December’s Art Basel Miami Beach fair, The Gallery at Windsor debuts an annual Whitechapel-curated show.
This year’s exhibition showcases the work of Romanian twins Gert and Uwe Tobias. Running to April 4, it follows a long history of previous shows – from Ed Ruscha to Peter Doig. And while the gallery’s size and audience may be modest, Whitechapel director Iwona Blazwick says the partnership provides an important forum for her gallery’s artists and Windsor’s cosmopolitan clientele. With high-profile residents that include the Swarovski familiy, Windsor owners are certainly capable of collecting as much as appreciating visual art.
“Although our buyers clearly view art exhibitions or a gallery as points of distinction, they aren’t necessarily demanding them,” says Hilary Weston, who founded Windsor with her husband, Galen Weston, chairman of Selfridges & Co and Holt Renfrew & Co. Rather, the Gallery serves as a brand-building – and ultimately sales-spurring – vehicle for Windsor itself. “We’ve never advertised at Windsor,” Weston adds, “so with our owners very keen to show The Gallery off, it creates great word of mouth for us.”
Two hours south, in Miami Beach, art – along with contemporary design – has also played a vital role in the brand-building of the city’s once-dormant Design District. Set across Biscayne Bay from Atlantic-fronting South Beach, the area has evolved over the past decade from an obscure residential backwater to a thoughtfully conceived culture and culinary quarter, with more than 125 galleries, showrooms, artist studios and restaurants. “The area’s success is unprecedented in the US for a city of Miami’s relatively modest size,” says urban theorist Richard Florida, “it is an unmistakable sign that the economic and commercial centre of gravity is shifting away from the suburbs back to the urban core.”
Unlike Windsor or Puerto Madero, the Design District wasn’t “master-planned” and flows freely into surrounding neighbourhoods such as Midtown – home to the annual Art Miami event – and Wynwood, an important visual arts district with galleries that include The Rubell Family Collection and The Cisneros Fontanals Art Foundation. But the district did have a chief protagonist in property entrepreneur Craig Robins – whose company, Dacra, began overhauling much of the area in the late 1990s. Although most of this investment focused on retail, restaurant and gallery spaces, Robins solidified the precinct’s cultural bona fides by establishing Design Miami – the annual design-focused counterpart to Art Basel Miami Beach. Though it has since relocated to South Beach, the Design District continues to lure important cultural totems – most notably the De la Cruz Collection, one of the largest contemporary art display spaces in all of the city.
The district and its surrounding areas have also attracted buyers who appreciate the pedestrian-friendly layout and thriving restaurant scene. “This was a place that had to ‘happen’,” says longtime resident Lee Schrager, founder of the South Beach Wine & Food Festival. “It has finally given Miami a real city centre; it’s one of the few truly car-free parts of town.” Schrager estimates that his 1914 water-facing home has increased in value by at least 100 per cent over the past 18 years.
Today, upper-end residences in the Design District and nearby regularly sell for in excess of $1m. South Beach International Realty is offering a two-bedroom penthouse in the Blue condominium development for $799,000, slightly beyond the Design District’s borders, while just over a mile away, Fortune International Realty has a newer two-bedroom apartment in the Paramount Bay complex, priced at $1.02m.
Robins is now scaling up his initial vision. In partnership with L Real Estate – the Paris-based luxury retail private equity fund in which LVMH is an investor – he is converting another 12 Design District blocks into a more formally master-planned residential, commercial and cultural development. Along with a hotel and nearly two dozen LVMH and Richemont boutiques, the $312m project will include at least 100 apartments in a building designed by Spanish architects Office of Architecture in Barcelona, entering the market in 2015. Robins describes the housing as a mix between condominiums and lofts – with the entire development anchored by pieces from his own contemporary art and design collection, most notably a central plaza with Buckminster Fuller’s seminal Fly’s Eye dome.
Much like Faena, Robins – who also owns works by Marc Newson and Zaha Hadid – says culture serves as both an aesthetic amenity and value-generator if done right. “Buyers no longer want something that is merely ‘expensive’ or ‘fancy’, they want to participate in neighbourhoods that have some real meaning,” he says. “Our goal is to maintain the Design District as a relatively low-density place, carefully growing it to retain its historic spirit.”
The district’s size and scale serve as a precursor to far grander culture-rich developments across the globe. On Abu Dhabi’s Saadiyat Island, where branches of the Guggenheim and Louvre are slowly rising along the Persian Gulf, the first group of luxury villas and apartments have recently come to market. The residences, totalling nearly 1,150 units, are designed in Mediterranean or arabesque styles and start at $1.2m, going up to $8m. While the homes are not set within Saadiyat’s culture quarter, their construction capitalises on the island’s growing status as the Gulf’s leading artistic hub. “Saadiyat’s developers clearly understand that by creating high-value culture they’ll be able to attract higher‑value buyers,” says Joachim Wrang-Widén, senior vice president of Christie’s International Real Estate.
Equally ambitious is Istanbul’s Zorlu Centre, Turkey’s largest-ever mixed-use residential, commercial and cultural development, with 584 luxury apartments and a $300m performing-arts centre. The residences, scheduled to be completed in August and already 50 per cent sold, range from 117sq m to 735sq m and are priced from $9,500 to $18,000 per square metre. “This is one of the most important focal points for culture between Paris and Abu Dhabi,” Wrang-Widén says.
This “spill-over” effect is already being felt in what is believed to be the world’s largest culture-led redevelopment scheme – Hong Kong’s West Kowloon Cultural District. Totalling nearly 100 acres and master-planned by Foster and Partners, the $2.8bn project will include 17 cultural venues, offices, retail outlets and residential buildings, linked to Hong Kong’s Central district by express railway. With West Kowloon’s first buildings at least two years from completion, prices for residences have not yet been released. But homes in neighbouring areas are achieving the same prices as traditional Hong Kong housing in areas such as Central, as well as residences in similarly styled schemes, including London’s Canary Wharf, according to Savills.
Whatever the eventual costs, Foster senior partner Spencer de Grey is confident that West Kowloon will prove a wise investment. “Culture should be accessible and at your doorstep, not once-a-month or for special occasions,” he says. “It should have close proximity to where people live and work. Time and time again this is what has made a successful neighbourhood.”