Last month here in Berlin, news broke of yet another club ceasing operations, Watergate, and the reactions were predictably sour amongst nightlife enthusiasts. But for the majority of non-techno-head Berliners, was this really cause for concern? So a legendary club that’s been operating for 22 years shut down; there are others, right? Aren’t these clubs just havens of electronic music-underscored hedonism and rampant drug use? Why should anyone care?
Whether or not techno is your thing, clubs are a huge part of Berlin’s Wohlfühl (well-being.) According to a study by the Berlin Club Commission, clubs contribute approximately 1.5 billion euros to Berlin’s economy. Clubs draw in tourists and are also even used as part of some tech companies’ and start-ups’ marketing materials to attract new hires. And not for nothing, UNESCO recently recognized Berlin Techno on its list of “Intangible Cultural Heritage.” Clubs bring people and money to Berlin.
Landlords, it seems, don’t feel the same way. A quick look at the economic movers and shakers behind Watergate’s recent closure provides a thin slice of the bitter pie that is the current real estate market situation in Berlin, analogous to hardships that business owners and tenants are increasingly faced with all over Europe.
To be sure, the ugly maw of gentrification is not a new phenomenon for any urban dweller but Watergate’s shuttering, as well as other recent closures and ongoing rumors of more to follow, are a canary in the Berlin lifestyle and culture coal mine and part of a troubling and growing trend.
Rising real estate pressures and club closures
So what are the basic facts behind Watergate’s closing? The club’s lease expired, and the owner, real estate giant Gjiora Padovicz, allegedly raised the rent, as they did with another venue they own that recently closed, Wilde Renate.
In Watergate’s own words:
While Watergate wouldn’t directly call out their landlords, the operators of Wilde Renate were a bit more explicit:
The reason for this is the expiry of the lease agreement with the notorious property investor Gijora Padovicz. Despite intensive efforts to find an extension to the contract or alternative solutions, the club operators have to face the fact that Renate will no longer be able to continue in its current form. The ousting of Renate is not an isolated case. Time and again, clubs and other socio-cultural institutions in Berlin are repeatedly threatened by similar developments. The Padovicz Group plays a role that should not be underestimated.
With a heavy heart, we have decided to end our club operations at Watergate. These are tough times for Berlin clubs, and since Covid the business hasn’t really picked up .… The days when Berlin was flooded with club-loving visitors are over, at least for now, and the scene is fighting for survival.
While the unfettered greed of corporate landlords is a main driver of the challenges Berlin’s venues are now facing, it’s not the only factor at play. Many operators of clubs, bars, and restaurants have cited rising basic operating expenses, energy costs and an overall failure for the city’s tourism numbers to recover post-pandemic. At the same time clubs are in increasing danger of being priced out of Berlin, the plight of the average renter is also only getting worse.
According to a recent report from Reuters, in the last seven years, Berlin rents have jumped 44 percent, with the average wage increasing by only 30 percent. A study by the bank Berlin Hyp and brokerage group CBRE shows an 18.3-percent rent increase in 2023, compared to the previous year. If you are lucky enough to have actually already found a good apartment in the housing shortage nightmare that is Berlin, you do have some protection. According to Conny, a company that fights for residential tenants rights in Berlin, the law prohibits a rent increase of more than 15 percent within three years.
But if you are a new tenant or business operator, you will face real estate companies that have ruthlessly increased their rental fees because, well, they can.
Average rents have doubled or even tripled, and spaces that could be used for things that arguably make Berlin a draw for tourists and culture-vultures are being offered to the highest bidders, which often seem very interested in creating quiet, corporate office spaces, not houses of endless dancing and booming beats.
Berlin’s nightlife evolution amid financial challenges
With these troubling trends in land and capital, the halcyon days of Berlin being, as mayor Klaus Wowereit in 2003 famously described it, “Poor but Sexy,” are fast vorbei (almost over.) But while things are getting more expensive and some clubs have to close, a night out in Berlin shows that the city’s world-class party scene isn’t going anywhere; it’s just changing. And no, it will never be 2003 again and no, your club entry isn’t 5 euros anymore and no, you can’t find a room for 150 euros.
This is not necessarily a reason to panic, to leave town or to not come visit and party. One encouraging story is the success of RSO club, a newer venue run by the owners of the famously landlord-squashed Neukölln venue Grießmühle. They were forced out, started over and are providing a truly inspired club. Hedonism prevails.
And of course, there’s still one place that seems impervious to any impending threat of Clubsterben, since the operators own the building and it’s now a UNESCO protected landmark: Berghain. It seems that Bergain is forever . . . if you’re lucky enough to get in, that is.
Sources:
Berlin club Renate to close permanently in 2025
Berlin’s Famous Club Scene Faces the End of the Party
Berlin rents increase by an average of 18,3 percent in one year
Berlin’s renters face more misery as housing crisis deepens
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Read more about Berlin here in Dispatches’ archives.
