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The connection between law,
zoning, and market value
The example of entertainment properties in Frankfurt/Main
Prof. Dr. Fabian Thiel
Professor of Real Estate and Property Valuation
Frankfurt University of Applied Sciences
Content
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Regulations for entertainment properties
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Exclusionary areas by zoning and influence on
market values
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Valuation problem of “trading-down”
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Appraisal of entertainment properties
(example), and hidden data
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Summary
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Spatial Planning in Germany
Comprehensive
Spatial Planning
European Level
Federal Level
Sectoral Spatial Planning
Land related
sectoral planning
Set up of
Protection Areas
(Land Use Restriction)
Official
Approval
of Plans
State Level
Regional Level
Municipal Level
e.g.
e.g.
Land consolidation Water Protection,
Landscape P.
Nature Protection,
Traffic P.
Military Use
Energy P.
e.g.
for streets,
Airports,
Land fill sites
City Development
Concept
Preparatory
Land-use planning
Legally-binding
Land-use planning
Building plan
Informal planning and instruments
(e.g. City Development or Integrated
Rural Development Concepts)
Regulations for entertainment
properties in Germany
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Law on Prostitution (2002)
Federal Building Code
Land Use Ordinance
Tax laws (e.g., amusement tax)
Local fees
Industrial Code
Programs on urban restructuring and
upgrading
Decrees for exclusionary zones in Frankfurt
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What is an „entertainment
property“?
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Unclear legal definition of an “entertainment
property”; following the Federal
Administrative Court:
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discotheque – yes
nightclub – yes
swinger club – yes
betting agency – no (because it´s retail)
brothels and massage salons – no
(because it´s business)
… and “apartments”?
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Entertainment properties in
Frankfurt: examples (1)
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Entertainment properties in
Frankfurt: examples (2)
Own Images
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Valuation and planning problem:
„trading-down“
Problem of agglomeration of entertainment properties, gambling halls
and „betting-cafes“ within the center of Frankfurt
Appraisal of entertainment
properties (1)
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Appraisal of entertainment
property (2): Specialist Valuation
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Total rooms available per annum: 172 lettable
rooms
45% room occupancy rate
Average achieved room rate: 120 € per night,
excluding cost for service, clothes, food
Running property expenses: 60.000 € for
heating, 12.000 € for marketing and security
Unknown data on revenue, food, beverages
Unknown YP in perpetuity
Unknown turnaround
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Appraisal of entertainment
properties (3): general data
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1,2 Million (male) customers in Germany;
turnover: 14 billion € p.a., 50% part of GDP;
50 % for danegeld, rent, clothing, and
security
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Estimation of “market activity”?
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Definition of “market value” for entertainment
properties?
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Ownership arrangements, leases, danegeld,
(hidden) “operating costs”?
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Summary
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Current amendments of the Prostitution Law
will influence (intervene) in market activities
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Normative pluralism of planning law
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Problem: Tolerance of uses
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„Non-aggression“ agreement between police
and owners of entertainment facilities
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Contact
Prof. Dr. Fabian Thiel
Frankfurt University of Applied Sciences
[email protected]
www.fabian-thiel.de
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