Hamburg  - The smell of stored tobacco, tea and roasted coffee excite the senses of visitors to Hamburg's historical warehouse complex known as the Speicherstadt.

Until a few years ago huge quantities of luxury goods were still being stored behind its bulky red-brick walls. Now, many of its once dark and deep store-rooms have been converted into modern offices and showrooms for the IT and fashion industries.

But about half the complex is occupied by import-export companies dealing in oriental carpets. There are close to 300 of them trading in more than
750-million-dollars-worth of carpets a year, making Hamburg the largest carpet warehouse in the world, and the Speicherstadt the biggest facility of its kind.

Since Emperor Frederick Barbarossa's times Hamburg had been a customs-free zone. But following the city's accession to the German Reich it was deemed necessary to cordon off the Free Port and create a self-contained warehouse complex called the Speicherstadt.

It enabled Hamburg merchants to store imports and further process them - all free of duties and taxes. When the warehouse complex was ready in 1888, the Kaiser himself showed up for the opening ceremony.

The entire area was effectively foreign territory, surrounded by tall fences and isolated from the rest of Hamburg - until 2003, when they were torn down.

Today, the imposing red-brick warehouses are listed buildings and destined to be nominated as a UNESCO World Heritage site in 2014.

Guido Neumann, director of Hamburg media marketing relations, is enthusiastic about the "wave of creative startups in the historic Speicherstadt," where entertainment and IT industries rub shoulders with long established coffee, cocoa and tea traders.

"We strive for a careful mix of Speicherstadt business activity," notes Klaus Hadaschik, from the city's HHLA property company, which operates the warehouse facility.

Considered an architectural gem thanks to its ornate facades, towers and copper roofs, the Speicherstadt is a reminder of bygone days when pure muscle-power was still the driving force in the port of Hamburg.

Where once the Speicherstadt was a barrier separating the centre of Hamburg from the port area, it is now deemed a gateway to the adjacent HafenCity and its many attractions.

Conceived in 1997 and scheduled to take 20 years before its completed, HafenCity is a mixture of apartments and offices, cultural and leisure attractions, parks, shops and restaurants.

Ranked as one of the most daring and unusual urban development ventures in Europe, HafenCity encompasses a massive 160 hectares of land and water.

With a wind of change blowing through Hamburg, Europe's second largest port on the Elbe River, the HafenCity project is expected to provide housing for close on 20,000 people and workplaces for 40,000.

Currently 90,000 jobs in Hamburg depend entirely on port business and a further 128,000 are indirectly linked to such activity.

Scores of foreign investors have arrived in Hamburg in the past three years, among them the Chinese Shipping Company, which now operates its European headquarters from glossy steel-and-glass premises in the revamped harbour area.

"Hamburg has become China's gateway to Europe and Europe's gateway to China," maintains Nikolaus W Schues, a top executive of the Hamburg Chamber of Commerce and chief executive of F Laeisz, a shipping company with a fleet of more than 40 vessels.

Numerous Chinese firms are now active in Hamburg. In terms of container trade, China already is "one of the port's biggest customers," says Schues. (dpa)