The young singer's strong vocals echo around the dramatic brick-lined space of the Radialsystem, keeping us spellbound for an hour. Who would believe that this wonderful concert venue by a river was once a water processing plant?

Potsdamer Platz used to be in no man's land when the wall divided Berlin. Parts of the wall, decorated with art of course, have been preserved in Potsdamer Platz.

Looks are deceiving in Berlin. A rundown facade of broken bricks and faded paint overlaid with bright graffiti often hides the quiet buzz of commerce within. Many pockmarked, decrepit buildings shelter small businesses, studios, schools, and living spaces.

I'm with a group of Asia Pacific journalists being shown how mouldering old areas of the once divided city have been rejuvenated, and we're following the people running the visitor's programme in Germany's Federal Foreign Office. They're taking us into the rundown neighbourhood of Treptow beside the River Spree; it seems an odd place to start a tour about renewal.

But town planner Ares Kalandides believes it is here that we can best understand how the formerly communist parts of the city are regenerating themselves.

And he's right, for around a corner we run right smack into the middle of a moment of renewal: Berliners happily frolicking ... in the river? In the chilly fall air, yet? Not exactly, we learn.

This is the Badeschiff, a "swimming ship", anchored just off the riverbank. Berlin artist Susanne Lorenz ingeniously converted an unused cargo container (30m by 8m by 2m deep) into the Spree "swimming pool" in 2004, giving Berliners of all ages the chance to enjoy the closest thing to dipping in the mighty but polluted River Spree that runs through the city.

Badeschiff is just one example of countless creative re-adaptive uses of existing things and spaces here. It's no wonder that Unesco (the United Nations Educational, Scientific and Cultural Organisation) designated Berlin a City of Design in 2005.

Constant evolution

The city actually has a long tradition of being a centre for cutting edge architecture and design: "Berlin is the newest city I've ever seen!" Mark Twain had exclaimed after visiting in 1891.

Then the Berlin Wall went up in 1961 and the American author's "newest city" was dealt an almost mortal blow.

Berlin's unique, fragmented character is due not only to bombing destruction during the war and the east-west divide but also to the massive post-WWII reconstruction that took place in East Berlin in anticipation of a mass immigration that didn't happen.

Buildings were planned to house a population of over 5 million but, from 1949 onwards, and for over four decades, more then 2.5 million people fled Soviet rule. Then, when the hated wall came down on historic Nov 9, 1989, mass migrations began almost instantly to Berlin's western side, leaving behind a landscape of neglect and decay in the east.

"But Berlin used its creative industries to regenerate that part of the reunited city," says Kalandides, 43; he had previously worked with Volker Hassemer, West Berlin's urban planning senator in the 1980s.

A culture of improvisation sprang up as the remaining citizens tried to sustain life in the city's east. Landlords waived rents in hopes of attracting designers and artists, who would in turn bring in more people. If commercial uses could not be found for old halls and courtyards, they were turned into stages for performances and exhibitions that attracted visitors and tourists.

It helps that it's cheaper to live in this part of the city: the abundance of empty spaces, from lofts and apartments to studios, factories, and warehouses, makes it very affordable, especially for young, up-and-coming artists like our singer with the strong vocals.

Monthly rental begins at E5 (S$11) per square metre in this area while retail space in central Berlin - in high end areas such as Friedrichstrasse and Kurfurstendamm, Berlin's Fifth Avenue - can go for as high as E180 (S$390) per square metre.

Will Berlin lose its charm if all of its colourful courtyards and alleyways are turned into pristine but soulless spaces?

Impoverished students and artists gave the old areas their unique character and colour. And this did exactly what city planners hoped: it attracted more people to the area.

Artists tend to live in clusters. Over time, areas deemed "artistic" become, say, advertising industry hubs that begin drawing printers, graphic designers, and writers, who in turn form networks ... and populations expand.

Ironically, as more people came, this time with more money in their pockets and families in tow, and gentrification began, rents went up and forced the original occupants out. Fortunately, the state has since introduced rent control in some areas.

In these old areas, Berlin's unique neighbourhood culture still flourishes, with residents cherishing their own kiez, an old Slav word meaning quarter. Barbara Sichtermann and Ingo Rose explain in their book Living in Berlin that despite these neighbourhoods having a highly mixed population, there is a strong feeling of social cohesion with a pleasant urban village atmosphere much valued by its residents.

Prenzlauer Berg is one such neighbourhood. After the war, it was a sea of damaged buildings, populated by the impoverished, and drearily characterised by breweries, many abandoned.

"The neighbourhood turned into a creative industries hub to sustain itself," explains Kalandides.

"Public places along the river are being revitalised especially for the fashion industry. Labels like Hugo Boss and Escada have huge showrooms here.

"The Berlin Biennale office is housed in an old margarine factory. A Siemens cable factory was used for a fashion show. In fact, many old parts of the city have been turned into design facilities. We've had over 100, 000 start-ups since reunification. Most didn't go broke."

There are also plans to regenerate rundown areas by opening colleges nearby. Students will then occupy the cheap apartment blocks and increase related businesses like laundries and cafes in hopes it will bring a new lease of life to such neighbourhoods.

It's easy to feel young in Berlin as the city is constantly changing. Over half of its population is under the age of 44 and fewer than 20% are over 65. The 19 universities and institutions this area, including the revered Humboldt Universitat whose alumni includes Albert Einstein, ensure that its population remains youthful.

The former East Berlin's urban landscape is also characterised by the people's close link between work and home. Many entrepreneurs live in houses fronting the streets and run small businesses - such as small printing firms, graphic design studios, or shops - in an adjoining building in rear courtyards.

Such networks can be seen in the lively and colourful Kreuzberg neighbourhood.

The Hackesche Hofe, a series of eight courtyards, was hugely successful as an exemplary use of old buildings created in 1906. Once occupied by squatters, the buildings were sensitively renovated to maintain their unique architecture and turned into mixed premises housing art galleries, cafes, stylish restaurants, and underground movie theatres.

Kalandides says that a state fund for artists has been proposed to draw more artists and designers to Berlin. "Artists can benefit from a micro credit programme. They'd need backing so that banks will provide funds but the risks lie with the state."

Keeping the colour

For an old city - it's been around in one form or another since the 13th century - Berlin has a refreshing feeling of being uncompleted. From the window of the Federal Foreign Office, one can see cranes hovering over the horizon.

Town planner Ares Kalandides believes in creative and sensitive renewal of the rundown eastern areas of Berlin.

The streets are constantly changing - but not every Berliner wants a spanking new city.

"Some parts of Berlin can be rundown and trashy but it's really typical Berlin style; this sort of creative environment suits us," explains Annika von Taube, editor of Sleek fashion magazine, which shares a space with galleries and a dance studio in a classic, graffiti-scrawled building.

In a small alley off old Rosenthaler Strasse, I discover the Otto Weidt Museum for the Blind beside the Anne Frank Zentrum, a memorial museum.

From the alley, several different courtyards lead off, each with walls covered in distinct wall art and graffiti that changes every week. From the museum window, I look over a wall into the pristine courtyard of a popular pan-Asian restaurant. The contrast is startling.

"This is one of Berlin's most interesting places to discover,"' says Jennifer Heider, 27, a museum volunteer. "It will be sad if one day the authorities decide to paint the walls a uniform colour and remove all the people's expressions here. We'd be losing a part of Berlin."

Berlin's tolerant culture is what makes this city so interesting, diversified, creative, and popular. It's a city where you can be who you are, adds Kalandides.

"We believe in promoting a tolerant atmosphere if we want to promote creativity. I hope that in five years, the city will not be in a polished state. There are dirty, rundown parts that will be the city's greatest loss if they are spruced up."

Whatever plans are implemented, art and architectural historian Paul Sigel wrote for the Goethe Institute, they will be measured "by how clearly Berlin's contradictory historical cultural layers remain visible in the city of the 21st century, and whether the aspired goal of supporting and maintaining a closely knit and multi-functional inner city is achieved".