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In Berlin’s battle for buzz, the rapidly transforming districts in the eastern quarters have been the winners for more than a decade. That is beginning to change, as the former heart of West Berlin, an area now known as City West, begins to reclaim its traditional position as the German capital’s pre-eminent area for prime apartment living.

City West, spreading across a handful of Berlin districts, is roughly centered around Kurfürstendamm—a broad shopping avenue planned in the late 19th century as Germany’s answer to the…