They were specifically designed to operate in the Baltic Sea, where armament and speed is more important than seaworthiness.
The German shipyard Stülcken was contracted to design and build the ships.
Stülcken was rather inexperienced with naval shipbuilding, but got the order, since the shipyards traditionally building warships for the German navies like Blohm + Voss, Howaldtswerke or Lürssen were all occupied constructing commercial vessels (no naval ship had been built in Germany since World War II).
Originally, they had only barreled weapons, but from 1976 to 1978 they were upgraded with guided missiles to increase their effectiveness against modern surface warships and were re designated Type 101A.
The design of the Hamburg class has been criticized for many of the same failures of the Kriegsmarine destroyers: too top-heavy and bad sea-keeping capabilities.