Facts and Figures

Warehouse/Logistics Rhine-Main Q1 2020

“The essence of knowledge is, having it, to apply it.“

Quote from Confucius

If you require any further information, please do not hesitate to contact us. We can put you in touch with our specialists who are always happy to provide you with expert support.

We look forward to hearing from you!

Dr. Konrad Kanzler Head of Research +49 (0) 69 - 970 505-614 [email protected]

Michael Weyrauch Head of Industrial Letting and Transaction +49 (0) 69 - 970 505-902 [email protected]

Tim Weißleder Director Industrial Letting +49 (0) 69 - 970 505-157 [email protected]

Lenny Lemler Director Investment +49 (0) 69 - 970 505-174 [email protected] Market Environment

Population development Frankfurt/Rhine-Main

Frankfurt Wiesbaden Mainz Darmstadt Offenbach The Rhine-Main region demonstrated a Inhabitants (12/2019): Frankfurt 758,574 / Wiesbaden 291,109 / Mainz 218,179 /

Darmstadt 162,428 / Offenbach 139,849 stable or slightly positively economic de- 800,000 velopment in the period from the begin- 700,000 600,000 ning of 2020 to the outbreak of the Covid- 500,000 19 crisis at the end of the first quarter. In 400,000 the most recent business surveys carried 300,000 out at the start of the year by the chambers 200,000 100,000 of industry and commerce in Hesse, the Frankfurta.M., Wiesbaden, Mainz,Darmstadt, Offenbach 0 companies surveyed provided more opti- Cities 2012 2013 2014 2015 2016 2017 2018 2019 : mistic assessments of both their current Source situation and future prospects at both regional and state level compared to the pre- Unemployment rate Frankfurt/Rhine-Main vious survey.

Frankfurt Wiesbaden Mainz Darmstadt Offenbach Germany Unemployment rate (03/2020): Frankfurt 5.2 % / Wiesbaden 6.1 % / Mainz 5.1 % / This was also reflected in the unemploy- Darmstadt 5.2 % / Offenbach 8.5 % / Deutschland 5.1 % 12.0 ment figures. At the end of March, rates of

11.0 unemployment in the five biggest cities in 10.0 the region, Frankfurt, Wiesbaden, Mainz, 9.0 Darmstadt and Offenbach, ranged from 8.0 FederalEmployment Agency , 7.0 5.1 % (Mainz) to 8.5 % (Offenbach). Thus,

6.0 the unweighted average rate fell by 0.2 5.0 percentage points compared to the previ-

4.0 FederalStatistical Office : ous year. 2013 2014 2015 2016 2017 2018 2019 Mrz 20

Source However, with the Covid-19 pandemic currently spreading worldwide and with Purchasing power per capita Frankfurt/Rhine-Main the resulting lockdown of the German

Frankfurt Wiesbaden Mainz Darmstadt Offenbach Germany economy, the general conditions have Purchasing power per capita (2019): Frankfurt €27,088 / Wiesbaden €26,366 / Mainz €25,285 / Darmstadt €25,756 / Offenbach €22,122 / Germany €23,779 changed fundamentally since mid-March. 30,000 Problems with cross-border traffic, the 25,000 drop in consumption in stationary retail or 20,000 the slump in sales in the automotive sector 15,000 are certainly having a negative impact on

10,000 the german warehouse and logistics mar-

5,000 kets at this time. In the medium term, however, there is a good chance that the ware-

0 : GfK GeoMarkting GmbH 2014 2015 2016 2017 2018 2019 house and logistics sector will come out of Source the Covid-19 crisis in better shape than other commercial asset classes. It could Traffic situation Frankfurt/Rhein-Main even be one of the winners. In addition to Air traffic Passenger numbers at Frankfurt Airport exceeded 70 million for the first time in 2019, amounting to a total of the high space requirements of food retail- 70.5 million. In contrast, the cargo volume fell by 3.9 % ers, an increased demand for storage, dis- to 2,128,000 tonnes owing to the difficult economic tribution and shipping centres can be ex- situation worldwide. Rail traffic Frankfurt central station is the most important ICE hub in pected in the future, especially from online Germany. More than 630 long-distance and local trains retailers. Furthermore, there could be an per day, 1,100 S-Bahn trains (regional trains) and 350,000 visitors and travellers. increase in demand by industry and trade Highway traffic Central hub for Germany’s long-distance road network companies for general storage options or with five motorway links. Frankfurter Kreuz is the supplementary warehouses to avoid future busiest motorway junction in Germany with about 350,000 vehicles per day. supply bottlenecks. Market Data

Take-up (lettings and owner occupation – in 1,000 sqm)

Take-up (in thousand sqm) Average take-up 10 years (602,000 sqm) The warehouse and logistics market in the

900 Rhine-Main region got off to a very slow 769 sqm 753 sqm 741 sqm 800 start in 2020. Space take-up by tenants 629 sqm 700 635 sqm and owner-occupiers amounted to around 600 569 sqm 500 478 sqm 91,000 sqm in the first three months of the 400 year. This means that the opening quarter 300 of 2020 ranks as one of the weakest quar- 200 91 sqm ters of the last ten years. The result was al- 100 apollo 0 most 47,000 sqm or 34 % below the previ- : NAI 2013 2014 2015 2016 2017 2018 2019 Q1 2020 ous year’s level, although the final quarter

Source of 2019 generated an even lower volume of 74,000 sqm. Thus, the trend towards a Take-up according to unit size Q1 2020 weaker level of market activity has contin- ued into 2020. 60,000

50,000 The latest result is primarily owing to a 1 Space Total: 91,000 sqm 42,000 sqm shortage of space that meets user require- 40,000 ments and the economic slowdown, alt- 30,000 hough the latter was showing first signs of 20 Spaces 18,000 sqm stabilisation at the beginning of the year. In 20,000 3 Spaces 5 Spaces 1 Space 12,000 sqm 10,000 sqm addition, a general calming of the market

9,000 sqm 10,000 was also evident during 2019 following a apollo

0 : NAI succession of record-breaking years. < 1,500 1,501 - 3,000 3,001 - 5,000 5,001 - 10,000 > 10,000 Source The potential impact of the Covid-19 pandemic only became apparent at the end of Take-up according to industry Q1 2020 the first quarter, and was of secondary im- portance for the recent take-up figures. The 8.3 % consequences of the pandemic are cur- 22.2 % rently reflected primarily by a wait-and-see 14.3 % Transport, Warehouse & Logistics attitude on the part of tenants and land-

Retail Trade lords. In addition, new leasing activities are

Industry & Manufacturing subject to tight limitations due to the lock-

Others & n/a down.

apollo The lease contract signed by an online re- NAI 55.2 % tailer in a project development within the in- Source: tercommunal commercial area of Limes had a major impact on the recent quarterly Definition market area result. This deal, which took place at the turn of the year and is included in the 2020 NAI apollo defines the Frankfurt/Rhine-Main market area for logistics and warehouses as the relevant available logistics and warehouse figure, not only represents the sole contract space between the cities of Butzbach in the north and Worms in the above 10,000-sqm, but also accounts for south, as well as between Bingen in the west and Aschaffenburg in around 46 % of the quarterly result with the east. 42,000 sqm of hall space. Without this deal, take-up would have been below The City of Frankfurt am Main forms the central point of the sub-mar- 50,000 sqm. Spaces smaller than 1,500 ket described. sqm formed the next biggest segment with a total volume of 18,000 sqm. Market Data

Development of rents Frankfurt am Main

Prime rent logistics space ≥ 5,000 sqm (in €/sqm) In all other size categories, take-up was be- Prime rent warehouse/logistics space - including industrial parks (in €/sqm) 8.00 tween 9,000 sqm and 12,000 sqm. Com-

7.00 pared to the first quarter of the previous

6.00 year, rental activity has decreased in all size 5.00 segments without exception, falling by be- 4.00 tween -22 % and -45 %. 3.00 2.00 The large deal signed in the Limes industrial

1.00 apollo zone affected many different aspects of the NAI 0.00 : market. For example, the “North-East” was 2013 2014 2015 2016 2017 2018 2019 Q1 2020 Source ranked as the leading sub-market in the first quarter with a 47.3 % market share. Selection of large current project developments Q1 2020 The traditionally strong south sub-market Friedrichsdorf - 19,000 sqm was next with a 23.1 % market share, and

Redevelopment by logistics developer P3 Logistic Parks of the former Milupa warehouse site on Max- again accounted for most of the deals Planck-Straße, with around 18,700 sqm of expected rental space. (42 %).

Weiterstadt - 27.000 sqm In terms of the different industries, retail ac- Construction of a logistics property with an expected 27,000 sqm of space on the former premises of counted for the lion’s share of 55.2 % as a Warner Chilcott Deutschland on Otto-Röhm-Straße by US investment and development company Hillwood. result of the abovementioned deal. The transport, storage and logistics sector was Mainz – 28,000 sqm

next with a 22.2 % share followed by in- Speculative construction of a logistics property with 28,000 sqm of usable space. FOUR PARX GmbH is

scheduled to start work on the project in Q2 2020. The planned usable space comprises 24,000 sqm of apollo dustrial/commercial companies (14.3 %). NAI

hall space, 900 sqm office space and 3,000 sqm for a gallery on the second floor with social rooms or : additional offices. The latter sector nevertheless represented Source the most important user group for warehouse and logistics spaces below 1,500 Selection of large completed developments Q1 2020 sqm, accounting for over 40 % of take-up. Frankfurt – 14,000 sqm

First construction phase of SEGRO CityPark in Frankfurt-Rödelheim with around 14,000 sqm of rental At this time, it is difficult to gauge how the space, of which half had been let by the end of the quarter. Additional warehouse, service and office space is to be built in future on the 14.5-hectare site, which was used by the US military until 2008. situation on the warehouse and logistics market in Frankfurt will develop over the Hammersbach – 43,000 sqm

coming months. Due to the economic Second building phase on the Limes inter-communal industrial area (Hammersbach, Limeshain and apollo slowdown and continuing uncertainty Büdingen) with approx. 43,000 sqm of rental space, which will be handed over to the tenant in mid-2020. NAI : among many industries and companies, Source we currently expect demand to be rather restrained. At the same time, there are quite a few current requests for space from industries that are experiencing an upswing as a result of the Covid-19 pandemic. The Outlook next 12 months e-commerce sector and food retailers are particularly worth mentioning here. How- Stock ever, most of these applications are for short-term lease contracts. Vacancy

Take-up

Prime rent NAI apollo Average rent Source: Submarkets

Submarkets , rents and available logistics stock Q1 2020

North-East North-West 3.90 – 5.40 €/sqm 3.50 – 6.50 €/sqm

Frankfurt 3.50 – 7.60 €/sqm

East Wiesbaden/Mainz 3.00 – 5.75 €/sqm 3.50 – 6,25 €/sqm

South-West 3.20 – 6.90 €/sqm South-East 3.80 – 6.50 €/sqm Top 5 – Key Facts

Logistics strongholds

Average 18,6 and prime rent for logistics space (≥ 5,000 sqm) Q1 2020 Average rent in €/sqm Prime rent in €/sqm

Berlin 5.10 6.00

Dusseldorf 4.70 5.50

Frankfurt/Rhein-Main 5.30 6.30 apollo Hamburg 5.00 6.30

Munich 6.60 7.10 NAI Source:

Prime yields Q1 2020 Prime office yields Prime retail yields Prime logistics yields

Berlin 2.65 % 2.80 % 3.75 %

Dusseldorf 3.10 % 3.10 % 3.80 %

Frankfurt a. M. 2.85 % 3.00 % 3.75 %

Hamburg 2.85 % 3.00 % 3.75 % apollo Munich 2.70 % 2.80 % 3.70 %

Total Ø = 2.85 % Ø = 2.95 % Ø = 3.75 % Source: NAI

Frankfurt/Rhine-Main Top take-up Q1 2020

Property + Location Tenant / owner occupier Utility area in sqm

Büdingen/Hammersbach/Limeshain Online retailer approx. 42,000

Gensingen Logistics service provider approx. 9,000

Darmstadt Logistics service provider approx. 4,500 apollo Steinheim Retailer approx. 4,100

Rodgau Food manufacturer approx. 3,200 Source: NAI

Top investments Q1 2020

Property + Location Purchaser Utility area in sqm

Logistics park Trebur / Trebur CBRE Global Investors approx. 106,000

apollo

Logistics property CargoCity / Frankfurt Investec Property Fund approx. 26,000 Source: NAI NAI Source: ONE PARTNER. ALL SERVICES. ALL ASSET CLASSES:

OFFICE – RETAIL – LOGISTICS – RESIDENTIAL

ASSET MANAGEMENT

BUILDING MANAGEMENT

PROJECT DEVELOPMENT

VALUATION AND RESEARCH

CORPORATE FINANCE ADVISORY

CORPORATE REAL ESTATE SERVICES

HEALTHCARE

SALES

LETTING

YOUR PROPERTY PARTNER – WE DISTINGUISH OURSELVES BY

This report is for information purposes only. It was compiled with the PARTNER ACTIVE IN DAY-TO-DAY BUSINESS utmost care and is based on information from sources that we regard as being reliable, but for which we assume no liability for their accuracy, MORE THAN 30 YEARS OF MARKET EXPERIENCE completeness or correctness. Estimates, figures and forecasts contained in this document are for guidance only. This report does not pur- sue the aim of promoting the purchase or sale of a particular financial INDEPENDENT – INNOVATIVE – SOLUTION-ORIENTED investment and thus should not be considered as such an offer. The reader of this report must make his or her own independent decisions in regards to correctness and completeness. NAI apollo assumes no liabil- LOCAL – NATIONAL – TOP NETWORK ity for direct or indirect damage that arises through inaccuracies, omis- sions or errors in this report. We reserve the right to make changes and/or additions to the information contained therein at any time. Neither FLEXIBLE – CUSTOMER-FOCUSED – COMPETENT the report nor parts t hereof may be published, reproduced or passed on without the written consent of NAI apollo.