// MARKET REPORT LOGISTICS & INDUSTRIAL

MARKET REPORT 2020

logistics & industrial

BREMEN // MARKET REPORT LOGISTICS & INDUSTRIAL

Logistics property market also looks back on a strong year 2020

Floor-space turnover reaches 301,000 m² The market for industrial and logistics space (rental as well ted to around 200,000 m² and thus shaped the market for as sale and new construction by owner-occupiers) in Bre- the entire year 2020. The largest deal was the new construc- men and immediate surroundings concluded the year 2020 tion project of over 60,000 m² for the retailer NANU NANA highly successful. Having generated a floor-space turnover in GVZ . The rental of 27,000 m² of space to Winit of approximately 301,000 m², the annual result is extremely , also in the GVZ Bremen, was registered as the stable at around 5% higher than the previous year’s result, second-largest turnover. The third largest deal was a lease provided the extraordinary, special year-end account from contract for around 23,000 m² of newly built floor-space 2019 is not included in the calculation. Thus, this year‘s result for the logistics service provider, Duvenbeck Logistics Europe significantly exceeds the five-year average of 249,000 m² by in the Hansalinie, Bremen. Mercedes’ rental contract for around 20 %. 18,000 m² at Bremer Kreuz was the fourth largest turnover The previous year’s record floor-space turnover of 407,000 of 2020. In fifth place is the space for Friedrich Bähr GmbH m² included a major 120,000-m² deal with e-commerce gi- & Co. KG, a packaging producer, which acquired an existing ant, Amazon. Even without this large-scale location, a suc- property measuring 16,500 m² - approximately 2,500 m² of cessful result of 287,000 m² or approximately 54% of de- which is office space, in the Obervieland district. mand for space was registered in 2019. Large-scale contracts exceeding 10,000 m² reached a A decisive factor for the dynamic year 2020 was the signi- market share of approximately 70% in 2020, whereby the ficantly higher proportion of new constructions than in the segment accounted for ten new contracts. The size range previous years, especially among owner-occupiers. The Co- between 5,000 and 10,000 m², on the other hand, only ac- vid19 crisis was clearly noticeable, but had only a minor im- counted for a total turnover share of around 4% and the size pact on floor-space turnovers in the local logistics property range between 2,500 and 5,000 m² for 12%. market. Initially, the first half of the year saw a short-term peak in demand for floor-space, which eased quickly and Dominant Retail Sector settled back at the previous level of demand. The first half With a share of 38%, retail logistics, which also includes e- of the year accounted for 138,000 m², or around 46%, and commerce, dominated the market as the sector with the the second half for 163,000 m², or around 54% of the de- highest turnover, due to the increased local stockpiling of mand for floor-space. goods and increased acceptance of online retailing, further accelerated by the Covid19 pandemic. This was followed by Ten 10,000 m² deals shape the market a major demand for space from logistics companies with a The ten largest registered deals in Bremen together amoun- share of about 20 %.

TAKE UP AVERAGE RENT TOP RENT TOP YIELDS 2020 2020 2020 2020 301.000 SQM 4,00 EUR / SQM 4,70 EUR / SQM 4,0 % (+5% IN 2019*) (4,00 EUR / m² IN 2019) (4,75 EUR / m² IN 2019) (4,35 % IN 2019) *WITHOUT AMAZON Regional Distribution: Few deals in the surrounding area Merely 5 % of the floor-space deals can be attributed to the surrounding area, which is far less than in previous years. This decrease, in the environs, is mainly due to the decline in available land in the industrial estates or to the continuing reluctance of local authorities with regard to land still available for potential logistics developments. Consequently, 95 % of floor-space turnovers was attributable to the Bremen metropolitan area. The GVZ alone accounted for 40% of total registered turnover.

Prime yields of 4 % for core products The market in Bremen for industrial and logistics space continues to be a landlords’ and sellers’ market, which is also reflected in rental incomes and yields. Rents are at a peak that has continued to rise slightly in recent years and amount to up to 4.70 EUR/m² for new modern logistics space in the premium segment. Rents in the light industrial sector continue to peak at 5.25 EUR/m². The average rental price stands at 4.00 EUR/m². Yields are low due to very high demand and are currently up to 4% for modern logistics spaces (core products) and up to 6.3% for warehouse space, with further yield compression expected in the medium term.

Stability of the asset class accelerates once more Logistics property investment will emerge fortified from the pandemic and the sustainability and stability of the asset class will accelerate again. A recently increased share of newly constructed spaces combined with high market absorption confirms the future viability of this asset class. In 2020 70 % of the floor-space turnovers are attributable to new-build projects and 30% to existing properties. Property prices could increase slightly in the medium term due to high demand and limited avai- lability of spaces. Availability is historically low, especially for existing high-quality spaces.

Outlook 2021: Lively market activity For 2021, Robert C. Spies expects a result between 220,000 and 270,000 m² depending on two major deals, expected to go through in the course of the year. One major problem remaining is the prevailing low vacancy rate, which in turn currently restricts free capacities in some segments. However, the vacancy rate is developing with a slight upward trend due to some pending project developments in Bremen. In principle, new spaces are available but rare.

In all likelihood, flows of goods and the warehousing strategies of companies, especially in the e-commerce, retail logistics, pharmaceutical and healthcare sectors, will adapt sustainably to the current situation in order to maximize their resistance to crises and minimize dependence on international freight traffic. Developments in the automotive and mechanical enginee- ring industries are being observed with interest. Thus, a continued high demand for logistics and production spaces is to be expected. Regarding Bremen, this applies to central, city centre locations and metropolitan areas as well as to the outskirts of the city. // MARKET REPORT LOGISTICS & INDUSTRIAL Key Figures

TAKE UP PRIME YIELDS

407

350 11,0

301 9,8 300 284 10,0

291 250 9,3 9,0 250 249 9,0 225 8,5 8,5 115 8,0 200 8,0 212 7,5 121 150 150 7,0 6,7 6,7 PROCENT

IN TSD. SQM TSD. IN 49 6,3 6,3 6,0 100 6,0 169 5,6 5,1 4,9 50 104 101 116 5,0 89 4,8 4,4 4,0 - 4,0 2016 2017 2018 2019 2020 2021 2015 2016 2017 2018 2019 2020

STOCK NEW BUILDING FORECAST Ø 5-YEARS MODERN LOGISTICS LIGHT INDUSTRIAL WAREHOUSE SPACE

TAKE UP IN SQM. (SECTOR) TAKE UP IN SQM. (LOCATION)

OTHER; 10%

CONSTRUCTION; 2% GVZ 40%

PRODUCTION; 13% BREMER KREUZ 18%

RETAIL; 38% HANSALINIE 13%

INDUSTRIEPARK 5%

HÄFEN 4% AUTOMOTIVE; 17%

OTHER 15%

SURROUNDING AREA CA. 20KM 5%

LOGISTICS; 20%

0% 10% 20% 30% 40% 50%

RENTAL DEVELOPMENT-MODERN LOGISTICS AVERAGE RENTS INDUSTRIAL

4,75 5,00 4,70 6,00 4,60 5,25 4,40 4,40 4,40 5,00 MAX: 4,70

4,00 4,00 4,00 4,00 Ø 4,00 3,70 3,50 3,50 Ø 3,50 MIN: 3,50 3,00 3,25 3,50 3,50 2,65 2,50 3,00 3,20 2,00 Ø 2,20

EUR/SQM/MONTH 2,00 1,50 EUR/SQM/MONTH 2,90 2,90 2,90 1,00 Ø 0,75 0,50 2,00 0,00 2015 2016 2017 2018 2019 2020 MODERN LOGISTICS LIGHT INDUSTRIAL WAREHOUSE SPACE FIELD WAREHOUSE

RENT RANGE AVERAGE RENT

Source: Robert C. Spies // MARKET REPORT LOGISTICS & INDUSTRIAL

Industrial zones Bremen (area)

Bremerhaven Cuxhaven ca. 65 km ca. 100 km

Osterholz-Scharmbeck

B74 A27

Bremer Wollkämmerei

A270

Industrie-Park B212 Riedemannstraße/Reiherstraße Industriehäfen Bayernstraße Horn-Lehe-West GVZ Überseestadt Technologiepark

Hamburg ca. 130 km A281 Hohentorshafen Oyten Delmenhorst A1 B6 Hemelinger Hafen Oldenburg B75 Bremer Kreuz ca. 50 km A28 Hansalinie Stuhr A27 ca. 50 km A1 Dreye

Groß Ippener Weyhe

Osnabrück ca. 120 km contact.

Björn Sundermann MANAGING DIRECTOR

Peter Kaiser HEAD OF RESEARCH

Robert C. Spies Industrial Real Estate GmbH und Co. KG Domshof 21 28195 Bremen T +49 (0) 421 173 93-43 E [email protected]

Caffamacherreihe 8 20355 Hamburg

Haarenstraße 16 26122 Oldenburg

Rathenauplatz 1A 60313 Frankfurt am Main

BLOXHUB / Bryghuspladsen 8 1473 Kopenhagen / Dänemark

// BREMEN // HAMBURG // OLDENBURG // FRANKFURT // COPENHAGEN LOGISTIK.ROBERTCSPIES.DE

State of data: 01.02.2021 The data reseach of the Bremen logistics & industrial market report is approached with special diligence. No responsibility is accepted for the accuracy of this infor- mation. Despite careful examination it can not be excluded that changes have taken place since then. Copying and publishing only with citing Robert C. Spies Bremen Market Report as the source. The general terms and conditions apply. All rights reserved.