Logistics Market Germany Property Report 2020

LOGISTICS MARKET GERMANY PROPERTY REPORT 2020

RESEARCH

Real Estate for a changing world CONTENTS LOGISTICS MARKET GERMANY 2020 CONTENTS

Executive summary...... 3

Logistics regions in Germany...... 4

Overview of the German logistics markets...... 5

Logistics investment...... 8

Berlin...... 10

Cologne...... 12

Düsseldorf...... 14

Frankfurt...... 16

Hamburg...... 18

Leipzig...... 20

Munich...... 22

Ruhr region...... 24

Stuttgart...... 26

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Publisher and copyright: BNP Paribas Real Estate GmbH Cover: BNP Paribas Real Estate Prepared by: BNP Paribas Real Estate Consult GmbH Status: January 2020 Realisation: KD1 design agency, Cologne

All rights reserved. This Property Report is protected in its entirety by copyright. No part of this publication may be reproduced, translated, transmitted or stored in a retrieval system in any form or by any means without the prior permission in writing of BNP Paribas Real Estate GmbH.

The statements, notifications and forecasts provided here correspond to our estimations at the time when this report was prepared and can change without notice. The data come from various sources which we consider reliable but whose validity, correctness or exactness we cannot guarantee. Explicitly, this report does not represent a recommendation of any kind, nor should it be regarded as forming a basis for making any decisions regarding investment or letting or renting property or premises. BNP Paribas Real Estate can accept no liability whatsoever for any information contained or statements made herein. LOGISTICS MARKET GERMANY 2020 EXECUTIVE SUMMARY EXECUTIVE SUMMARY

Second-best result of all time for the German logistics market

▸▸ Following a first quarter which suggested a rather average year was in the making for the German market for storage and logistics space, the take-up figures picked up appreciably at mid-term. The year closed with the second-best result of all time, a total take-up volume of 6.9 million m² falling barely 7 % short of the record result from 2018.

▸▸ The major logistics hubs (Berlin, Cologne, Düsseldorf, Frankfurt, Hamburg, Leipzig, Munich, Stuttgart) reported sharp drops as a whole, with total take-up of 2.3 million m² down by some 20 % on the previous year. This represents the weakest result of the past six years. A key contributory factor here was high land prices, which are making it increasingly difficult to market property developments at acceptable rent levels. Increases in take-up were reported only by Munich (419,000 m²; +72 %) – whereby this result was primarily attributable to a single mega-deal comprising over 230,000 m² – and Berlin (501,000 m²; +16.5 %).

▸▸ The main beneficiaries of the shortage of space in the major logistics hubs are the locations outside of the large conurbations. A new all-time-high take-up volume of 4.6 million m² was reported here. This was 2 % up on the record established in 2018.

Industrial companies top the rankings

▸▸ Despite uncertainties regarding the underlying economic situation, industrial companies head the sectoral breakdown on just under 41 %.

▸▸ Wholesale/retail companies also generated substantial demand, taking second place on a good 29 % ahead of the unusually weak logistics firms (25 %).

Marked rent rises in some locations

▸▸ Rents have risen in many locations as a result of the generally strained supply and demand situation, increased land prices and, above all, higher construction costs.

▸▸ The sharpest increase was reported in Düsseldorf, which witnessed a 6.5 % hike up to 5.75 €/m². The prime rents have also risen appreciably in Cologne (5.40 €/m²; +6 %), Hamburg (6.30 €/m²; +5 %), Frankfurt (6.60 €/m²; +5 %) and Stuttgart (7 €/m²; +4.5 %).

▸▸ With regard to the average rent, Berlin reported the largest increase, with a rise of 7 %. LOGISTICS REGIONS IN GERMANY

Denmark

HAMBURG

Bremen

BERLIN/ Poland Hannover/ BRANDENBURG Netherlands Braunschweig Münster/ Osnabrück a

i RUHR REGION Kassel LEIPZIG DÜSSELDORF

COLOGNE Erfurt Gera/Zwickau/

Chemnitz

Belgium Koblenz FRANKFURT AM MAIN Luxembourg Czech Republic Mannheim Nuremberg

Karlsruhe STUTTGART

Ulm Augsburg France

MUNICH

Important logistics markets Austria

Other logistics regions Switzerland © mapz.com - Map Data: OpenStreetMap ODbL © mapz.com LOGISTICS MARKET GERMANY 2020 OVERVIEW THE GERMAN LOGISTICS MARKETS AT A GLANCE

A CHALLENGING SETTING FOR THE LOGISTICS SECTOR LOGISTICS INDICATOR GERMANY After peaking at over 113 points at the beginning of 2018, Climate Situation Expectations Source: BVL/ifo the ifo logistics indicator went into continual decline, drop- ping below the 100 points mark in July 2019. The sub- 150 indicator for business expectations was hit particularly severely, showing only 90 points in September. This reflects the uncertainty about the further development of German 125 industry and the global economy. The indicator rallied slightly for the first time in December 2019, but remains 100 low, at 97.2. This presents a challenging setting for the logistics sector. With the signing of the first phase of a pact between the USA and China, certainty about Brexit and a 75 somewhat brightening economy, there are realistic prospects that the situation has now bottomed out. Real Estate GmbH, December 31, 2019 © BNP Paribas 50 2013 2014 2015 2016 2017 2018 2019

SECOND-BEST RESULT EVER, NONETHELESS Despite this backdrop, the second-best result of all time LIGHT INDUSTRIAL AND LOGISTICS TAKE-UP IN GERMANY was reported, with take-up of 6.9 million m² falling barely in m2 Average 5,870,000 m² 7 % short of the previous year’s record. The ten-year average was outstripped by a good 17 %. Following a somewhat 8,000,000 7,379,000 6,894,000 restrained start to the year, the second and third quarters 6,845,000

7,000,000 6,493,000

yielded above-average results. While take-up in the final 5,985,000 5,842,000 quarter was down on the two exceptionally good preceding 6,000,000 5,195,000 5,087,000

years, a total of 1.6 million m² was nevertheless well up on 4,638,000 5,000,000 the multi-year average. The fact that a very good result was 4,345,000 achievable despite the challenging underlying conditions is 4,000,000 attributable not least of all to ongoing restructuring pro- 3,000,000 cesses. These cover the still-growing e-commerce sector, for example, as well as space required by the automotive 2,000,000 sector for expansion in the field of e-mobility. 1,000,000 © BNP Paribas Real Estate GmbH, December 31, 2019 © BNP Paribas

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 STRONG DEMAND FROM INDUSTRY A notable development is that industrial companies clearly lead the sectoral breakdown with a share of almost 41 %, TAKE-UP BY SECTOR IN GERMANY although they were most seriously affected by the faltering in % economy. This shows that the outlined restructuring processes are triggering substantial demand for space. Mean- while, logistics firms take a markedly smaller share than 5.6 usual, at just 25 %. This is attributable above all to uncer- 24.7 Logistics firms tainty about the further development of global disrupting 29.1 Manufacturing factors. In contrast, wholesale / retail companies generated Wholesale/retail substantial demand, taking second place with a good 29 % Others share of total take-up and topping the 2 million m² mark again for the first time in three years. 40.6

4 | 5 NEW BUILDS CLAIM TWO-THIRDS SHARE KEY FIGURES FOR THE LOGISTICS MARKET IN GERMANY Although the supply bottleneck has eased in comparison Trend 2018 2019 to the preceding years in some locations, large units of 2020 modern space which are available at short notice remain a Take-up 7,379,000 m² 6,894,000 m² scarce commodity in many instances, in view of which new developments are crucial in order to meet the prevailing – Share of owner-occupiers 37.8 % 43.1 % demand. This is also reflected in the further increase in the share of newly completed space, which accounts for a good – Share of new buildings 62.2 % 67.6 % two thirds of total take-up and is just short of the all-time © BNP Paribas Real Estate GmbH, December 31, 2019 high from 2016.

LIGHT INDUSTRIAL AND LOGISTICS TAKE-UP BY REGIONS SHARP DROPS IN LOGISTICS HUBS The major logistics hubs (Berlin, Cologne, Düsseldorf, 2018 2019 Change (m²) (m²) (%) Frankfurt, Hamburg, Leipzig, Munich, Stuttgart) report sharp drops as a whole, with total take-up of 2.3 million m² down Important logistics markets by some 20 % on the previous year. This represents the Berlin 430,000 501,000 16.5% weakest result of the past six years. A key contributory fac- Cologne 225,000 140,000 -37.8% tor here is high land prices, which are making it increasingly difficult to market property developments at accept- Düsseldorf 280,000 157,000 -43.9% able rent levels. As a result, even more users are resorting Frankfurt 675,000 417,000 -38.2% to locations outside of the large agglomerations. Increas- Hamburg 483,000 373,000 -22.8% es in take-up are reported only by Munich (419,000 m²; +72 %) – whereby this result was primarily attributable to Leipzig 383,000 164,000 -57.2% a mega-deal comprising over 230,000 m² for KraussMaffei – Munich 243,000 419,000 72.4% and Berlin (501,000 m²; +17 %). Declining take-up was to be observed in Leipzig (164,000 m²; -57 %), Düsseldorf Stuttgart 184,000 153,000 -16.8% (157,000 m²; -44 %), Frankfurt (417,000 m²; -38 %), Cologne Subtotal 2,903,000 2,324,000 -19.9 % (140,000 m²; -38 %), Hamburg (373,000 m²; -23 %) and Stutt- gart (153,000 m²; -17 %). Other locations*

Ruhr region 524,000 493,000 -5.9 %

NEW RECORD OUTSIDE OF MAJOR LOCATIONS Other logistics regions (see map) 1,648,000 1,719,000 4.3 %

In contrast to the major conurbations (see above), the Rest of Germany 2,304,000 2,358,000 2.3 % other regions saw a slight rise in take-up to 4.6 million m² Subtotal 4,476,000 4,570,000 2.1 % (+2 %), thereby topping the record-breaking performance of 2018. While the Ruhr region, as one of the most impor- Total Germany 7,379,000 6,894,000 -6.6 % tant logistics areas in Germany, incurred a drop of 6 % to * Deals ≥ 5,000 m² © BNP Paribas Real Estate GmbH, December 31, 2019 493,000 m², this nevertheless represented the second-best result ever recorded. The 12 leading logistics regions, which BNP Paribas Real Estate additionally analyses on a regular basis, amassed 1.7 million m², which marks a good 4 % increase and also sets a new record. A similar picture applies throughout the rest of Germany, where take-up totalled just under 2.4 million m². This result also represents a new all- time high.

LOGISTICS MARKET GERMANY 2020 OVERVIEW

RISING RENTS TOP RENTS IN IMPORTANT LOGISTICS MARKETS 2019 saw a continuation of the rising trend for rents which in € / m² has been observable for some time now. This trend is a manifestation of the general supply and demand situation, Berlin 7.20 as well as increased land prices and above all higher con- Munich 7.00 struction costs. The prime rent has risen in more than half of the major logistics locations, with the sharpest increase Stuttgart 7.00 reported in Düsseldorf, which witnessed a 6.5 % hike up Frankfurt 6.60 to 5.75 €/m². The prime rents have also risen appreciably Hamburg 6.30 in Cologne (5.40 €/m²; +6 %), Hamburg (6.30 €/m²; +5 %), Frankfurt (6.60 €/m²; +5 %) and Stuttgart (7 €/m²; +4.5 %). Düsseldorf 5.75 A similar trend is to be observed for average rents, which Cologne 5.40 have risen at almost all major logistics hubs. Berlin (5.90 €/ Leipzig 4.50 m²; +7 %) reported the sharpest rise here, followed by the Real Estate GmbH, December 31, 2019 © BNP Paribas Ruhr region (4.10 €/m²; +5 %) and Frankfurt (5.10 €/m²; +3 %). 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00

OUTLOOK MAJOR CONTRACTS IN GERMANY The further development of the German markets for logis- Area Quarter Location Company tics and storage space will hinge not least of all on how (m²) quickly the economy as a whole gathers pace. On the posi- Q3 Vaterstetten KraussMaffei 230,000 tive side, the easing of the trade dispute between the USA and China and greater clarity on the implementation of Q2 Dingolfing BMW 100,000 Brexit should go some way to reducing uncertainty among companies as they consider further investments. Many Q3 Oberhausen EDEKA 90,000 restructuring processes will also continue, generating additional need for space. Against this backdrop, in 2020 de- Q3 Lich Wayfair 89,000 mand is expected to be strong once again by reference to Q1 Kösching Car manufacturer 87,000 the multi-year average, generating correspondingly high levels of take-up. As things stand, there is every indica- © BNP Paribas Real Estate GmbH, December 31, 2019 tion that a result in excess of 6 million m² and thus above the multi-year average is attainable. It remains to be seen whether it will continue in the direction of 7 million m² as in recent years, however. The problem of an inadequate supply of suitable sites will persist in the conurbations, making it difficult for a number of logistics hubs to raise their take-up to any substantial degree. Rents also harbour certain upward potential at some locations.

6 | 7 LOGISTICS INVESTMENT

SECOND-BEST RESULT OF ALL TIME LOGISTICS INVESTMENTS IN GERMANY The year-end result reported by the market for logistics in- Single investments in €m Portfolio investments in €m vestments in 2019 is extraordinary on a number of counts.

While 18 % short of 2017’s exceptional result, a transac- 7,000 tion volume of €7.5 billion was up by 4.5 % on the previous 6 , 224 year’s already strong performance and represents the sec- 6,000 4 , 737 ond-best result of all time. Whereas major pan-European 5,000 logistics platforms were the prime generators of turnover 4 , 009 4,000 in the record-breaking year, single transactions made a 3 , 193 2 , 956 2 , 790 particularly prominent contribution to the excellent result 2 , 611 3,000 2 , 473 2 , 235 2 , 175 in 2019. They account for a hefty €4.7 billion, which alone 1 , 998 1 , 825 2,000 1 , 623 would have been sufficient to achieve the third-best result 1 , 327 1 , 134 1 , 016 ever – an absolute record performance. 879 426

1,000 361 150 © BNP Paribas Real Estate GmbH, December 31, 2019 © BNP Paribas

2010 20112010 2012 2013 2014 2015 2016 2017 2018 2019 HIGH SHARE OF LARGE-VOLUME SINGLE DEALS The breakdown of investments by size category reveals how single transactions have gained in significance – though LOGISTICS INVESTMENTS BY € CATEGORY perhaps in a different way to what might have been ex- 2018 in %, total €7,202 m pected. Despite a marked increase in the number of trans- 2019 in %, total €7,527 m actions in the small-volume range up to €25 million, the shares amassed by these size categories grew only mar- 100 ginally. This is explainable by the fact that 2019 witnessed 43.9 not only an unusually large number of single transactions, 80 49.0 but also an accumulation of exceptionally large deals of ≥€100 m this type. The more than two dozen single deals in the 60 €50-<100 m segments over €50 million alone provide for turnover of €25-<50 m 21.9 almost €2.4 billion. 16.6 €10-<25 m 40 <€10 m 16.7 13.5

20 MAJORITY OF CAPITAL DERIVES FROM GERMANY 10.4 13.0

The diversified breakdown of take-up by buyer groups clear- 7.3 7.7 Real Estate GmbH, December 31, 2019 © BNP Paribas ly shows that logistics investments are now anything but 2018 2019 a niche product. Special-purpose funds remain the undis- puted leaders, accounting for a good 23 % share, followed by investment / asset managers (just under 14 %) and list- LOGISTICS INVESTMENTS BY BUYER CATEGORY ed real estate companies / REITs (12 %). The strong results in %, foreign investment share 48.7 % reported for corporates (11 %) and property developers (a good 10 %) are directly linked to the high share of individual Special-purpose funds 23.4 Investment/asset managers transactions. The same applies to the breakdown of take-up 13.6 by origin of buyer. The majority of capital (51 %) currently Listed real estate companies / REITs 12.0 originates from Germany, which is noteworthy with regard Corporates 11.0 to the very good overall result. The similarly outstanding Property developers 10.2 results of the two preceding years were largely attribut- Sovereign funds 7.6 able to large portfolio transactions, which are particularly Pension funds 6.4 popular among non-European buyers. It thus comes as no Equity/real estate funds 5.5 Open-ended funds 2.8 surprise that investors from North America (10 %) and the Property firms 2.4 Middle East (1 %) lost ground, while investors from Ger- Family offices 2.0 many and other European countries increased their share Other investors 3.1 © BNP Paribas Real Estate GmbH, December 31, 2019 © BNP Paribas (16 %). Asian buyers nevertheless show a strong result with 0 5 10 15 20 25 LOGISTICS MARKET GERMANY 2019 LOGISTICS INVESTMENT

a share of just under 22 %, as they were responsible for a LOGISTICS INVESTMENTS IN IMPORTANT LOGISTICS MARKETS number of large-volume single transactions. 2018 in €m, total €1,949 m 2019 in €m, total €1,840 m

MIXED PICTURE IN THE CONURBATIONS 500 465 445 444 At just above €1.8 billion, the transaction volume reported by the major conurbations is only slightly down on the 400 342 previous year (-6 %). A detailed look at turnover in the indi- 322 296 290 vidual markets reveals a very mixed picture, however. While 300 238

Frankfurt (€465 million) and Leipzig (€140 million) set new 216 records and Munich surpassed the previous year’s already 200 144 140 121

107

excellent result by a hefty 30 %, other cities lost substantial 97 95 ground. Cases in point here are Hamburg (-68 %), Düssel- 100 26

dorf (-50 %) and Stuttgart (-49 %), whose results also fell Real Estate GmbH, December 31, 2019 © BNP Paribas well short of the five-year average. While Berlin also re- Berlin Cologne Düsseldorf Frankfurt Hamburg Leipzig Munich Stuttgart ported a sharp drop in turnover (-28 %), this is primarily accountable to the previous year’s outstanding result. On closer inspection, the current total of €322 million actually DEVELOPMENT OF NET PRIME YIELDS emerges as the second-best result of the past ten years. Berlin Cologne Düsseldorf Frankfurt Hamburg Leipzig Munich Stuttgart

MARKED RISE IN PRICES 8.0 % As a result of the sustained run on logistics investments, yield compression also continued unabated in 2019. Mid- 7.0 % year saw the prime yield drop below the 4 % mark for the first time in the key conurbations (Berlin, Cologne, Düssel- 6.0 % dorf, Frankfurt, Hamburg, Munich and Stuttgart), and prices continued to soar up to the end of the year. The yields here 5.0 % currently stand at 3.70 %. Even in Leipzig, where prices are generally somewhat lower, the 4 % threshold is now looming. The net prime yield here fell by a further 45 basis 4.0 %

points over the past twelve months, to 4.05 %. Real Estate GmbH, December 31, 2019 © BNP Paribas 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

OUTLOOK The fact that the market for logistics investments once LOGISTICS INVESTMENTS BY ORIGIN OF CAPITAL again reported an excellent annual result, despite the in- in % creasingly tight supply situation in the area of the large 0.7 0.2 core portfolios, is a clear indication of an ever-broadening 9.9 demand base. 2020 is also set to be a strong investment Germany year, not least of all because logistics properties still have Asia the edge over other asset classes in terms of yields, despite 16.1 Europe the markedly increased prices. Given the inadequate supply 51.3 North America of large portfolios, it will primarily be large-volume single Middle East transactions that determine whether the €7 billion mark is Others topped for the fourth time in succession. As things stand, 21.8 the possibility of a slight drop in yields cannot be ruled out in isolated instances.

8 | 9 BERLIN

TAKE-UP HITS A NEW ALL-TIME HIGH LIGHT INDUSTRIAL AND LOGISTICS TAKE-UP IN BERLIN In keeping with the office and investment markets, Berlin’s in m² Average 405,000 m² market for logistics and storage space also reported a new 501 , 000 all-time high in 2019, even breaching the half a million 500,000 470 , 000 435 , 000 434 , 000 430 , 000 threshold for the first time, with take-up of 501,000 m². 407 , 000 385 , 000 This was 16.5 % up on the previous year’s strong result, 400,000 340 , 000 340 , 000

and surpassed the ten-year average by as much as 24 %. 310 , 000

The 400,000 m² mark was thus exceeded for the third time 300,000 in succession, continuing an impressive series and putting Berlin in first place among all major German locations. De- 200,000 mand was concentrated on the one hand on locations as close as possible to the inner city, with proximity to customers and an attractive labour pool representing the decisive 100,000

criteria here. Another focus was the area surrounding Berlin Real Estate GmbH, December 31, 2019 © BNP Paribas to the south, where an adequate supply of modern space is 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 available at short notice. Key deals included leases taken out by an e-commerce company in Kiekebusch (31,000 m²), by Kühne + Nagel in Oberkrämer (20,000 m²) and by Micro- TAKE-UP BY SECTOR IN BERLIN vast in Ludwigsfelde (just under 16,000 m²). in %

RELATIVELY EVEN SECTORAL SPREAD 1.7 12.0 For some years now, the demand situation has been shaped Wholesale / retail by the positive course of development for wholesale / retail Logistics firms 40.4 Manufacturing companies. Their performance was par for the course once 20.7 again in 2019, ranking first in the sectoral breakdown with Construction / crafts a good 40 % share. They were unable to repeat the extraor- Others dinary result from 2018, however, when they contributed more than half to the total take-up. Logistics firms take 25.2 second place, with a share of around one quarter almost 8 percentage points down on the multi-year average. Manu- facturing companies round off the leading trio, making a strong recovery from a poor showing in 2018 to claim a © BNP Paribas Real Estate GmbH, December 31, 2019 good 21 % share.

TAKE-UP BY SIZE CATEGORY IN BERLIN STRONG DEMAND IN ALL SIZE CATEGORIES in % A welcome aspect is the fact that the record take-up does not derive from a small number of major deals, but is 6.2 rather generated by a very broad demand base. Contracts 26.7 ≥20,001 m² for over 20,000 m² contribute only a good 6 % to the result. 18.8 12,001–20,000 m² Meanwhile, the smallest category up to 3,000 m² has again 8,001–12,000 m² demonstrated how important it is to the Berlin market, with 5,001–8,000 m² a share of just under 27 %. A major portion of this demand is 3,001–5,000 m² focused on central locations offering corresponding proxim- 14.9 17.8 ≤3,000 m² ity to customers. All the remaining market segments make roughly the same contribution to the overall result, with 15.6 shares in the range from 15 to 19 % of the total take-up.

Eberswalde Fehrbellin 11

Biesenthal Kremmen Oranienburg

24 10 Bernau bei Berlin

Hennigsdorf Rathenow Nauen Ahrensfelde Strausberg

vel Falkensee 10

H Neuenhagen Spr bei Berlin 2 BERLIN BRANDENBURG Ketzin/Havel Havel Havel Brandenburg an der Havel Potsdam Kleinmachnow 115 Schönefeld ee 1 pr Od S Core area Werder (Havel) er-Spree-Kanal 2 12 Periphery Schwielowsee Michendorf 10 Ludwigsfelde 10 Königs Wusterhausen Outer periphery 13

2 Beelitz Scharmützelsee 1 Schönefeld Trebbin Zossen Charlottenburg Brück 2 motorway interchange 9 © mapz.com - Map Data: OpenStreetMap ODbL © mapz.com

OWNER-OCCUPIER SHARE LOW MAJOR CONTRACTS IN BERLIN The traditionally low owner-occupier share in Berlin re- Area Quarter Location Company mained true to form in 2019. Contributing only 9 % to total (m²) take-up, it was once again markedly below the multi-year Q1 Kiekebusch E-commerce company 31,000 average (15 %). This is attributable in part to the supply of modern premises available at short notice, which is higher Q2 Oberkrämer Kühne + Nagel 20,000 than in other locations. The continuing high demand for central locations close to the inner city has maintained Q4 Ludwigsfelde Microvast 15,700 the pressure on rents in this market segment. This is particularly apparent in districts along the route of the urban Q2 Ludwigsfelde kfzteile 24 13,300 motorway, such as Charlottenburg, Tempelhof or Neukölln, Q2 Kremmen Automotive company 13,000 where the supply falls short of demand. As a consequence, the average rent has risen by 7 % to a current level of © BNP Paribas Real Estate GmbH, December 31, 2019 5.90 €/m². The prime rent remains very high, at 7.20 €/m².

KEY FIGURES FOR THE BERLIN LOGISTICS MARKET OUTLOOK As things stand, there is every indication that 2020 will once 2018 2019 Trend 2020 again yield an above-average result. Apart from improved Prime rent 7.20 € / m² 7.20 €/m² prospects for the economy as a whole and a continuing dy- namic trend for the German capital, specific developments Average rent 5.50 € / m² 5.90 €/m² such as Tesla’s decision to build a mega-factory in Grün- heide should also have a positive impact and generate ad- Take-up 430,000 m² 501,000 m² ditional demand. Against this backdrop, a further welcome aspect is that the supply side should be boosted somewhat – Share of owner-occupiers 22.1 % 8.7 % by development projects. Rents appear set to stabilise, at least in the first half of the year. – Share of new buildings 50.9 % 47.7 %

10 | 11 COLOGNE

LACK OF SPACE CURBS TAKE-UP LIGHT INDUSTRIAL AND LOGISTICS TAKE-UP IN COLOGNE The long-established problem of a far too inadequate sup- in m² Average 199,000 m² ply on the Cologne market for logistics and storage space left its mark once again in 2019. Take-up totalling only 350,000 305 , 000 140,000 m² falls almost 38 % short of the previous year’s 300,000

result and is around 30 % below the ten-year average. A 250 , 000 237 , 000 primary reason for this low level is the fact that not a single 250,000 225 , 000 210 , 000 deal was reported over 20,000 m², owing above all to the 192 , 000 200,000 lack of space available at short notice as well as suitable 167 , 000 145 , 000 140 , 000 sites for new properties. The absence of any large contracts 150,000 118 , 000 alone accounts for a good two thirds of the decline in take- up. The most significant deals included lets to a logistics 100,000 firm in Kerpen and to Kurt Rothschild GmbH & Co. KG in 50,000

Bedburg, in each case comprising some 17,000 m². Real Estate GmbH, December 31, 2019 © BNP Paribas 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

LOGISTICS FIRMS CLAIM ALMOST 50 % SHARE As in 2018, logistics firms again accounted for almost half TAKE-UP BY SECTOR IN COLOGNE (48 %) of the total take-up and continue to dominate the in % market. Manufacturing companies maintained their relative share, contributing a good quarter to the result. In contrast, wholesale / retail companies nosedived, with a share of 6 % 15.9 representing their weakest result of the past ten years. Logistics firms 3.0 The shortage of space is revealed particularly starkly here: Manufacturing 5.8 Wholesale and retail companies generally need space at 48.3 Wholesale/retail short notice in order to increase their storage and distri- Construction / crafts bution capacities, and such space is virtually non-existent. Others

At the same time, their demand is increasingly focused on 27.0 comparatively central locations offering proximity to their customers. The competition with other usages is particularly keen in these locations, however – especially with office developments, for which suitable sites are also desperately scarce in Cologne. © BNP Paribas Real Estate GmbH, December 31, 2019

SMALL AND MEDIUM-SIZED PROPERTIES IN DEMAND TAKE-UP BY SIZE CATEGORY IN COLOGNE With no large deals over 20,000 m² reported, mid-range in % contracts between 8,000 and 20,000 m² have taken over the lead, contributing just under 57 % to the overall result. This is well above their multi-year average, which stands 15.0 24.3 12,001–20,000 m² at around one third. Smaller deals up to 5,000 m² also rep- 8,001–12,000 m² resent a mainstay of the market once again. Their share of 5,001–8,000 m² 38 % is roughly in keeping with their customary level. The 23.4 3,001–5,000 m² fact that the small-volume segment also reported a rela- ≤3,000 m² tively moderate result in absolute terms shows that it is also affected by the supply bottleneck, however. 4.9 32.4

3 61 1

46 r

e p p u 44 Monheim W am Rhein Opladen Große Dhünntalsperre

Rommerskirchen 59 Leverkusen Odenthal Bedburg Pulheim 1 Bergisch Gladbach er Erft R g h g

57 e A i 4 Bergheim n

61 Frechen 3 Sindorf COLOGNE 4 4 Rösrath Hürth 2 Kerpen 1 555 gger A Erft R in ur e Rh röl 4 Brühl Wesseling CoreB area 553 Troisdorf Periphery Düren Niederkassel Lechenich ieg S Outer periphery Sieg Eifeltor 1 S 565 container terminal w

r is u t 2 Cologne/Bonn airport R 61 Erft 59 3 1 Bonn © mapz.com - Map Data: OpenStreetMap ODbL © mapz.com

RENTS ON THE RISE MAJOR CONTRACTS IN COLOGNE The rent trends reflect the competition for the scant space Area Quarter Location Company available. The prime rent is up by 6 % year-on-year, at (m²) 5.40 €/m², and the average rent has also risen by a good Q3 Kerpen Logistics firm 17,000 2 %, to 4.45 €/m². With regard to structural aspects of the market, it is also to be noted that the owner-occupier share, Q4 Bedburg Kurt Rothschild 17,000 which is traditionally low in Cologne, has fallen once again and now stands at only a good 6 %. Meanwhile, newly built Q4 Pulheim Food manufacturer 10,000 space has gained significant ground, accounting for almost 57 % of the overall result. This is also symptomatic of the Q4 Pulheim DHL 10,000 shortage of space, which forces many users to resort to new Q3 Kerpen Saint-Gobain-Gruppe 9,000 developments.

OUTLOOK The Cologne market for logistics and storage space is likely KEY FIGURES FOR THE COLOGNE LOGISTICS MARKET to face the same structural backdrop in 2020. At present, there is no sign of any significant increase in the supply 2018 2019 Trend 2020 of space. This means that it will once again prove impos- Prime rent 5.10 €/m² 5.40 €/m² sible to meet a certain portion of the prevailing demand. As such, a take-up result in line with the multi-year average Average rent 4.35 €/m² 4.45 €/m² (200,000 m²) would count as a success. A substantially better result would only appear possible if a number of large- Take-up 225,000 m² 140,000 m² scale developments were to be started after all. A degree of upward potential is discernible for rents on account of the – Share of owner-occupiers 10.6 % 6.2 % underlying supply / demand ratio. – Share of new buildings 13.1 % 56.9 %

12 | 13 DÜSSELDORF

SHORTAGE OF SPACE LIMITING TAKE-UP LIGHT INDUSTRIAL AND LOGISTICS TAKE-UP IN DÜSSELDORF The market for storage and logistics space in Düsseldorf in m² Average 285,000 m² (including the surrounding area) fell short of the preceding 500,000 years’ very good performance in 2019, reporting the worst 452,000 result of the past ten years, with take-up at 157,000 m². 395,000 Following the below-average take-up in the first three 400,000 quarters of 2019, the market also failed to rally in the tra- 341,000 280,000 280,000 278,000 ditionally more lively final quarter. Take-up for the year was 300,000 267,000 thus 44 % down on the previous year’s level. The demand 234,000 side is actually no weaker than in the preceding years, 200,000 167,000 however. While many companies are still on the lookout for 157,000 new or larger premises, they commonly fail to find suitable properties on account of the strained supply situation. Any- 100,000

one seeking larger or modern premises faces the likelihood Real Estate GmbH, December 31, 2019 © BNP Paribas of a long wait before they find suitable properties. 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

UNUSUAL SECTORAL SPREAD TAKE-UP BY SECTOR IN DÜSSELDORF The breakdown of take-up by sectors is highly unusual and in % can be seen as an indication of the sparse supply. Logistics firms, for example, which tend to generate high levels of 0.4 demand and have frequently signed large-volume contracts 8.1 in the past, contributed only one fifth to total take-up. This Wholesale / retail share, which is also low by reference to the multi-year av- 20.8 39.1 Manufacturing erage, comes as no surprise in view of the number of con- Logistics firms tracts – almost four times as many of which were signed Construction / crafts in 2018 compared to 2019. Wholesale / retail companies Others led the ranking at the end of 2019, contributing a share of over 39 %. This figure includes the year’s biggest deal: the 31.6 construction of premises comprising 30,000 m² of space for online bathroom equipment and furnishings retailer Reuter in Mönchengladbach. The largest number of contracts in absolute terms was concluded by the manufacturing sec- © BNP Paribas Real Estate GmbH, December 31, 2019 tor, however, which also claimed a significant share, at just under 32 %. TAKE-UP BY SIZE CATEGORY IN DÜSSELDORF in % FEW MAJOR DEALS The fact that the size category over 20,000 m², which nor- mally generates the highest level of take-up, contributed 19.2 26.4 ≥20,001 m² only 19 % to the overall result indicates that the lack of 12,001–20,000 m² major deals in particular was accountable to the short sup- 8,001–12,000 m² ply. This share is some 10 per-centage points down on its 5,001–8,000 m² multi-year average. Meanwhile, smaller storage units up to 20.5 3,001–5,000 m² 3,000 m² claim a share of 26 %. In so doing, they not only 9.9 ≤3,000 m² head the breakdown of market segments but have also 10.0 almost doubled their absolute take-up volume. This can be 14.0 interpreted as clear evidence that demand remains buoyant and that the weak result is rather attributable to structural aspects of the supply and demand situation. © BNP Paribas Real Estate GmbH, December 31, 2019 LOGISTICS MARKET GERMANY 2020 DÜSSELDORF

40 57 52 43

59 Velbert

Krefeld 44 n

i e 1 Ratingen Rh 61 44 Willich Meerbusch 1 Mettmann Wuppertal

N 3 i 52 e r s DÜSSELDORF 46 52 Mönchengladbach Neuss 57

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Core area Grevenbroich Dormagen Periphery 44 1 46 GOuterroße Dhünnperipherytalsperre 3 59 rft Düsseldorf E 1 Leverkusen airport © mapz.com - Map Data: OpenStreetMap ODbL © mapz.com

HIGH OWNER-OCCUPIER SHARE MAJOR CONTRACTS IN DÜSSELDORF The shortage of space in the segment impacts particularly Area Quarter Location Company severely on logistics firms, which commonly require large (m²) units of space at short notice. This assessment is borne out Q1 Mönchengladbach Reuter 30,000 by the fact that letting accounts for only just under two thirds of total take-up – as compared to a long-term aver- Q4 Mönchengladbach Logistics service provider 18,000 age of 78 %. Owner-occupiers, who are able to plan ahead on a longer-term basis, contribute over 36 % to the overall Q2 Grevenbroich Essertec 14,100 result. The prime rent in the core area has risen by 6.5 % to 5.75 €/m² and the average rent has increased slightly by Q2 Düsseldorf ABC-Logistik 11,600 2 % to 5 €/m². Q3 Neuss Teekanne 10,200

© BNP Paribas Real Estate GmbH, December 31, 2019 OUTLOOK A slight easing of the supply situation currently appears to be on the cards for 2020. In conjunction with an expected KEY FIGURES FOR THE DÜSSELDORF LOGISTICS MARKET rallying of the economy as a whole, there is every indication that the current year will deliver a better result than 2018 2019 Trend 2020 2019, and take up above the 200,000 m² mark appears quite Prime rent 5.40 € / m² 5.75 €/m² possible. There is no sign of a substantially higher result in the region of the record take-up of the past, however. With Average rent 4.90 € / m² 5.00 €/m² regard to rents, sideways movement at the current levels presently appears the most probable scenario. Take-up 280,000 m² 157,000 m²

– Share of owner-occupiers 17.0 % 36.1 %

– Share of new buildings 48.4 % 59.9 %

14 | 15 FRANKFURT

MARKED DECLINE IN TAKE-UP LIGHT INDUSTRIAL AND LOGISTICS TAKE-UP IN FRANKFURT The more restrained demand which emerged in the third in m² Average 499,000 m² quarter on Frankfurt’s market for logistics and storage 675 , 000 673 , 000 space continued in the final three months of the year. As a 700,000 consequence, the annual take-up of 417,000 m² was 38 % 599 , 000 600,000

down on the previous year’s result. This represents the 498 , 000 470 , 000 463 , 000 lowest level of the past nine years, due first and foremost 500,000 445 , 000 432 , 000 417 , 000 to a very weak end to the year. Take-up in the final three 400,000 months totalled only 53,000 m². In the nationwide rank- 320 , 000 ings, the Frankfurt market thus cedes the leading position 300,000 which it held in the two previous years to Berlin and is level with Munich in third place. The most important transac- 200,000 tions include Ikea’s owner-occupier deal (33,000 m²) at 100,000

the former Opel factory site in Rüsselsheim, a lease agree- Real Estate GmbH, December 31, 2019 © BNP Paribas ment taken out by a logistics firm for a good 31,000 m² in 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Rodenbach and two other lets, each for around 20,000 m², in Gernsheim and Bodenheim. TAKE-UP BY SECTOR IN FRANKFURT in % POOR RESULT FOR LOGISTICS FIRMS The drop in take-up compared to 2018 is largely attributable to a very weak result for logistics firms, which tradi- 14.9 1.0 Logistics firms tionally play a very important role in Frankfurt. While just 30.3 managing to hold on to the lead with a share of 30 %, they Wholesale/retail are nevertheless responsible for a good 90 % of the overall Manufacturing Construction / crafts decline and reported the lowest level of the past ten years. 26.1 Key contributory factors here are, firstly, that the dispro- Others portionately high number of large-volume deals which they have concluded in recent years cannot be repeated every 27.7 year, while secondly the subdued state of the economy as a whole tends to curb expansionary drive in the export sector in particular. Wholesale / retail companies follow up in second place on 28 %, just ahead of manufacturing companies © BNP Paribas Real Estate GmbH, December 31, 2019 on a good 26 %.

TAKE-UP BY SIZE CATEGORY IN FRANKFURT FEW MAJOR DEALS in % As a result of the reduced demand from logistics firms, major deals in excess of 20,000 m² contribute less to total take-up than in the preceding years, in both relative (25 %) 18.0 25.3 ≥20,001 m² and absolute (105,000 m²) terms. Meanwhile, the small- 12,001–20,000 m² volume segment up to 3,000 m² was comparatively stable, 8,001–12,000 m² contributing 18 % to the overall result. While the mid-range 10.4 5,001–8,000 m² size categories gained ground in relative terms, in absolute 3,001–5,000 m² terms they also reported lower take-up for the most part. 9.6 19.7 ≤3,000 m² The category from 8,000 to 12,000 m² forms an exception here, with a share of 17 % representing a good result also in 17.0 relation to the multi-year average.

3 n h a HESSE L 5 45 48 Butzbach

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R h e i n 61 Bad Homburg Gelnhausen 661 l 45 66 e os M 5 FRANKFURT Hanau

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61 60 M a

63 i

n RHECoreINL areaAND-PFALZ 5 Darmstadt Periphery Wörrstadt R 3 h e 67 i Outer periphery n

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SLIGHT EASING OF THE SUPPLY SITUATION MAJOR CONTRACTS IN FRANKFURT Following a supply bottleneck which has dogged the Frank- Area Quarter Location Company furt logistics market in recent years, the situation has (m²) now eased somewhat. This is attributable to an increase Q2 Rüsselsheim IKEA 33,000 in available space as a result of a number of property

developments in several locations within the market terri- Q3 Rodenbach Logistics company 31,400 tory and also to the current reduced level of demand from logistics firms. Rents have nevertheless risen, not least of Q1 Gernsheim Wholesale/retail company 20,600 all as a result of higher construction costs and land prices. The prime rent thus increased by 5 % over the previous Q2 Bodenheim Food manufacturer 20,300 year’s result to 6.60 €/m² and the average rent also fol- Q1 Dietzenbach Eichler-Kammerer 18,000 lowed this trend, rising to 5.10 €/m² (+3 %).

OUTLOOK The prospects for 2020 will crucially hinge on whether KEY FIGURES FOR THE FRANKFURT LOGISTICS MARKET and how quickly the economy as a whole rallies. A stable macro-economic setting and a positive export trend as a 2018 2019 Trend 2020 mainstay of demand are particularly important to logistics Prime rent 6.30 €/m² 6.60 €/m² firms. As things stand, there is every indication that take- up will be higher than in 2019. The increase is likely to be Average rent 4.95 €/m² 5.10 €/m² moderate, however, in view of which a result on a par with the multi-year average (500,000 m²) would count as a suc- Take-up 675,000 m² 417,000 m² cess. The supply of space will probably increase slightly, while rents are expected to remain stable on the whole. – Share of owner-occupiers 11.8 % 33.8 %

– Share of new buildings 55.6 % 57.0 %

16 | 17 HAMBURG

STRONG FINAL QUARTER – WEAK RESULT LIGHT INDUSTRIAL AND LOGISTICS TAKE-UP IN HAMBURG A very lively fourth quarter (132,000 m²) was unable to defy in m² Average 541,000 m² the signs which had emerged in the first nine months of the year: As a result of the acute shortage of supply, the 800,000 745 , 000

Hamburg market for storage and logistics space (includ- 700,000 667 , 000 617 , 000 ing the surrounding area) reported its weakest result since 595 , 000 600,000 565 , 000 2008, with take-up totalling 373,000 m². The ever tighter 483 , 000 461 , 000 450 , 000 supply / demand ratio is reflected in particular in the share 500,000 450 , 000 373 , 000 of space appointed to a modern standard, which did not 400,000 even amount to one third of the total volume in 2019. At the same time, virtually no sites remain available for new 300,000 buildings, which means that the prevailing demand still has 200,000 to be met by existing properties, particularly with regard to 100,000

premises in the vicinity of the city proper. Such properties Real Estate GmbH, December 31, 2019 © BNP Paribas are often not in an adequate state of repair, however, and do 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 not meet the present-day requirements of modern logistics firms and industrial companies. This represents a crucial location factor for large-scale companies in particular, in TAKE-UP BY SECTOR IN HAMBURG view of which many firms are unable to pursue their expan- in % sion plans in Hamburg. Not a single deal in the range above 35,000 m² has been reported in the market territory in the 2.7 past three years. 6.8 Logistics firms 17.0 Wholesale/retail

A DECADE DOMINATED BY LOGISTICS FIRMS 48.6 Manufacturing The port – the third-largest container handling terminal in Construction / crafts Europe – continues to be a driving force behind the success Others of the city’s economy. As such, it is no surprise that logis- 24.9 tics firms lead the breakdown of take-up by sectors, with a share of just under 49 %. This is the eighth time that they have constituted the predominant sector in Hamburg in the past decade. Wholesale / retail companies contributed one quarter to the total volume, their share of 93,000 m² also © BNP Paribas Real Estate GmbH, December 31, 2019 marking a slight increase over the previous year in absolute terms (+5 %). Industrial companies surpassed their multi- year average to take third place on around 17 %. TAKE-UP BY SIZE CATEGORY IN HAMBURG in %

SHIFT TOWARDS SMALLER-SCALE DEALS 3.3 7.8 The breakdown of take-up by size categories reveals the 22.4 ≥20,001 m² current structural imbalance on the Hamburg market. The 12,001–20,000 m² segment below 5,000 m² accounts for almost half of the 20.1 8,001–12,000 m² total take-up (47 %) – the highest share of the past ten 5,001–8,000 m² years in this category. At the same time, the share of space 3,001–5,000 m² in the large-scale segment (over 12,000 m²) is lower than 25.1 ≤3,000 m² at any time in the past decade, at just 11 %. Only two deals 21.3 were reported in this size category.

7 1 21 POEL Marne Bad Segeberg Itzehoe Bad Bramstedt Brunsbüttel Dassower See Wismar Cuxhaven Elbe 23 Lübeck 20 Elbe Freiburg (Elbe) 20 Henstedt- Bad Oldesloe 20 27 Glückstadt Ulzburg

s t e Elmshorn 7 1 Großer Ratzeburger 21 See Schweriner Norderstedt Ratzeburg See (Außensee) Uetersen

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27 Ost E e lb me Lüneburg e 14 üm W 7 Core area

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Bremen 1 E lbe Delmenhorst 1 Harbour 28 27 Achim (Weser) 1 Weyhe Soltau Munster 2 Billbrook/Allermöhe W Uelzen eser 7 © mapz.com - Map Data: OpenStreetMap ODbL © mapz.com

RENT TREND REMAINS MODERATE MAJOR CONTRACTS IN HAMBURG As virtually no property developments are being realised Area Quarter Location Company in the Hamburg market territory, the prime rent has risen (m²) only moderately, by 30 cents to 6.30 €/m². The lack of new United Logistics & Q4 Hamburg 29,000 space is reflected even more clearly in the average rent, Distribution which remains virtually unaltered in comparison to the Q4 Bad Oldesloe E-commerce company 12,100 previous year, rising by just +1 % to 4.95 €/m². While sectors nutwork Q1 Hamburg 11,700 such as city logistics or e-commerce are quite willing to Handelsgesellschaft accept higher rents in pursuing their expansion strategies, no adequate supply is available to meet their requirements. Q4 Kaltenkirchen E-commerce company 11,400 Market zones such as the harbour or Billbrook / Allermöhe Q2 Bad Oldesloe Hertling 9,000 are also virtually fully developed. Brownfield developments could acquire a significant role here in the coming years, as © BNP Paribas Real Estate GmbH, December 31, 2019 numerous existing buildings are approaching the ends of their economic lives. KEY FIGURES FOR THE HAMBURG LOGISTICS MARKET

NEW SPACE URGENTLY REQUIRED 2018 2019 Trend 2020 Hamburg’s logistics market finds itself in something of Prime rent 6.00 €/m² 6.30 €/m² a dilemma. There is an urgent need for expansion of the available supply of space in order for the Hamburg logistics Average rent 4.90 €/m² 4.95 €/m² market to remain attractive. Local authorities in the area surrounding the city are pursuing increasingly restrictive Take-up 483,000 m² 373,000 m² policies, however. In the light of this situation, 2020 may realistically be expected to close with a similar result to – Share of owner-occupiers 20.4 % 17.5 % 2019, despite the good outlook for the economy as a whole. – Share of new buildings 28.5 % 14.5 %

18 | 19 LEIPZIG

BELOW-AVERAGE RESULT LIGHT INDUSTRIAL AND LOGISTICS TAKE-UP IN LEIPZIG Following a record year for the Leipzig market for logistics in m² Average 220,000 m² and storage space in 2018, 2019 failed to build on this per- 383 , 000 formance. Take-up totalling 164,000 m² was almost 26 % 400,000

short of the ten-year average and down by some 57 % on 350,000 320 , 000 the previous year’s result. The decline in take-up is attrib-

300,000 270 , 000

utable in particular to the fact that, in contrast to the re- 250 , 000 250,000 cent high-volume years, not a single deal over 35,000 m² 219 , 000 210 , 000 187 , 000 was reported. The most prominent deals in 2019 involved a 200,000 164 , 000 retailer and a manufacturing company: Rossman is building 150,000 a regional depot (26,000 m²) in the Brehna industrial zone 110 , 000 90 , 000 on the A 9 motorway and a developer is proceeding with a 100,000 construction project comprising 23,000 m² for a company 50,000

from the automotive sector in Großkugel. In general, how- Real Estate GmbH, December 31, 2019 © BNP Paribas ever, demand far outweighs the supply of existing premises 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 available at short notice and appointed to modern standards, particularly in the vicinity of the airport and along the axis of the A 14 and A 9 motorways. TAKE-UP BY SECTOR IN LEIPZIG in %

0.3 RESULT DETERMINED BY THREE SECTORS Take-up is surprisingly evenly spread across three different 3.4 sectors. Industrial / manufacturing companies again head Manufacturing 26.3 the rankings, with a 35.5 % share. Wholesale / retail compa- 35.5 Wholesale/retail nies are only just behind, contributing 34.5 % to the overall Logistics firms result. These shares are above the multi-year average for Supply/disposal both demand groups. While logistics firms also attained Others a substantial result, with a good 26 % share, this figure is markedly below the multi-year average (44 %). The own- 34.5 er-occupier deals for Dematic (18,000 m²) and Schäflein (14,000 m²) contributed significant volumes to the total take-up for logistics firms.

MAJOR DEALS SHAPE THE MARKET In contrast to the preceding years, no deal over 35,000 m² TAKE-UP BY SIZE CATEGORY IN LEIPZIG was reported. Consequently, the segments from 12,000 to in % 20,000 m² and 20,000 to 35,000 m² made a particularly large contribution to total take-up, with five deals and a 5.7 share of just under 62 %. Deals with a volume from 8,000 to 8.0 ≥20,001 m² 12,000 m² account for an unusually high share of take-up 30.0 6.8 12,001–20,000 m² in relation to the multi-year average, at just under 18 %. In 8,001–12,000 m² contrast, the usually well represented contracts for up to 5,001–8,000 m² 8,000 m² contributed only a good one fifth, primarily as a 17.7 3,001–5,000 m² result of an inadequate supply. ≤3,000 m²

31.8

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38 u 1 l d e E Schkeuditz l 71 2 be Taucha Wurzen Merseburg S a a Brandis Core area le LEIPZIG Geiseltalsee 14 Oschatz Riesa Markranstädt 38 t Peripheriy u r t 9 s 38 n Zwenkauer Grimma U See Outer periphery U M ns Weißenfels u trut lde 72 SchkeuditzSömmerda Leisnig 14 1 motorway 71 Borna e interchange l a a Elb S e Industrial zone 2 Nossen Nord/BMW Zeitz 4 Apolda 17 3 Star Park Ilm 9 Altenburg

RENTS REMAIN STABLE MAJOR CONTRACTS IN LEIPZIG Rents for storage and logistics space in the Leipzig market Area Quarter Location Company territory were stable over the course of 2019, and presently (m²) still stand at 4.50 €/m² for the prime rent and 3.70 €/m² Q1 Brehna Rossmann 26,000 for the average rent. The prime rent continues to be paid in inner city locations or in the vicinity of the airport and Q2 Kabelsketal Automotive Cluster 23,000 the heartlands of the automotive clusters, on account of the prevailing shortage of space there. In contrast, rents for Q1 Leipzig Dematic 18,000 old existing premises which are not appointed to a modern standard are currently under pressure. Pleasing rent trends Q2 Kabelsketal Schäflein 14,000 apply in the peripheral locations, which are becoming in- Q4 Leipzig Mobis Parts 10,000 creasingly popular among e-commerce companies in particular, by virtue of their good transport infrastructure. © BNP Paribas Real Estate GmbH, December 31, 2019

OUTLOOK KEY FIGURES FOR THE LEIPZIG LOGISTICS MARKET The Leipzig logistics market looks back on a year of muted activity which is attributable first and foremost to the lack 2018 2019 Trend 2020 of large-volume deals. This is not unusual, however, as a Prime rent 4.50 €/m² 4.50 €/m² large number of large contracts were concluded in the previous year, as a result of which the supply is currently lower. Average rent 3.70 €/m² 3.70 €/m² As such, the supply side once again constituted the limiting factor obstructing higher take-up in 2019. In the light of Take-up 383,000 m² 164,000 m² various new developments (such as the Beiersdorf site in the Seehausen 2 industrial zone) combined with a general – Share of owner-occupiers 20.5 % 45.7 % economic upswing, a higher take-up again appears realistic. – Share of new buildings 81.1 % 61.3 %

20 | 21 MUNICH

NEW RECORD THANKS TO MEGA DEAL LIGHT INDUSTRIAL AND LOGISTICS TAKE-UP IN MUNICH The Munich market for logistics and storage space reported in m² Average 294,000 m² a new all-time take-up record of 419,000 m², surpassing the previous year’s result by 72 %. The ten-year average was 500,000 also outstripped by almost 43 %. The fact that around 55 % 419 , 000 of this take-up was attributable to a single deal puts this ap- 400,000 332 , 000 322 , 000 parently remarkable result into context, however. The deal 312 , 000 297 , 000 287 , 000 in question concerns a let to KraussMaffei in Vaterstetten 300,000 278 , 000 243 , 000 comprising 230,000 m² of space. Without this exceptional 241 , 000 207 , 000 contract, the result would be below the 200,000 m² mark 200,000 and thus appreciably lower than in recent years. This is explainable in part by the continuing shortage of space, which makes it difficult for many companies to find suitable prem- 100,000

ises. At the same time, a slight decline in demand is to be Real Estate GmbH, December 31, 2019 © BNP Paribas observed especially among automotive component suppli- 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 ers as a result of the difficult situation facing the automotive industry. TAKE-UP BY SECTOR IN MUNICH in % INDUSTRY GENERATES THREE QUARTERS OF TAKE-UP 0.1 The sectoral statistics are dominated by the KraussMaf- 5.3 fei deal, which grants industrial companies a 75 % share. 5.3 The relative shares of take-up for the remaining two ma- Manufacturing jor demand groups are correspondingly low. Both whole- 14.2 Wholesale/retail sale / retail companies and logistics firms also contributed Logistics firms less volume in absolute terms, however. E-commerce com- Construction / crafts panies, while essentially highly expansionary in character, Others continue to experience considerable difficulties finding premises and sites in central locations offering the required 75.1 proximity to customers for last mile logistics. Logistics firms are increasingly being forced to seek properties in other regions on account of the severe lack of available space in the city area and the exurbs. © BNP Paribas Real Estate GmbH, December 31, 2019

GAINS FOR SEVERAL SIZE CATEGORIES TAKE-UP BY SIZE CATEGORY IN MUNICH The fact that the category over 20,000 m² accounts for in % more than half of the total take-up is attributable entirely to the above-stated major deal. Demand was also buoyant 13.5 once again in the small-volume segment up to 3,000 m², ≥20,001 m² which traditionally plays an important role for the Munich 8.8 12,001–20,000 m² market, resulting in a 13.5 % share of take-up. Contracts 8,001–12,000 m² spanning the range from 5,000 to 8,000 m² follow up in 5,001–8,000 m² third place on 10 %. Increases in the contributions by the 10.4 3,001–5,000 m² size categories from 3,000 to 5,000 m² and between 12,000 55.0 5.1 ≤3,000 m² and 20,000 m² were also reported, even though their shares 7.2 may appear low at first sight, at just under 9 % and a good 7 % respectively.

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RENTS STILL STABLE MAJOR CONTRACTS IN MUNICH Rents remain stable on the whole. This is due in particular Area Quarter Location Company to the very limited supply of sites, as a result of which there (m²) is only a small volume of newly completed space enter- Q3 Vaterstetten KraussMaffei 230,000 ing the market which is appointed to a modern standard and thus justifies higher rents. Against this background, the Q3 Weilheim i. OB Xylem 15,000 prime rent remains unchanged at 7 €/m². While in 2018 this rent level was only attained for high-quality premises Q1 Hohenbrunn Trading enterprise 11,500 in absolute prime locations, it now also applies in certain poorer locations on account of the short supply of ad- Q2 Odelzhausen Noerpel-Gruppe 9,800 equate properties, however. The average rent is similarly Q3 Weßling Messring 7,200 unchanged at 6.10 €/m².

OUTLOOK Demand in 2020 looks set to be at a similar level to in the KEY FIGURES FOR THE MUNICH LOGISTICS MARKET preceding years. Slight drops, e. g. in the automotive sector, should be offset by other sectors, such as e-commerce. 2018 2019 Trend 2020 As things stand, take-up on a par with the average for Prime rent 7.00 €/m² 7.00 €/m² recent years appears the most likely scenario. The pronounced shortage of supply which is increasingly limiting Average rent 6.10 €/m² 6.10 €/m² take-up above all in the large-volume segment is unlikely to change, as the few new developments are generally let Take-up 243,000 m² 419,000 m² prior to completion. In view of this situation, a slight rise in the prime rent cannot be ruled out. – Share of owner-occupiers 2.7 % 10.7 %

– Share of new buildings 39.0 % 69.3 %

22 | 23 RUHR REGION

THIRD-BEST RESULT LIGHT INDUSTRIAL AND LOGISTICS TAKE-UP IN THE RUHR REGION* While just short of the previous year’s total (-6 %), the in m² Average 417,000 m² market for logistics and storage space in the Ruhr region 1,000,000 nevertheless achieved the third-best result of the past ten 915 , 000 years, with take-up totalling 493,000 m². The fact that the multi-year average was surpassed by a hefty 18 % also in- 800,000 dicates that 2019 was a good year. As such, the clearly discernible upward trend of the past few years has continued 600,000 524 , 000 493 , 000 unabated. This is attributable first and foremost to a broad 475 , 000 demand base, which is confirmed by the spread of take- 400,000 337 , 000 292 , 000 up across the entire market territory. The most prominent 281 , 000 239 , 000 deals included two owner-occupier transactions – for Edeka 195 , 000 in Oberhausen (90,000 m²) and Ferdinand Bilstein GmbH & 200,000

Co. KG in Gelsenkirchen (45,000 m²) - and a lease taken out Real Estate GmbH, December 31, 2019 © BNP Paribas by retail company L-Shop-Team GmbH in Unna for 53,500 m². 2011 2012 2013 2014 2015 2016 2017 2018 2019 * Deals ≥ 5,000 m²

WHOLESALE/RETAIL AMASSES HALF OF TAKE-UP TAKE-UP BY SECTOR IN THE RUHR REGION* Following a slightly weaker result in 2018, wholesale / re- in % tail companies have picked up again, amassing half of the 1.0 1.1 total take-up. Apart from the above-mentioned let, a lease on 15,800 m² taken out by an e-commerce company in Unna 4,4 also contributed to this performance, along with a host of 22.116,9 small and medium-sized deals. Logistics firms, which led the Wholesale / retail rankings in 2018, slip down into second place with a share Logistics firms of one quarter. This result markedly below their customary 49.9 Manufacturing share is primarily attributable to a lack of major deals, the 19,9 58,5 Construction / crafts likes of which boosted the result a year before. Meanwhile, 25.9 Others manufacturing companies gained ground, reporting their best performance of recent years with a 22 % share.

KEEN DEMAND ACROSS ALL SEGMENTS * Deals ≥ 5,000 m² © BNP Paribas Real Estate GmbH, December 31, 2019 A particularly notable aspect is the comparatively low share of 42 % for large-volume deals over 20,000 m², which is markedly down on recent years. Demand is consequently TAKE-UP BY SIZE CATEGORY IN THE RUHR REGION focused to a large extent on small and medium-sized deals. in % This scenario is highlighted by the fact that all other size categories report an increase in both their relative shares 10,6 of turnover and their absolute volumes. The lively market is 19.1 thus underpinned by a broad base, rather than hinging on a 9,5 ≥20,001 m² small number of major deals. 42.4 6,8 12,001–20,000 m² 14.9 8,001–12,000 m² 5,000–8,000 m²

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RELATIVELY HIGH SHARE OF NEW SPACE MAJOR CONTRACTS IN THE RUHR REGION At just under 57 %, the share of newly completed space re- Area Quarter Location Company mains at the high level which traditionally prevails in the (m²) Ruhr region. One contributory factor here is the availability Q3 Oberhausen Edeka 90,000 of sites, on which major developments have now been realised, following protracted approval phases. As the supply Q2 Unna L-Shop-Team 53,500 situation for construction sites remains strained, the share of newly completed space in total take-up could stagnate Q4 Gelsenkirchen Ferdinand Bilstein 45,000 or decline in the long term, however. The increased land prices and construction costs are already impacting on Q4 Werne Imperial 20,300 rents, with the prime rent rising by 4 % compared to 2018, Q1 Unna E-commerce company 15,800 at 4.90 €/m². This level of rent is now no longer attained solely in Duisburg, but increasingly also in the central and © BNP Paribas Real Estate GmbH, December 31, 2019 eastern Ruhr region.

KEY FIGURES FOR THE LOGISTICS MARKET IN THE RUHR REGION* OUTLOOK In view of the broad demand base and somewhat brighter 2018 2019 Trend 2020 prospects for the economy as a whole, 2020 is also expect- Prime rent 4.70 €/m² 4.90 €/m² ed to be a good year for the logistics market. Supply is likely to decline slightly in the course of the year, although no Average rent 3.90 €/m² 4.10 €/m² pronounced bottleneck situations are to be reckoned with. Companies seeking large units will nevertheless have to Take-up 524,000 m² 493,000 m² resort to new developments in many instances, in view of which a further rise in the prime rent in particular is prob- – Share of owner-occupiers 35.1 % 37.4 % able. Assuming large-volume deals pick up, take-up could top the 500,000 m² mark again. – Share of new buildings 75.5 % 56.7 %

24 | 25 STUTTGART

SUPPLY CONTINUES TO RESTRICT TAKE-UP LIGHT INDUSTRIAL AND LOGISTICS TAKE-UP IN STUTTGART The Stuttgart market for logistics and storage space re- in m² Average 162,000 m² mains unable to exploit the existing potential to the full, 292,000 with total take-up of 153,000 m² below what might have 300,000 been expected in view of the good and stable demand situation. The result is thus almost 17 % down on the previ- 205,000 ous year, and also falls short of the multi-year average by 200,000 184,000 almost 6 %. This trend is primarily attributable to the far 153,000

too inadequate supply which has prevailed for some time 131,000

now, and which stems in part from the special geograph- 108,000 ic situation of the core market in Stuttgart. An additional 100,000 contributory factor here is the highly restrictive policies of 61,000 many local government authorities when it comes to des-

ignating sites for development. This situation is further Real Estate GmbH, December 31, 2019 © BNP Paribas highlighted by the fact that modern newly completed space 2013 2014 2015 2016 2017 2018 2019 is barely available not only in Stuttgart itself, but also in other preferred locations, such as Böblingen, Sindelfingen or Esslingen. This is increasingly prompting companies to TAKE-UP BY SECTOR IN IN STUTTGART resort to regions situated further away, particularly in the in % Stuttgart-Karlsruhe-Rhine-Neckar triangle. 2.0 2.4

14.5 MANUFACTURING COMPANIES THE CLEAR NO. 1 Manufacturing The structure of Stuttgart’s economy is such that manufac- Wholesale/retail turing companies traditionally represent the key mainstay Logistics firms of demand. They also maintained this special standing in 21.2 Construction / crafts 2019, contributing a share of 60 % to take-up. The automo- 59.9 Others tive sector clearly heads this segment, with a continuing high demand for space despite its current difficulties – not least of all in order to pursue developments in the field of electric mobility. As such, it comes as no surprise that the let to Daimler in Waiblingen constituted the largest transaction (42,000 m²). Wholesale / retail companies follow up in © BNP Paribas Real Estate GmbH, December 31, 2019 second place on 21 %, with a lease taken out for 9,900 m² in Rottenburg by outdoor specialist Bergfreunde making a sizeable contribution here. The leading trio is completed by TAKE-UP BY SIZE CATEGORY IN STUTTGART logistics firms, with a share of just under 15 %. in %

BROAD SPREAD OF DEMAND 20.3 27.6 ≥20,001 m² The let to Daimler took large-volume deals over 20,000 m² 12,001–20,000 m² to the top of the ranking, with a share of just under 28 %. 8,001–12,000 m² Aside from this outlier, the volume is spread particularly 12.5 5,001–8,000 m² evenly across the remaining size categories, which each 3,001–5,000 m² contribute between 12 and 20 % to the overall result. The 12.5 ≤3,000 m² fact that smaller contracts for up to 3,000 m² lead the re- 15.0 maining categories with a share of around 20 % indicates 12.1 that demand is very buoyant overall.

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n r i Welzheim h a R Rastatt k c e Le N Waiblingen Aalen Leonberg Schorndorf 5 Weil der STUTTGART Baden-Baden Stadt 1 Esslingen Calw Sindel ngen am Neckar Göppingen Heidenheim 2 8 an der Brenz Core area Geislingen Achern L'Ill Nürtingen an der Steige Periphery n i Herrenberg 7 e ar h ck R e N / Outer periphery Nagold n i h Tübingen R Stuttgart 8 Le Langenau 1 5harbour Reutlingen Laichingen Horb am Airport Neckar 2 r 8 Leinfelden-Echterdingen Necka 81 Donau © mapz.com - Map Data: OpenStreetMap ODbL © mapz.com Ulm

LOW OWNER-OCCUPIER AND NEW-BUILD SHARES MAJOR CONTRACTS IN STUTTGART The highly limited availability of sites for logistics usages, Area Quarter Location Company both in Stuttgart’s core market and in many local authority (m²) areas in the extended market territory, is reflected in the Q2 Waiblingen Daimler 42,000 owner-occupier and new-build shares, which are low by nationwide standards and have also fallen in comparison to Q1 Böblingen Car manufacturer 19,000 2018. Owner occupiers account for only 16 %, and the share of new space is also markedly lower than in many other Q2 Rottenburg Bergfreunde 9,900 logistics regions, at 41 %. Against this backdrop, it is no surprise that the tight supply situation is reflected in the rent Q1 Fellbach Medi1one medical 8,000 trend. Accordingly, the prime rent has risen by 4 % over the Guadagno Transport & Q3 Reutlingen 7,000 past twelve months to 7 €/m², and the average rent has also Logistik increased, by almost 2 % to a current level of 5.40 €/m². © BNP Paribas Real Estate GmbH, December 31, 2019

OUTLOOK KEY FIGURES FOR THE STUTTGART LOGISTICS MARKET No substantial change to the underlying supply and demand situation is foreseeable for 2020. This means that the 2018 2019 Trend 2020 market will continue to be shaped by a supply bottleneck Prime rent 6.70 €/m² 7.00 €/m² which is likely to limit the take-up of space. On the other side of the balance, demand is likely to remain good, and Average rent 5.30 €/m² 5.40 €/m² may even increase slightly in the face of a gentle economic upturn. Against this backdrop, take-up in 2020 on a par with Take-up 184,000 m² 153,000 m² the previous year would count as a success. As things stand, a slight rise in prime and average rents thus appears to – Share of owner-occupiers 39.5 % 16.3 % represent the most likely scenario for 2020. – Share of new buildings 70.1 % 41.2 %

26 | 27 BUSINESS LINES 5 in Germany German locations

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