H1 | August 2021 Research Germany Logistics- and Industrial Market Overview Demand for logistics space remains high German market for logistics space already breaking records by the mid-point of the year In the first six months of 2021, the German market for an exceptionally high take-up result was recorded here warehousing and logistics space registered a record high in the first half of 2020, due to a single major deal of over take-up volume of around 3.88 million sqm for the first 100,000 sqm. The two largest lettings in the Big 5 were half of the year, exceeding the previous year’s result by registered in Kleinostheim and Hammersbach in the 28% (H1 2020: 3.03 million sqm). The result was also 16% Frankfurt region, each with over 40,000 sqm. and 25% above the corresponding 5- and 10-year aver- ages, respectively. While take-up by owner-occupiers The strongest demand came from companies from the remained almost unchanged (-4%), take-up as a result distribution/logistics sector which accounted for around of lettings increased by 42% year-on-year. The second 38% of take-up. Retailers accounted for a further 29% quarter contributed 2.1 million sqm to this excellent re- and manufacturers for 21%. Take-up increased signifi- sult. It was only the second time that the 2 million sqm cantly in the > 5,000 sqm size category: with 58 deals, mark was exceeded in a 3-month period; the first time 23 more than in the first half of 2020, demand for space ever was in the third quarter of 2020 (2.16 million sqm). was high among many companies. Unlike a year ago, the negative effects of the COVID-19 The lack of available land is a problem in many regions, pandemic are no longer being felt. Demand for logistics and consequently only around 191,000 sqm of new ware- space continues to increase on a broad basis, and logis- housing space was completed in the Big 5 in the first six tic services providers, retailers and manufacturers are months. A further 1.15 million sqm is currently under still on the lookout for space. We therefore expect the construction, with just 30% of this being built specula- 7 million sqm mark to be exceeded again this year. tively. Most speculative construction activity is taking place in the Hamburg region, where around 180,000 sqm Hamburg records the highest take-up is under construction and not yet let. of the Big 5 regions Approximately 1.11 million sqm of space was taken up in Prime rents remain stable the first six months in theBig 5 regions (Berlin, Düssel- Prime rents for warehouse space in the > 5,000 sqm size dorf, Frankfurt, Hamburg and Munich), 25% more than in category in the Big 5 have been stable over the last three the same period last year; the result fell just short of the months. In a twelve-month comparison, however, the record take-up volume of 1.2 million sqm registered in Düsseldorf region recorded an increase of €0.50/sqm/ the first half of 2011. The corresponding 5- and 10-year month to €6.00/sqm/month. At €7.10/sqm/month, the averages were both exceeded by around 15%. highest rent was paid for top-quality space in the Munich region. The Hamburg and Frankfurt regions followed The development of the market has varied across the re- with €6.40/sqm/month and €6.20/sqm/month, respecti- gions. The Hamburg region benefited from several high- vely. Space in this category is significantly cheaper in volume deals over 20,000 sqm and more than doubled Berlin at €5.50/sqm/month. its result year-on-year; at 360,000 sqm, it recorded the highest volume of take-up in the Big 5. Take-up was also Outside the Big 5, the Ruhr area tops the leaderboard higher in the Berlin (+74%), Düsseldorf (+17%) and Frank- In the first half of 2021, around 2.77 million sqm was taken furt (+8%) regions. Only the Munich region recorded a up outside the Big 5 regions*. This exceeded the previ- significant decline (-60%), but comparability is limited as ous year’s figure by 30% (H1 2020: 2.14 million sqm) and * Note: in these regions, we only account for take-up of space greater than 5,000 sqm. Cover page 2 Contacts Warehousing Take-up Germany* * Outside the Big 5 only deals ≥ 5,000 sqm, in the Big 5 (Berlin, Düsseldorf, Hamburg, Frankfurt and Munich) deals ≥ and < 5,000 sqm Status: July 2021, Source: JLL the corresponding 5-year average by 17%. While take-up By the mid-point of the year, the Ruhr area again top- by owner-occupiers was stable year-on-year (+3%), take- ped the leaderboard of regions outside the Big 5 with a up as a result of lettings increased by 44%. total of around 278,000 sqm. The largest deal was regis- tered in Dorsten, where Levi Strauss Germany GmbH The strongest demand for space came from companies signed a lease for around 67,000 sqm for its new Euro- in the distribution/logistics sector who were responsible pean distribution centre. The Hanover/Brunswick and for more than 1 million sqm (corresponding to 38% of Bremen regions followed in second and third place with the total take-up) and several high-volume deals in ex- 251,800 sqm and 216,000 sqm, respectively. cess of 50,000 sqm. This included the largest letting of the year so far: BLG Logistik signed a contract for around More than two-thirds of the space was taken up in new 95,000 sqm of space for a new logistic centre in Bremen. buildings or development projects; this result rises to The retail sector was responsible for 35% of take-up 90% when only considering units larger than 30,000 sqm. (981,000 sqm), with around 450,000 sqm accounted for by eCommerce companies alone. Manufacturers accoun- ted for 23% of the take-up volume. Cover page 3 Contacts Warehousing Take-up total (sqm) 2020 H1 2020 H1 2021 % 9) Berlin 1) 451,700 165,900 288,400 73.8 Düsseldorf 2) 173,000 83,300 97,200 16.7 Frankfurt 3) 472,500 262,900 284,700 8.3 Hamburg 4) 498,300 169,900 360,000 111.9 Cologne 5) only space ≥ 5,000 sqm 187,400 31,900 101,400 217.9 Munich 6) 307,200 208,400 82,700 -60.3 Stuttgart 7) only space ≥ 5,000 sqm 107,700 56,200 78,900 40.4 Ruhr Area 8) only space ≥ 5,000 sqm 844,500 349,500 278,100 -20.4 Warehousing Take-up (≥ 5,000 sqm) 2020 H1 2020 H1 2021 % 9) Berlin 1) 251,500 84,600 168,100 98.7 Düsseldorf 2) 108,400 44,300 23,500 -47.0 Frankfurt 3) 329,500 188,600 212,900 12.9 Hamburg 4) 345,500 95,200 300,700 215.9 Cologne 5) 187,400 31,900 101,400 217.9 Munich 6) 205,900 156,400 10,000 -93.6 Stuttgart 7) 107,700 56,200 78,900 40.4 Ruhr Area 8) 844,500 349,500 278,100 -20.4 Prime Rents for Warehousing Space (≥ 5,000 sqm) (€/sqm/month) Q4 2020 Q2 2020 Q2 2021 % 9) Berlin 1) 5.50 5.50 5.50 0.0 Düsseldorf 2) 5.50 5.50 6.00 9.1 Frankfurt 3) 6.20 6.20 6.20 0.0 Hamburg 4) 6.40 6.40 6.40 0.0 Cologne 5) 5.80 5.10 5.80 13.7 Munich 6) 7.10 7.10 7.10 0.0 Stuttgart 7) 6.80 6.80 6.80 0.0 Ruhr Area 8) 5.25 5.25 5.50 4.8 Completions (sqm) 2020 H1 2020 H1 2021 % 9) Berlin 1) 349,800 116,400 82,500 -29.1 Düsseldorf 2) 151,600 85,000 0 n/a Frankfurt 3) 129,100 39,000 45,200 15.9 Hamburg 4) 9,000 300 63,500 21066.7 Cologne 5) only space ≥ 5,000 sqm 38,800 0 12,000 n/a Munich 6) 35,000 8,200 0 n/a Stuttgart 7) only space ≥ 5,000 sqm 119,500 99,000 21,200 -78.6 Ruhr Area 8) only space ≥ 5,000 sqm 405,900 66,600 146,200 119.5 1) The Berlin city area and surrounding communities are included in the study. 2) The following towns are covered: Düsseldorf, Erkrath, Hilden, Ratingen, Neuss, Krefeld, Kaarst, Korschenbroich, Haan, Grevenbroich, Langenfeld, Meerbusch, Monheim, Rommerskirchen, Dormagen, Willich. 3) Coverage includes in the entire Frankfurt region, bounded by Butzbach (Wetterau-Kreis) in the north, by Aschaffenburg in the east, by Bensheim/Heppenheim (Kreis Bergstraße) in the South and by Wiesbaden and Mainz in the West. 4) Coverage includes Hamburg and four surrounding submarkets: North limited by Norderstedt, Quickborn, Kaltenkirchen, Henstedt-Ulzburg; East limited by Bargteheide, Ahrensburg, Trittau, Schwarzenbek, Geesthacht; South limited by Lüneburg, Winsen (Luhe), Buchholz, Buxtehude; West limited by Wedel, Uetersen-Tornesch. 5) The considered market area comprises the cities and communities Cologne, Leverkusen, Bergisch Gladbach, Rösrath, Troisdorf, Niederkassel, Wesseling, Brühl, Hürth, Frechen, Pulheim, Bedburg, Bergheim, Elsdorf, Kerpen, Erftstadt, Weilerswist, Leichlingen, Burscheid and Odenthal.6) Coverage includes the entire Munich region. In addition to the City of Munich itself, the region surveyed comprises the most important towns and local authorities in the immediate vicinity of the administrative districts of Dachau, Ebersberg, Erding, Freising, Fürstenfeldbruck and Munich as well as Starnberg.