REAL ESTATE MARKET REPORT Rhine-Neckar 2020
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REAL ESTATE MARKET REPORT Rhine-Neckar 2020 Office | Retail | Commercial | Investment Focus: Commercial and industrial site potential www.standorte-rhein-neckar.de 1 Dr. Christine Brockmann, Managing Director of Metropol- region Rhein-Neckar GmbH Dear Readers A central location in the heart of Europe and out- standing infrastructure ensure that the Rhine-Neckar Metropolitan Region is well-connected. It is home not only to global players, but also many SMEs and start-ups. Key sectors include biotechnology, IT, che- mistry, automotive, mechanical engineering, and plant construction as well as cultural and creative industries. Citizens and companies alike appreciate its cultural diversity, excellent residential and shopping facilities, and high quality of life. This report on the commer- cial property market provides in-depth analysis of the relevant sub-markets in the region. It offers detailed insights into the office and retail markets as well as Market Segment: Retail investigating existing commercial and industrial areas. 32 Thriving town centres with Purely residential real estate is not included in the a lively retail sector are key for a high quality of life. analysis. The scarcity of available sites and buildings on the German commercial real estate market is encouraging national and international investors to seek suitable locations outside the major cities. The Rhine-Neckar region is an extremely attractive desti- nation for businesses, a fact reflected in its higher rate of real estate transactions. This report presents the region’s investment market in partnership with bulwiengesa. Our focus this year is on the potential of commercial and industrial real estate in the region and Title image the presentation of the results of the “Regional Study The “No.1” office and hotel building was built on of Commercial Sites in Rhine-Neckar 2030”. The study the site of the former main fire station “Mitte” provides companies and investors with valuable infor- in Mannheim’s Glückstein Quarter at a cost of mation for new settlements and expansion. approx. €70 million. In addition to a 15-storey tower, the ensemble incorporates a six-storey base structure. The project was designed by the We wish you a stimulating read! Mannheim architects Schmucker & Partner and fully leased twelve months before completion. The consultancy firm EY will move into an office Dr. ChChristineristine Brockmann with 5,000 m² of gross floor area. The 4-star hotel with 150 rooms has been leased to GS Star for 25 years. Title image:Tobias Schwerdt;/ MRN 2: Wirtschaftsförderung p. MannheimThommy/ Mardo; 3 oben:Tobias p. Schwerdt; / MRN unten: Aurelis Real Estate; rechts: Vollack Gruppe 2 A strong alliance 14 The Rhine-Neckar Metropolitan Region unites 15 urban and rural districts – we present five of them. Market Segment: Office 16 Companies value the Rhine-Neckar region’s central location. Location Rhine-Neckar 4 A strong alliance: The Rhine-Neckar Metropolitan Introducing five urban and rural districts Region – progressive, committed and livable. Speyer 15 Investment Market 10 District of Bad Dürkheim 30 Higher consumer spending and changing preferences Heidelberg 31 Market Segment: Office 16 District of Rhine-Neckar 38 Major users boost office Focus space turnover Worms 39 40 The “Regional Study of Commercial Sites in Rhine- Overview map 25 Glossary 44 Neckar 2030” highlights demand and potential Market Segment: supply. Industrial & Commercial 28 Active management of site demand Market Segment: Retail 32 Sustainable concepts set the market tone Focus 40 In search of commercial and industrial site potential 3 Place for innovation The Rhine-Neckar region – progressive, committed and livable More than 160,000 companies employ a total of 948.000 staffssttaafff andaannd generateggeenenerraatete a grossgrorossss addedaddddeded valuevalaluuee ofo €billionbbiillllioion 89 The Rhine-Neckar Metropolitan Region is both innova- tive and dynamic with an excellent scientific landscape, vibrant cultural life, attractive residential and shopping areas, and stunning natural environment. Its 2.4 million inhabitants are proud of their strong tradition of civic commitment. With a per capita GDP of around €39,000 and a gross value added of €89 billion, the region is one of Ger- many's leading economic centres. As an international hub, its 15 urban and rural districts offer companies fast access to people, markets and knowledge. They are home to listed companies, such as BASF, SAP, Roche, Heidelberger Druckmaschinen and HeidelbergCement with a combined market capitalisation of €231.4 billion. The unemployment rate has been falling for years in the Rhine-Neckar region; it now stands at just 4.3 percent. Innovation Space for Technology The Rhine-Neckar Metropolitan Region is one of the most innovative areas in Europe. It is the northern gateway to the Technology Axis South, which generates 32 percent of total industrial turnover and 43.3 percent of all German patents. In the Rhine-Neckar region itself, more than 2.3 percent of employees work in research and development – considerably more than the national average of 1.2 percent. Two new science data centres in Mannheim and Heidel- berg will soon enable scientists to work more closely with computer centre and library staff in order to improve the usability of research data. The Business and Economic Research Data Center (BERD-BW) in Mannheim will be a centre of expertise for data availability, data exchange and data analysis in the economic sciences. Heidelberg’s “BioDATEN – Bioinformatics DATa Environment” centre focuses on research in the life sciences and will support bioinformatics workflows throughout the entire data Photo: Fulbert Hauck life cycle. 5 30 internationally recognised research institutions Heidelberg’s InnovationLab research centre coordinates the interdisciplinary, state-of- the-art research and development activities of the Forum Organic Electronics cluster. 22universities Regional and local digitisation the further development of future Smart City activities. Artificial intelligence (AI) is a key factor in digitisation. The Mannheim and the District of Rhine-Neckar are also AI4EU project aims to create a new platform for artificial participating in the “Smart Cities” call for tenders issued intelligence that will support potential users of the tech- by the Federal Ministry of the Interior. The goal is to create an open xRoad platform that networks decentral- ised registers, integrates further stakeholders and creates a uniform data standard. Regional planning and develop- The region’s success is based ment also require a solid base of usable data. The newly on three key pillars: innova- conceived spatial observation system “Metropolitan Atlas tion, outstanding workforce Rhine-Neckar” – a free-to-use, web-based application – and excellent infrastructure. allows users to visualise information for more than 200 indicators in the form of diagrams and maps using offi- cial statistics or crowd-based data. The project plans to successively integrate further data sources into the nology, help them to test AI solutions and integrate them Metropolitan Atlas Rhine-Neckar and create a compre- into their processes, products and services. A total of hensive and cooperative data infrastructure. 21 countries are participating in the project, which includes the Walldorf-based company SAP among its Intelligent networks for education partners. A new test environment for 5G applications in In the age of globalisation and digitisation, few things are medical technology at the University Hospital in Mann- more important for a region’s long-term prosperity than heim will offer assistance for SMEs. This is part of the strong education and training. For this reason, the Rhine- project “Transfer Centre 5G for SMEs” which was set Neckar Metropolitan Region is networking its various up by the Fraunhofer Institute's Project Group for Auto- educational stakeholders under the label “EduAction”. mation in Medicine and Biotechnology and funded by This will also create greater transparency with regard the Federal Ministry of Transport and Digital Infrastruc- to the region’s many private education companies. ture. “We create community²” is the motto of the digi- Twenty-two universities and around 30 internationally tisation strategy developed in partnership between the renowned research institutions successfully drive innova- City of Mannheim and its citizens. It is embedded in the tion by transferring research results into economic value- Mannheim 2030 mission statement and aims to promote added processes. In 2019, the University of Heidelberg Photo p.6: InnovationLab GmbH; p.7: Stadtwerke Heidelberg 6 was again awarded the title “University of Excellence”. It is regularly one of the top German universities in inter- national rankings. However, not only scientists, but also Europe will only be able to students praise the region’s education infrastructure. exploit the benefits of AI if For example, the study “Location Retention of Young the technology is easy for Talent and Junior Staff” conducted by the Spiegel Insti- tute Mannheim shows that students at the University all companies to use. of Mannheim are satisfied with their quality of life and education in the city: Mannheim is the preferred place to study for 68 percent of those surveyed. They also rate conversion site Mannheim. The concept is based on the region’s infrastructure, shopping facilities, cultural and cellular energy systems and has been included in the leisure activities