2017

BREMEN PROPERTY MARKET REPORT OFFICES | LOGISTICS | RETAIL HOUSING | INVESTMENT Foreword | 3

This year’s property market report contains numerous records. They all verify Bremen’s currently high and clearly growing appeal as a place for investors and proj- ect developers. Prices are moderate compared to the rest of Germany, with extremely low vacancy rates and highly promising market developments.

Record take-up figures on the office property market create a positive mood, exceeding the magic threshold of 100,000 m² rented commercial space. Office property take-up will also continue to be around 100,000 m² in 2017 as well. The Überseestadt clearly leads the field here with its large, modern new-builds. But this time round there has also been slight growth in the city centre.

Although many new-builds were completed in 2016, they Photo: Björn Behrens are still not sufficient to cover the high demand. This will result in more major construction activity during the next twelve months.

The results for the logistics market once again underline also reflected on the investment market for commercial Bremen’s key position in the national and international property. For the third time in succession, this year too movement of goods. The total property portfolio has transactions have reached the record result of more than increased once more to nearly 2.8 million m². Even 400 million Euro. so, remaining vacant spaces are getting scarce. Their availability will increasingly become a crucial competition All the details about the record achievements and above factor for companies. all about your chances on Bremen’s property market can be found in this brochure. We look forward to meeting you Retail development in Bremen city centre has been and wish you every success in Bremen! consistently positive, with new impetus coming from extending the pedestrian zone in the area of Knochen- hauerstraße. There are already plans for more measures in this respect, with the aim of successfully asserting Bremen’s role as the prime shopping metropolis in the North West. Andreas Heyer As in all other conurbation areas, the price curve here CEO in Bremen is increasing all the time. One reason for the WFB Wirtschaftsförderung Bremen GmbH tense situation is the high pressure to invest, which is (Bremeninvest)

Bremen Überseestadt Contents | 5 Visualisation: Haslob Kruse + Kruse Haslob + Visualisation: Partner Architekten BDA

New-build office and business building BUKH, Bremen Industrial Park WEGGLE waffles, Bremen city centre Hansakontor, Überseestadt

MARKET FOR OFFICE PROPERTY 2017 * TAKE-UP | CONSTRUCTION ACTIVITY | PRICE LEVELS 6 – 11

MARKET FOR LOGISTICS PROPERTY 2017 ** TAKE-UP | COMMERCIAL ESTATES | PRICE LEVELS 12 – 17

BREMEN AS RETAIL LOCATION 2017 * STRUCTURE | LOCATIONS | PRICE LEVELS 18 – 23

HOUSING MARKET 2017 * DEMOGRAPHICS | PRICE LEVELS | FORECASTS 24 – 25

INVESTMENT MARKET REPORT 2017 * TRANSACTIONS | YIELDS | PRICE LEVELS 26 – 27

Alexander von Humboldt I (“Alex”), Schlachte, Bremen city centre Sources: *bulwiengesa AG; ** LSA Logistik Service Agentur GmbH MARKET FOR OFFICE PROPERTY 2017 TAKE-UP CONSTRUCTION ACTIVITY PRICE LEVELS

THE VACANCY RATE OF 3.0 % IS ON THE LOWEST LEVEL FOR MORE THAN 10 YEARS

ADAC, Bremen-Hastedt Market for office property 2017 | 9

TAKE-UP TOPS THE 100,000 m² MARK

Büroimmobilien During the first six months of 2016, the take-up of office spacesBüroimmobilien up to 500 m². Both segments each account for a space in Bremen reached 43,800 m² and 58,000 m² in the shareBüroimmobilien of 31 % in total take-up. On the other hand, office second half of the year. The overall result of 101,800 m² take-up for spaces between 1,000 m² and 5,000 m² is less was thus well above the annual average of 84,000 m² for significant than in previous years. It remains to be seen the period 2011 to 2015. whether this trend will continue. Take-up by owner-occupiers was on the insignificant side Office space lettings in Bremen 2013 to 2017 in m² Office space lettings in Bremen 2013 to 2017 in m² with just 9 % once again in 2016. The greatest take-up here Office space lettings in Bremen 2013 to 2017 in m² refers to 4,200 m² of office space in the Überseestadt. 94,000 2013 94,000 2013 94,000 2013 Good start to 2017 69,100 2014 69,100 Office take-up during the first six months of 2017 amounted 2014 69,100 to 50,700 m², thus continuing on a far higher level than in 2014 83,200 previous years. By comparison, office take-up during the 2015 83,200 2015 83,200 first six months of the years 2014 to 2016 was only between 2015 101,800 38,000 and 44,000 m². The current figures even exceed the 2016 101,800 2016 101,800 mean office take-up of 49,500 m² resulting from the first 2016 six months of the last five years. The largest contributing 99,500 2017* 99,500 factor here is the owner-occupied company headquar- *2017 forecast* 99,500 2017* ters of Kühne & Nagel with 9,500 m². It therefore looks * forecast * forecast possible for the overall annual take-up to reach around 100,000 m² by the end of the year. Lettings in a city comparison 2017 in m² Lettings in a city comparison 2017 in m² Lettings in a city comparison 2017 in m² Spaces of 1,000 m² to 5,000 m² 99,500 BREMEN 99,500 shaped the market in 2016 BREMEN 99,500 BREMEN Development in construction activity 2013 to 2017 in m² 38.3 % of take-up in 2016 consisted of spaces between 92,000 Development in construction activity 2013 to 2017 in m² LEIPZIG* 92,000 1,000 and 5,000 m². This market segment saw greater LEIPZIG* 92,000 Development in construction activity 2013 to 2017 in m² LEIPZIG* 35,926 take-up than in 2015, amounting to approx. 39,000 m². 101,800 2013 35,926 This is the highest value to be registered since 2007. On ESSEN* 101,800 2013 35,926 ESSEN* 101,800 2013 the other hand, there was less demand for larger spaces ESSEN* 55,521 122,600 2014 55,521 exceeding 5,000 m². Only two deals were concluded in this HANOVER* 122,600 2014 55,521 OFFICE PROPERTY TAKE-UP HANOVER* 122,600 2014 segment in 2016 with altogether 12,700 m² (12.5 % of total HANOVER* 65,791 283,000 2015 STUTTGART* 65,791 ONCE AGAIN REACHES AROUND take-up), one more than in 2015. Smaller spaces of up to 283,000 2015 STUTTGART* 65,791 283,000 2015 1,000 m² accounted for nearly half of take-up (49.2 %). The STUT* averageTGART* forecast for the last five years 59,891 segments up to 500 m² (25 %) and from 500 to 1,000 m² * average forecast for the last five years 2016 59,891 * average forecast for the last five years 2016 59,891 100,000 m² (24.2 %) were almost equally weighted. Measured by the 2016 32,850 number of concluded deals, spaces smaller than 500 m² Branch structure of office lettings 2017 in m² 2017* 32,850 Branch structure of office lettings 2017 in m² 2017* 32,850total dominated here again (75 %) as in 2015.This shows just Branch structure of office lettings 2017 in m² 2017** forecast total how significant the small space segment is on Bremen’s 32,843 * forecast OTHER BRANCHES 32,843 * forecastno longer available currently available (vacant) total office market. OTHER BRANCHES 32,843 no longer available currently available (vacant) OTHER BRANCHES 27.363 no longer available currently available (vacant) FORWARDING, PRODUCTION, TRADE First six months 2017 defined by 27.363 FORWARDING, PRODUCTION, TRADE 27.363 small and very large spaces FORWARDING, PRODUCTION, TRADE 10,149 The Kühne & Nagel new-build and another owner-oc- ASSOCIATIONS, CITY, UNIVERSITY 10,149 ASSOCIATIONS, CITY, UNIVERSITY 10,149 cupier project resulted in office take-up of more than ASSOCIATIONS, CITY, UNIVERSITY 12,119 15,000 m² in the segment over 5,000 m² already in the BUSINESS-RELATED SERVICES 12,119 BUSINESS-RELATED SERVICES 12,119 first six months of 2017. Market activity is being defined BUSINESS-RELATED SERVICES The Imaging Source Europe, 8,369 Überseestadt by these two deals, together with the category for small INSURANCE, BANKS, FINANCIAL SERVICES 8,369 INSURANCE, BANKS, FINANCIAL SERVICES 8,369 INSURANCE, BANKS, FINANCIAL SERVICES 8,657 * all details for office space in m² = m² rented commercial space COMMUNICATION AND INFORMATION TECHNOLOGY 8,657 COMMUNICATION AND INFORMATION TECHNOLOGY 8,657 COMMUNICATION AND INFORMATION TECHNOLOGY Market for office property 2017 | 11

refurbishment projects. Presuming that all construction fringes. By contrast, the hitherto comparatively low rents work is completed as planned, Bremen’s office property in the outskirts will see a clear increase. These locations portfolio will amount to around 3.63 million m² by the end benefit from the lack of attractive property in the city of the year. At the same time, projects that are currently centre and its fringes. Here the average rent is forecast to in the planning stage give rise to expect the completion increase to 7.00 Euro/m² with a prime rent of 8.50 Euro/m², rate to increase again in the next few years. corresponding to an increase of 0.30 Euro/m².

Slight decrease in vacancy rate At the city fringes, the level remains at 7.80 Euro/m² on The completion of lots of new office space saw an increase average with a prime rent of 9.50 Euro/m². The average in vacant properties in 2016 to altogether 118,400 m². rent for office space in the city centre will probably in- However, the high take-up ensured that there was only a crease by 0.10 Euro/m² to 8.60 Euro/m². Bremische Volksbank, city centre slight increase in the vacancy rate from 3.2 % in the pre- vious year to 3.3 %. At the same time, the increase con- firmed that (pre-)lettings and owner occupancy resulted Vacancies in Bremen in a national comparison 2017 in m² in vacancies in other places where complete and prompt marketing is not going to be possible. 110,300 Büroimmobilien BREMEN (3.0 %) A decline in vacancies can be expected for 2017. The 149,500 Überseestadt is once again the location with the fewest HANOVER (3.3 %) vacancies in this year. Take-up volume will continue to Visualisation: Justus Grosse Grosse Justus Visualisation: Projektentwicklung ALDIVisualisation: Nord Visualisation: UnternehmensgruppeBAUM decrease them, despite brisk construction activity. The 225,850 Bömers Spitze, Überseestadt ALDI, Technology Park Hotel, housing and office complex of the ESSEN (7.1 %) Office space lettings in Bremen 2013 to 2017 in m² BAUM Group, Überseestadt situation in the city centre which has the highest vacan- cies is rather different. Although recent deals will reduce 235,200 STUTTGART (3.0 %) 94,000 the vacancy rate somewhat, the problem still persists: 2013 Historical building structures mean that many offices are 281,450 Überseestadt with the69,100 highest office take-up Completion figures doubled in 2016 small and no longer in keeping with the times, making LEIPZIG (10.3 %) 2014 In 2016, the Überseestadt accounted for the largest share 52,200 m² of office space were completed in 2016 in new- them unable to compete with the quality of the new-builds of total take-up with 30,000 m² (29.5 %). In the previous builds or conversion projects, with another 7,700 m² being in the Überseestadt. The lack of take-up deals on the city 83,200 Distribution of vacant office space in Bremen's office locations 2015 year, Bremen’s outskirts had still been in this position refurbished. The new-build volume is thus more than fringes means that it has still not been possible to reduce 2017 in m² but now accounted for only 19,500 m² which was nearly double the figure for the previous year. This has been the vacancies here which persist on the level of 19,000 m². 2,000 m² less take-up101,800 than in 2015. This means that the influenced particularly by the completion of the new 2016 4,300 city centre with 20,300 m² also generated more take-up headquarters of Bremer Landesbank in the city centre, Altogether vacant office space in Bremen amounted to ÜBERSEESTADT than the outskirts, together99,500 with the Technology Park and together with the “Eins” by H. Siedentopf GmbH in the 110,300 m² in the first six months of 2017, corresponding 2017* 9,800 the university setting with 20,000 m². The area around Weser Quartier district of the Überseestadt, each with to a vacancy rate of 3.1 %. This could fall to 3.0 % by the TECHNOLOGY PARK / UNIVERSITY * forecast Airport-Stadt/ airport and the city fringes reduced their around 20,000 m². end of the year. 12,800 share of take-up by more than half compared to 2015, AIRPORT-STADT with 4.9 % respectively 6.9 %. Far less new office space is completed in 2017, with Prime rents in the Überseestadt on the increase Lettings in a city comparison 2017 in m² 19,000 around 24,350 m² from new-builds and 8,500 m² from It was above all the attractive new properties, but also CITY FRINGES This development has99,500 continued in the first six months of the lack of suitable premises in Bremen city centre that BREMEN 2017. The Überseestadt with 18,250 m² and the city cen- caused a further increase in rent levels for the Übersee- 23,900 OUTSKIRTS tre with 16,100 m² accounted92,000 for more than three quarters Development in construction activity 2013 to 2017 in m² stadt in 2016 to 12.80 Euro/m², with the highest rent in the LEIPZIG* of total take-up, while up to now the lowest take-up has city centre increasing to 12.70 Euro/m². 40,500 CITY CENTRE been registered in Airport-Stadt and particularly the city 35,926 101,800 2013 ESSEN* fringes. Although the high demand in 2017 will see rents in the 55,521 city also reaching 12.80 Euro/m², it will still be the Über- 122,600 2014 HANOVER* Take-up still driven by forwarding, production and trade seestadt that accounts for Bremen’s prime rents. The wa- Size categories of lettings 2017 in m² The forwarding, production and trade sector had the larg- 65,791 terfront location benefits above all from completion and est share of office283,000 take up in 2016 with 26.6 %, followed 2015 pre-letting of the new-builds. The prime rent will there- STUTTGART* 26,150 by business-related and other services with 19.2 % and fore probably increase to 13.00 Euro/m². Far higher rents UP TO 500 m² * average forecast for the last five years 59,891 10.2 %. In contrast to its leading position in 2014 and 2015, 2016 are already being paid in certain properties. 19,575 the public sector only accounted for 9.7 % of total take-up UP TO 1,000 m² in 2016. The picture is even clearer during the first six 32,850 Slight rental increases in the city centre; Branch structure of office lettings 2017 in m² 2017* 31,975 months of 2017, with forwarding, production, trade and outskirts benefit from high demand UP TO 5,000 m² * forecast total post accounting for 32,843more than one third of total office While rental prices will increase slightly in the city cen- no longer available currently available (vacant) 21,800 OTHER BRANCHES take-up with around 17,900 m². tre during 2017, they will probably stagnate at the city MORE THAN 5,000 m² 27.363 FORWARDING, PRODUCTION, TRADE 10,149 ASSOCIATIONS, CITY, UNIVERSITY 12,119 BUSINESS-RELATED SERVICES 8,369 INSURANCE, BANKS, FINANCIAL SERVICES 8,657 COMMUNICATION AND INFORMATION TECHNOLOGY MARKET FOR LOGISTICS PROPERTY 2017 TAKE-UP COMMERCIAL ESTATES PRICE LEVELS

DISTRIBUTION UNIT PORTFOLIO INCREASES SLIGHTLY TO 2.8 MIO. m²

Dachser Logistics Centre, Bremen GVZ (Cargo Distribution Centre) Market for logistics property 2017 | 15

INTERFACE IN THE INTERNATIONAL FLOW OF GOODS

Bremen is a logistics hotspot at the heart of Europe. The The portfolio that interests investors amounts to more city’s exposed position on the river Weser near to the than 1.7 million m² in Bremen. These properties are at North Sea and its highly efficient infrastructure offer least 8,000 m² in size with a clear interior height of at ideal conditions for logistics-related companies operating least 6.5 metres and were built since 1985. Experts es- on a global scale. The highly efficient container terminals timate that such “investor-relevant” premises account in Bremerhaven generate huge quantities of goods every for 15 % of the total German logistics property portfolio. day, most of which come to Bremen for handling and pro- In Bremen, this share is four times as high at 60 %. Here cessing. And the flow of goods arriving in the ports of again, this underlines the appeal and modernity of the lo- Hamburg and Wilhelmshaven often end up travelling via cation for investors. Bremen to their national and international destinations. Persistently low vacancy rate as basis for investment In Bremen it is above all the people that matter: while The statistics reveal a take-up of 152,800 m² for the pe- plans to attract the logistics sector to other places are riod under review in 2017 (last year: 253,560 m²). New frequently rejected by the local population, there is gen- user contracts were concluded for 18 properties (last erally a very high level of acceptance in Bremen. One year: 20), seven of which (last year: 12) are 10,000 m² and reason for this is way the branch dominates the local more in size. economy. Altogether around 115,000 gainfully employed workers in the Metropolitan Region Bremen/Oldenburg The vacancy rate has seen another sharp drop to 0.71 % are to be found in the logistics companies and their sup- (last year: 1.14 %). Only 20,000 m² can be put to immediate pliers. Manpower quality is becoming an increasingly sig- use for logistics activities (last year: 30,500 m²). In other nificant location factor. words, there is an extreme shortage of available proper- ties for letting. However, the current logistics report only Distribution unit portfolio increases features those vacant properties that are actually on the to about 2.8 million m² market for sale or re-letting. During the period under review 2017, the portfolioLogistikimmobilien of distribution units in Bremen has increased to 2.799 mil- lion m². This refers to 228 premises just in Bremen city. Distribution unit space in a national comparison for 2017 in million m² Distribution of unit space 2017 in m² Here there is a fundamental difference for example to what are known as the “big 5 conurbations”. In contrast 4.40 100,000 to Bremen, they also include property in the surrounding HAMBURG REGION OTHER SITES 0 m²€ VACANCY RATE FALLS TO regions in addition to the city areas. 4.30 157,800 A RECORD LOW OF RUHR CONURBATION ÜBERSEESTADT 0 m²€ Presuming that around 50 % of logistics property in the Metropolitan Region Bremen/Oldenburg is concen- 4.10 179,750 FRANKFURT REGION BREMER KREUZ 0 m²€ 0.71 % trated in Bremen with about 2.8 million m², this reveals the substantial nature of the market compared to logis- 3.30 BERLIN REGION 388,700 tics properties in the Hamburg region for example with HANSALINIE/HEMELINGEN PORT 0 m²€ a portfolio of somewhat more than 4.0 million m². Last 2.79 BREMEN CITY INCL GVZ€ 482,000 year alone, operations began in logistics premises in the INDUSTRIEHAFEN 0 m²€ direct surroundings of Bremen amounting to total space 1.95 MUNICH REGION 1,491,400 of 140,000 m². CARGO DISTRIBUTION CENTER 20.000 m²€

1.50 Rented space vacancies DÜSSELDORF REGION 1.49 BREMEN GVZ ON ITS OWN€ Take-up in Bremen 2016/2017 in m² TST Trans Service Team, Bremen Industrial Park 137,960 TAKEšUP THROUGH NEWšBUILD/REVITALISATION 72,500

115,600 TAKEšUP THROUGH CHANGE IN OCCUPANT 80,300

253,560 TOTAL TAKEšUP 152,800

2016 2017 Market for logistics property 2017 | 17

Marinetech, Bremer Wollkämmerei industrial estate (BWK) Developing the second stage of Hansalinie industrial estate Logistikimmobilien Logistikimmobilien Distribution unit space in a national comparison for 2017 Price level almost unchanged The smoother operations run in the logistics centre,inDistribution the million m² unit space in a nationalProduction comparison logistics for 2017 for the automotive industry: Distribution of unit space 2017 in m² The average rent for logistics property in Bremen has in- more effective the flow of goods, the flow of informationin million m² Hemelingen port, Hansalinie and Bremer Kreuz Distribution of unit space 2017 in m² creased just slightly to 3.24 Euro/m² (last year: 3.21 Euro/ and therefore also the cash flow in the many different Bremen’s Hansalinie4.40 industrial estate is the central com- 100,000 HAMBURG REGION OTHER SITES 0 m²€ m²) and it thus almost stable. Top quality properties cur- sectors of the economy. Here the Cargo Distribution ponent in the ongoing4.40 development of the city as a place 100,000 HAMBURG REGION OTHER SITES 0 m²€ rently reach monthly rents of 4.00 Euro/m² (net rent) and Center in particular is a role model in every possible for the automotive4.30 industry, supplemented by the logis- 157,800 RUHR CONURBATION more. Rents of 2 – 3 Euro/m² and less apply to around way, as verified by the successful performance figures tics properties at 4.30Hemelingen port and at Bremer Kreuz ÜBERSEESTADT 0 m²€ 157,800 RUHR CONURBATION ÜBERSEESTADT 0 m²€ 60 % of the existing properties. currently available for 2017: (motorway intersection).4.10 179,750 → more than 30 % of logistics take-up in Bremen is FRANKFURTgen- REGION Here many logistics4.10 processes are generated by Mercedes BREMER KREUZ 0 m²€ FRANKFURT REGION 179,750 By comparison, rents for logistics property in Hamburg erated in the Cargo Distribution Center. Benz and its Bremen3.30 plant. Numerous companies have BREMER KREUZ 0 m²€ BERLIN REGION 388,700 vary for example between 4.50 and 5.60 Euro/m², while → 53 % of Bremen’s logistics properties can be found in settled in the vicinity3.30 to simplify cooperation and im- HANSALINIE/HEMELINGEN PORT 0 m²€ BERLIN REGION 388,700 prime rents in Munich even reach 9.50 Euro/m² per the Cargo Distribution Center with 1.5 million m². prove logistics processes.2.79 Another important factor for HANSALINIE/HEMELINGEN PORT 0 m²€ month. This is an indication of the increasing shortage → 40 % of the distribution units in the Cargo DistributionBREMEN CITY INCL GVZ€ companies to settle in Hansalinie industrial estate is 482,000 2.79 INDUSTRIEHAFEN 0 m²€ BREMEN CITY INCL GVZ€ 482,000 of space and corresponding growth in land prices in the Center are designed as standard concepts, thus com- the completed six-lane1.95 upgrade of the A1 motorway up INDUSTRIEHAFEN 0 m²€ conurbation areas. plying with the demands made by most project develMUNICH- REGION to Hamburg, which is the central traffic artery in North 1,491,400 1.95 CARGO DISTRIBUTION CENTER 20.000 m²€ opers and investors. MUNICH REGION Germany. 1,491,400 CARGO DISTRIBUTION CENTER 20.000 m²€ 1.50 Rented space vacancies The comparatively low level of rent in Bremen on the DÜSSELDORF REGION 1.50 Rented space vacancies other hand results from the still extremely moderate Visible signs of development work for additional logisticsDÜSSELDORF REGION Outlook for 2018: availability as land costs here: at 45 Euro/m² on average, they are for areas and plots of land verify the planned growth and crucial competitive1.49 factor Take-up in Bremen 2016/2017 in m² BREMEN GVZ ON ITS OWN€ 1.49 example about 50 % less than the corresponding values future prospects for the Cargo Distribution Center.BREMEN Its GVZ ON ITS OWN€ More than one million square metres of new distribution Take-up in Bremen 2016/2017 in m² in Hamburg. reliable traffic infrastructure is turning into a symbio- units have emerged in Bremen in the last ten years. This 137,960 sis for different modes of transport, with the direct link figure illustrates a dynamic development that is right in TAKEšUP THROUGH NEWšBUILD/REVITALISATION 137,960 TAKEšUP THROUGH NEWšBUILD/REVITALISATION Bremen Cargo Distribution Center (GVZ) road to the A281 motorway, the efficient connection to line with market trends. At the same time, work is forg- 72,500 as role model for logistics in Europe Europe’s railway network, direct connection to inland ing ahead with the development of new areas to serve the 72,500 Bremen has five logistics centres (GVZ – Cargo Distribu- navigation and ocean-going shipping routes and easy great demand and to remain competitive. 115,600 tion Center, Hansalinie industrial estate, Bremer Kreuz, access to air traffic. The local logistics companies are TAKEšUP THROUGH CHANGE IN OCCUPANT 115,600 Überseestadt (New Harbour District) and Industriehafen) the main motors driving this positive development. There In the next few years, the Cargo Distribution Center TAKEšUP THROUGH CHANGE IN OCCUPANT 80,300 that act as logistics interfaces in the network of the re- are only very few vacancies. will make the most of its development possibilities. New 80,300 gional centres Muenster/Osnabrück, Hanover and Ham- areas will also be developed in the Hansalinie industrial burg. They thus enable e.g. trading companies to make estate. Furthermore, it can be presumed that property 253,560 TOTAL TAKEšUP 253,560 deliveries not just in Bremen but throughout the whole amounting to more than 500,000 m² could be revitalised TOTAL TAKEšUP 152,800 of the North West, practically from every commercial in an extremely attractive location near to the port. 152,800 estate. Manufacturers can make their products in close 2016 2017 vicinity to their customers. And the ports are also within 2016 2017 easy reach. BREMEN AS RETAIL LOCATION 2017 STRUCTURE LOCATIONS PRICE LEVELS

THE PURCHASING POWER INDEX STAYS ON LAST YEAR’S GOOD LEVEL AT 98.1

Cream Lovers, Bremen City Centre Bremen as retail location 2017 | 21

UPBEAT MOOD AND IMPETUS

The city of Bremen has an impressive catchment area Since mid 2017, WEGGLE has also been offering a new with its population of half a million people, and just as wafer concept in a prime city-centre location. The open- many living in the surrounding areas. The retail demand ing of Markthalle Acht and the Manufactum brot&butter amounts to more than 3.8 billion Euro. The Hanseatic City concept has also put the Domshof increasingly in the of Bremen is also an increasingly popular tourist des- focus of attention. Initial concept plans for an upgrade tination, as verified by the constant growth in overnight are available. In future, the whole area between Wall, stays. The UNESCO world cultural heritage site with the Bischofsnadel and Kirchhof Unser Lieben Frauen shall Town Hall and the Roland statue, accompanied by the benefit from the measures. Town Musicians, brings countless visitors from Germany and abroad to Bremen city centre every year. Surround- Prime locations with strong character ing retailers benefit from the additional demand. Bremen Bremen’s prime city centre area is relatively compact therefore offers really good general conditions as a retail compared to the size of the city in general. But every location, for both retailers and customers alike. street has its own character. Smaller to medium-sized shops can be found on Sögestraße with its historical New impetus at the heart of the city buildings. Since 2017, Mister Spex has an eyewear store Bremen city centre is home to more than 700 retail busi- here, and the textile brand Brax is also on this street. nesses, more than 200 catering establishments and well Premises formerly used by Marc O’Polo at the start of over 50 cultural facilities. They all offer an attractive, Sögestraße have been re-let: a premium-segment textile highly varied shopping and leisure experience to both resi- chain store from Sweden will be using this outstanding dents and visitors. While other cities are still talking about corner location in future. the possibility of public Wi-Fi access or only provide this amenity to a partial extent, in Bremen things have already moved onto the next level. Customers, shoppers and pass- 3 ers-by find themselves in a free Wi-Fi-network on all the 1|2

main shopping streets between the central railway station 5 and the city centre and also in the “Viertel” district. 4 6

New ideas were and are being constantly implemented to 10

continue the city centre’s successful development. For ex- 7 ample, part of Knochenhauerstraße has been turned into 9 RETAIL TURNOVER INCREASES a pedestrian zone for a period of twelve months. Vege- Retail locations in Bremen city centre prime locations tation has also been added to make it more attractive. secondary locations 8 AGAIN SLIGHTLY TO city centre Through to mid 2018, the Citylab project for intermediate use of the city centre offers start-ups and new shop con- Major stores in Bremen city centre cepts an opportunity to put their ideas to the test in the 1|2 Galeria Kaufhof / Saturn 3,811 MIO. € city centre. 3 C&A

4 H&M Retail KPIs for Bremen 2017 5 Anson’s Purchasing power index (retail-relevant) 98.1 6 Zara Turnover ratio 115.8 7 Thalia Centrality rating 118.1 8 Peek & Cloppenburg Retail-relevant purchasing power 3,637.1 (in Mio. Euro) 9 Karstadt

Turnover (in Mio. Euro) 3,810.6 10 Karstadt Sports Manufactum, city centre Bremen as retail location 2017 | 23

Recent years have also seen clear growth in the range of retail tenants. Work should begin in 2018 with demolition catering facilities provided in other city centre locations, and construction of the new building, with completion not just in the traditional places on Pieperstraße and Pa- scheduled for 2019. penstraße. Visitors to Knochenhauerstraße for example will enjoy the burger concept at Biggies B or the newly Bremen’s project developer Kurt Zech also has great opened Anton’s. It remains to be seen whether these de- plans for the city centre. He wants to use parts of the velopments in the sector will be driven by the temporary Karstadt building and neighbouring properties to de- Marthalle Acht, city centre Craft Bier Bar, city centre Mister Spex, city centre pedestrian zone that has been set up here. velop new shopping malls in what is an absolutely prime location. Together with modern retail facilities, the aim The 2017 pedestrian footfall survey for the city centre here is also to create attractive circular paths. The invi- Obernstraße on the other hand is the place to go for the Pedestrian footfall rates (Saturday 10 June 2017) differed greatly from one street to the next. While both tation to tender for the Lloydhof is also nearly finished. big stores. The big names to be found here include textile Thursdays and Sundays brought more people to Obern- Here the plans are for a revitalised business complex stores such as Peek & Cloppenburg and Anson’s or H&M 8,653 straße, in Sögestraße this only applied on Saturdays. Al- with a mixture of retail, catering, apartments and offices. HANSEATENHOF and Zara. Premises formerly used by Bonita were taken together the figures remain on a good level. Bremen city Meanwhile, part of the Haven Höövt shopping centre in over by the CKTs catering concept and reopened in June 23,138Einzelhandelsstandortcentre certainly cannot be said to suffer from lacking Bremen-Vegesack is being demolished and replaced by after extensive conversion work. Compared to its former SÖGESTRASSE Einzelhandelsstandortsales potential because of a lack of pedestrians. Even so, apartments. The arrival of Kaufland has given the district style, the fast food chain now has a much more up-mar- 18,314 it is quite clear that the retail sector is facing increasing centre a new future anchor tenant. ket approach in Bremen and could act as role model for UNTERE SÖGESTRASSE competition from other leisure activities when it comes to other city centres. Obernstraße extends into Hutfilter- 24,525 people’s time and attention. In this respect, a stable pe- straße with similar pedestrian footfall ratings. Following HUTFILTERSTRASSE destrian footfall level in future can already been seen as Development of retail rents in the city centre €/m² successful conclusion of the conversion work, the CCC a very good result. Development of retail rents in the city centre €/m² shoes & bags store will be opening its first premises in 31,559 120.00 OBERNSTRASSE 85.00 Bremen here. Retail not just in the city centre 2012 120.00 9–10 h 12–13 h 15–16 h 18–19hPassantenfrequenzen (Samstag, 21.6. 2015) 2012 85.00 Passantenfrequenzen (Samstag,Needless 21.6. 2015) to say that Bremen also has important retail 125.00 The prime locations also include Lloydpassage, the Kath- 10–11 h 13–14h 16–17 h 19–20 h locations outside the centre on account of its size. Var- 2013 85.00 125.00 12.966 2013 85.00 arinenpassage and the Domshofpassage. The range 11–12 h 14–15 h 17–18 h HANSEATENHOF ious shopping centres12.966 and retail complexes ensure that 125.00 HANSEATENHOF offered by Lloydpassage is defined primarily by the the population in the suburbs and surrounding areas can 2014 85.00 125.00 29.896 2014 85.00 Karstadt and Galeria Kaufhof department stores, with rinenstraße. Le Creuset in Böttcherstraße also deservesSÖGESTRASSE purchase anything 29.896they need. One of the largest and most 130.00 smaller shops in between to add diversity. All three malls a mention in this context. SÖGESTRASSE popular retail locations is e.g. the Waterfront Shopping 2015 85.00 130.00 85.00 are under cover for relaxed shopping despite the North Centre and the Weser21.923 Park. Duckwitz retail centre and 2015 UNTERE SÖGESTRASSE 21.923 130.00 German weather. Increasing significance of the catering sector UNTERE SÖGESTRASSE shopping mall was even awarded the Retail Market Star 2016 85.00 130.00 The same applies in Bremen as in most city centres 2016 following extensive25.975 refurbishment. 2016 85.00 HUTFILTERSTRASSE 130.00 Bremen has a limited number of shop units in prime lo- throughout Germany: the range of catering available 25.975 2017* HUTFILTERSTRASSE 85.00 130.00 2017* 85.00 cations. Vacancies are an exception and usually only plays a crucial role in how long people stay around and As far as the suburbs28.658 are concerned, the popular “Vier- * forecast the result of conversion plans. Bremen’s retail market how pleasant this is for them. The significance of this sec-OBERNSTRASSE tel” on Ostertorsteinweg28.658 deserves a special mention. As * forecast OBERNSTRASSE Prime rent Average rent therefore often appears to be less dynamic, but its sta- tor for Bremen’s appeal is constantly on the increase. In 9–10h 12–13h an attractive15–16h quarter not 18–19hfar from the city centre, it offers Prime rent Average rent 9–10h 12–13h 15–16h 18–19h bility makes it convincing in the long term. In addition to addition to the already mentioned new tenants CKTs and up-market quality and atmosphere19–20h with a mixture of cul- 10–11h 13–14h 16–17h Development of retail rents in the suburbs €/m² brot&butter together with the sophisticated food location 10–11h 13–14h 16–17h 19–20h the new letting deals mentioned above, other recent ex- 11–12h 14–15h ture, retail17–1 8andh catering which is appreciated by retailers Development of retail rents in the suburbs €/m² amples also include Bolia in Ansgaritorstraße, Marc Cain Markthalle Acht, a second dean&david store is also sup- 11–12h 14–15h and customers17–18h alike. About 300 shops invite customers 18.50 and the premium multi-label concept Henne in Katha- plementing the range of catering on offer. to take a stroll, have a look and of course to actually buy 2012 10.00 18.50 2012 10.00 something. The opening of a co-working space also un- 19.00 derlines the appeal of the “Viertel” for creatives, free- 2013 10.00 Pedestrian footfall rates Bremen city centre: Obernstraße Pedestrian footfall rates Bremen city centre: Sögestraße 19.00 lancers and digital nomads. 2013 10.00 19.00 5.000 5.000 2014 10.00 19.00 Look ahead to 2018 2014 10.00 4.000 4.000 Work will continue in the years to come on the active 19.00 2015 10.00 19.00 further development of Bremen’s retail sector. “Jacob- 2015 10.00 3.000 3.000 shof” on Obernstraße will be a completely new building 19.00 2016 10.00 19.00 2.000 2.000 including the development of a whole quarter. The aim is 2016 10.00 to highlight specific qualities in the location while taking 19.00 2017* 10.00 1.000 1.000 due account of the history of the Jacobs original company 19.00 2017* 10.00 building. The architectural competition to design the fa- * forecast 0 0 * forecast cade for the Harms am Wall building has been concluded Prime rent Average rent 10 h 11 h 12 h 13 h 14 h 15 h 16 h 17 h 18 h 19 h 20 h 10 h 11 h 12 h 13 h 14 h 15 h 16 h 17 h 18 h 19 h 20 h for this prominent city-centre location with up-market Prime rent Average rent

Thursday (cloudy/sunny) Saturday (cloudy/sunny) Housing market 2017 | 25

HOUSING MARKET 2017 HOUSING MARKET DEMOGRAPHICS REMAINS TENSE PRICE LEVELS

FORECASTS The excess demand levels on Bremen’s housing market result from net migration and declining household sizes. There are positive developments in Bremen in terms of new construction activity, with a focus on apartment blocks and condominiums.

Together with the popular residential areas of Schwach- hausen, Horn-Lehe or Oberneuland, it is above all the new city residential complexes in Überseestadt and Stadtwerder that are most popular. Major housing projects are putting new life into the market, such as Mühlenvier- tel in Horn-Lehe, where 340 housing units are currently Wohnimmobilien Investmentmarkt under construction. This will soon be joined by the Neue Wohnimmobilien Investmentmarkt Hulsberg-Viertel with 1,000 planned housing units. Provi- Affordable housing on Marcuskaje, Überseestadt sion is also being made for more subsidised housing, with GEWOBA being particularly active here. Development in prime rents (new-build) in Bremen in €/m² Transaction volumes per building type in 2017* in Mio. € Development in prime rents (new-build) in Bremen in €/m² Transaction volumes per building type in 2017* in Mio. € Further increase in purchase prices 12.50 42.7 The high demand from owner-occupiers and capital in- 2012 ( 9.50) 12.50 RETAIL PROPERTIES 42.7 2012 ( 9.50) RETAIL PROPERTIES vestors is still causing shortages on the housing market, 12.50 60.5 with a corresponding constant increase in prices. 2016 saw 2013 ( 9.50) 12.50 OTHER BUILDING TYPES 60.5 2013 ( 9.50) OTHER BUILDING TYPES higher than anticipated increases in the purchase prices for 13.00 145.2 condominiums in new-builds, a trend which continues in 2014 ( 9.70) 13.00 LOGISTICS PROPERTIES 145.2 2014 ( 9.70) LOGISTICS PROPERTIES 2017: at the moment, top prices are being paid in excess of 13.50 179.2 4,650 Euro/m² with an average of more than 3,550 Euro/m². 2015 ( 10.00) 13.50 OFFICES, OFFICE/BUSINESS BUILDINGS 179.2 This corresponds to a further increase of about 5 % in each 2015 ( 10.00) OFFICES, OFFICE/BUSINESS BUILDINGS * forecast case compared to the previous year. 13.80 * forecast 2016 ( 10.70) 13.80 2016 ( 10.70) Transaction volumes per location in 2017* in Mio. € Transaction volumes per location in 2017* in Mio. € Rents continue to increase at a slower pace 14.29 2017* ( 11.17) 14.29 A review of the last five years shows a gradual divergence 2017* ( 11.17) 9.0 * forecast CITY FRINGES 9.0 THE AVERAGE RENT FOR in the development of purchase prices and rents. Al- * forecast CITY FRINGES though rents also increased more than expected in 2016, 50.9 NEW APARTMENTS AMOUNTS TO CITY CENTRE 50.9 this was not as sharp as the increase in purchase prices. Development in top purchase prices (new-build) in Bremen in €/m² CITY CENTRE The trend will also continue in 2017 due to persistently Development in top purchase prices (new-build) in Bremen in €/m² 171.0 OUTSKIRTS 171.0 high investment pressure. Prime rents of 14.29 Euro/m² 3,600 OUTSKIRTS 2012 ( 2,500) 3,600 11.17 € / m² are currently 3.6 % higher than in 2016. The average rent 2012 ( 2,500) 196.7 in a new-build is 11.17 Euro/m², which is 4.4 % more than OFFICE LOCATIONS 196.7 3,900 OFFICE LOCATIONS 2013 ( 2,700) 3,900 last year. Compared to the rental level for 2013, new- * forecast 2013 ( 2,700) * forecast build rents have thus increased by 14.3 % for prime rents 4,000 and by 17.5 % on average. During the same period, pur- 2014 ( 2,900) 4,000 National comparison of net initial yields for office properties 2014 ( 2,900) inNational 2017* ascomparison a % of net initial yields for office properties chase prices increased by 20 % for top prices and 32 % on 4,200 in 2017* as a % average. 2015 ( 3,100) 4,200 2015 ( 3,100) 5.2 BREMEN 5.2 4,450 BREMEN In 2017, multiplier factors of 21.6 for top rates and 15.85 2016 ( 3,400) 4,450 2016 ( 3,400) 4.9 on average will be reached for new-build multi-family ESSEN 4.9 4,667 ESSEN dwellings, causing further price increases and serving to 2017* ( 3,558) 4,667 2017* ( 3,558) 4.8 Mühlenviertel, Horn-Lehe underline the situation on the transaction market. * forecast LEIPZIG 4.8 * forecast LEIPZIG 4.5 HANOVER 4.5 HANOVER 3.7 STUTTGART 3.7 STUTTGART * forecast * forecast Investment market report 2017 | 27

INVESTMENT MARKET TRANSACTIONS CONTINUE REPORT 2017 ON RECORD LEVEL TRANSACTIONS

YIELDS Last year’s result exceeded Measured by the totals achieved in the previous year, PRICE LEVELS the 2016 transaction market for commercial property in Bremen saw a reserved start. But it was the calm before the storm. The second six months of the year

alone generated an investment volume of 315 mil- Christian Ring / Wohnimmobilien lion Euro, sufficing for annual investment of more than Investmentmarkt 400 million Euro for the second time in succession. The

total of 433 million Euro even surpassed the previous Photo: WFB year’s results. Airport-Stadt

Development in prime rents (new-build) in Bremen in €/m² Transaction volumes per building type in 2017* in Mio. € Less impact from major transactions In 2015, the Waterfront12.50 Shopping Centre generated 42.7 2012 ( 9.50) around half of all investments. By contrast, in 2016 only RETAIL PROPERTIES 13 % of transactions12.50 exceeded a volume of more than 50 60.5 2013 ( 9.50) million Euro. The share of retail properties in total invest- OTHER BUILDING TYPES ment was far less13.00 with only just about 15 %. 145.2 2014 ( 9.70) LOGISTICS PROPERTIES There was far greater13.50 activity in transactions with of- 179.2 2015 ( 10.00) fice property than in 2015. Here the share increased to OFFICES, OFFICE/BUSINESS BUILDINGS 42 % with a total of 182.5 million Euro, thus making the 13.80 * forecast 2016 ( 10.70) greatest contribution to the annual results. This was due among others to two major transactions in the fourth Transaction volumes per location in 2017* in Mio. € quarter: the sale14.29 of part of the Europa-Center office com- 2017* ( 11.17) plex in Airport-Stadt and Speicher 1 in the Überseestadt. 9.0 * forecast CITY FRINGES

The great interest in logistics and production property 50.9 CITY CENTRE Development in top purchase prices (new-build)persisted inunbroken Bremen in in € /2016.m² More than 100 million Euro were once more invested in this asset class. “Other” com- 171.0 OUTSKIRTS mercial property3,600 also saw signs of increasing popularity. 2012 ( 2,500) THE NET INITIAL YIELD OF Around 75 million Euro were invested in objects such as 196.7 hotels or operator-run3,900 properties. This asset class poses OFFICE LOCATIONS 2013 ( 2,700) a welcome alternative in view of the high investment * forecast pressure and trend4,000 among developers to keep new build- 5.2 % 2014 ( 2,900) National comparison of net initial yields for office properties ings in their own portfolio for the time being. in 2017* as a % FOR CENTRAL OFFICE 4,200 BUILDINGS SHOWS BREMEN’S 2015 ( 3,100) High transaction results for first six months in 2017 5.2 Investments of more than 250 million Euro were regis- BREMEN APPEAL AS SOMEWHERE 4,450 2016 ( 3,400) tered on Bremen property market for the first six months 4.9 TO INVEST of 2017 alone. This4,667 is more than double the result for the ESSEN 2017* ( 3,558) same period of 2016. Here Bremen is benefiting from re- 4.8 * forecast cord investments in German portfolios of logistics prop- LEIPZIG erties. Similarly high investments in objects of this asset 4.5 class are not expected for the second half of the year. HANOVER Even so, it would appear possible that the transaction re- 3.7 sults for 2017 will exceed 400 million Euro for the third STUTTGART Hafenkante, Überseestadt time in succession. * forecast 2017 7 visuelle Kommunikation, Bremen · Photos: Jonas Ginter · Text: Guido Strotkötter 2017 · Design: Büro

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WFB Wirtschaftsförderung Bremen GmbH (Bremeninvest) Kontorhaus am Markt Langenstraße 2 – 4 (Entrance Stintbrücke 1) 28195 Bremen Phone: + 49 (0) 421 96 00 - 10 Fax: + 49 (0) 421 96 00 - 810 www.wfb-bremen.de