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MARKET REPORT ON THE LETTING OF LOGISTICS PROPERTIES AND INDUSTRIAL SPACES region 2019

Market report on the letting of logistics properties and industrial spaces in the * for 2019 n Take-up down by 15% to 169,600 sqm >> Take-up on the letting of industrial property and logistics facilities in the economic region of Stuttgart* 2019 n Decline to 20% below the five-year average n New buildings remain at a weak level due to a shortage of land n OEMs heralding a turnaround through invest- ment n No market slump expected for the time being despite a faltering industry n Forecast for 2020: Take-up at a similar level to 2019 – increased demand for space in retail and e-commerce/offsetting of weakening demand in the supply industry * The economic region of Stuttgart comprises sub-markets consisting of Stuttgart itself an the following administrative districts: -, , , Böblingen, Göppingen

According to our latest report, we recorded space consumer goods in particular. However, the pros- take-up of 169,600 sqm among all market partic- pect of finding a suitable branch location here Take-up by regions ipants in 2019. This figure was down 15% year- was very low last year, and this is likely to remain on-year (2018: 199,150 sqm) and is 20% below a major challenge in 2020. Market activity in 2019 was chiefly shaped by the the five-year average (212,950 sqm). sub-markets of Ludwigsburg and the Rems-Murr E-commerce is currently achieving up to double- district. As in the previous year, the Ludwigsburg While existing space accounted for 70% of new digit annual growth rates, and bringing about district was the leading region in terms of take-up, lettings, the share of new construction fell slight- lasting change on the markets. It is shaping contributing 37% to the result with 62,300 sqm ly compared with last year (2019: approx. 30%; consumer behaviour and making consumers (2018: 27%; 53,800 sqm). Hot on its heels was 50,300 sqm; 2018: 32%; approx. 63,900 sqm). As even more eager for ever shorter delivery times. the Rems-Murr district (2019: 36%; 61,400 sqm; in previous years, the logistics market in 2019 was These days, although almost everyone does lots 2018: 12%; 23,500 sqm), with the large-scale shaped by excess demand. of shopping online, people don’t want a deliv- leasing by Daimler AG in being a ma- ery centre on their doorstep. That is a paradox. jor factor here. It is noticeable that OEMs are investing heavily in Municipalities also appear to have little interest in their future – something that cannot currently be talks on this type of settlement. This is despite the Way back were the Esslingen district (2019: 14%; said of part of industry and suppliers in particu- fact that hundreds of new jobs would be created 24,500 sqm; 2018: 24%; 47,150 sqm), the Böblin- lar. A wait-and-see attitude still generally prevails in some cases and most of the delivery vehicles gen district (2019: 7%; 11,500 sqm; 2018: 15%; here, and this is having a knock-on effect on sup- are car-like (vans, sometimes even electric vehi- 30,300 sqm) and Stuttgart with 3%, although pliers. So the slump is deepening even though the cles, etc.) rather than large lorries. Now is the time this was due to the fact that occupancy in these order situation generally remains at a high level. to face up to change, as some sectors will under- three districts is practically 100%. The Göppingen Overall, however, we are highly optimistic that go a transformation. district accounted for 3% of take-up. the Stuttgart metropolitan region will remain a key player in as an industrial and logis- >> Take-up on the letting of industrial property and logistics facilities in the economic region of Stuttgart 2019 by region tics location despite a degree of change.

The current hesitancy of the supply sector and mechanical engineering is being offset by strong- er demand from other sectors – primarily retail and e-commerce. Companies in this sector are now even keener to find one or more locations, preferably on the edge of Stuttgart, in order to supply the metropolitan area with fast-moving

MARKET REPORT ON THE LETTING OF LOGISTICS PROPERTIES AND INDUSTRIAL SPACES // Stuttgart region 2019 >> Take-up on the letting of industrial property and logistics facilities in the economic region of Take-up by size Stuttgart 2019 by size

As in the previous year, the over 10,001 sqm size category came first in 2019, contributing around 35% to the result with 60,000 sqm (2018: 36%; 71,700 sqm), mainly on account of the contract concluded by Daimler in Waiblingen. The 1,001-3,000 sqm (32,900 sqm) and 5,001- 10,000 sqm (approx. 32,600 sqm) size categories ≥ 10,001 sqm 5,001 - 10,000 sqm 3,001 - 5,000 sqm 1,001 - 3,000 sqm ≤ 1,000 sqm accounted for around 19% each. There was also little to separate the 3,001-5,000 sqm (around >> Take-up on the letting of industrial property and logistics facilities in the economic region of 13%; 22,700 sqm) and under 1,000 sqm (12.6%; Stuttgart 2019 by sector around 21,400 sqm) size categories.

Take-up by sector

The Stuttgart region is one of Germany’s tradi- tional industrial hot spots and, along with the Rhine- region, for example, it is the most intensively used property location for light in- dustrial space. Logistics service providers have a correspondingly high take-up, accounting for ap- prox. 60% between them in 2019, and taking up 101,800 sqm for their supplies to industry (2018: 73%; approx. 145,400 sqm). Production came >> Prime and average rents of industrial property and logistics facilities in the economic region next with approx. 38% and 64,400 sqm (2018: of Stuttgart 23%; 45,800 sqm). 1.8% (around 3,400 sqm) was categorised as “Other”.

Rental prices 2019

Whereas the prime rent remained unchanged from the previous year at EUR 6.50/sqm in 2019, the average rent (EUR 5.20/sqm) was up by 4% on 2018 (EUR 5.00/sqm). However, according to Realogis’ market assessment, rents would rise fur- ther given the opportunity as a result of increased construction costs and higher land prices. prime rents average rents

Forecast 2020 >> Relevant deals 2019

The Stuttgart region is also equipped for the fu- 1. Daimler AG 3. Daimler AG ture with its diversified, highly efficient economic Rems-Murr, approx. 42,000 sqm Esslingen, approx. 8,300 sqm structure. The weakening of the industrial sector/ supply sector is likely to be offset by the growth 2. Mercedes-AMG GmbH 4. Klema Maschinenhandel in demand from retail and e-commerce. We are Ludwigsburg, approx. 10,200 sqm Ludwigsburg, approx. 7,840 sqm therefore optimistic that the excess demand will continue.

MARKET REPORT ON THE LETTING OF LOGISTICS PROPERTIES AND INDUSTRIAL SPACES // Stuttgart region 2019 Logistic Property Market Stuttgart: Rental Prices 2019 (EUR/sqm)

A61 Bad Mergentheim

NECKAR-ODENWALD-KREIS MAIN-TAUBER-KREIS

A6 Mosbach A81 Speyer RHEIN-NECKAR-KREIS A6 Künzelsau A65 Wörnitz HOHENLOHEKREIS A6 Bad Rappenau Germersheim A6 A6 A7

Bruchsal Crailsheim HEILBRONN Schwäbisch Hall Stutensee Bretten Ludwigsburg A81 SCHWÄBISCH HALL A5 Weißenburg Karlsruhe 4.00 - 6.50 Ø 5.20 Rems-Murr A7 3.50 - 6.00 A8 Mühlacker Bietigheim-Bissingen Backnang Vaihingen Ø 5.00 () Ettlingen an der LUDWIGSBURG A35 REMS-MURR-KREIS A8 Waiblingen Stuttgart A81 Göppingen Gaggenau Schwäbisch 3.50 - 5.50 4.50 - 6.50 Gmünd A5 Stuttgart Ø 5.50Bad Wildbad Ø 4.95 Sindelfi ngen Ostfi ldern Bühl an der Brenz Leinfelden-Echterdingen GÖPPINGEN Geislingen A8 an der Steige Böblingen CALW BÖBLINGEN HEIDENHEIM Messe Nürtingen 4.50 - 6.50 Airport ESSLINGEN A7 Ø 5.45 Nagold AM NECKAR Lonsee A81 Tübingen Metzingen FREUNDENSTADT A8 Langenau Laichingen Offenburg TÜBINGEN A8 REUTLINGEN Dornhan ALB-DONAU-KREIS Esslingen Erbach 4.00 - 6.50 Ø 5.20Pfronstetten A81 A7

Schramberg Oberstadion

Rottweil BIBERACH AN DER RIß

* The economic region of Stuttgart comprises sub-markets consisting of Stuttgart itself and the following administrative districts: Rems-Murr, Ludwigsburg, Esslingen, Böblingen and Göppingen.

MARKET REPORT ON THE LETTING OF LOGISTICS PROPERTIES AND INDUSTRIAL SPACES // Stuttgart region 2019 REALOGIS Immobilien REALOGIS – REALOGIS – Stuttgart GmbH Pioneers in Logistics since 2005 Available to you directly on-site in Stuttgart Kranstraße 8 70499 Stuttgart When Realogis was first established in 2005, we We are your point of contact for the letting of in- phone: +49 (0)711 - 8 38 89 59 - 0 had an ambitious goal: to become the market dustrial and logistics property as well as business fax: +49 (0)711 - 8 38 89 59 - 9 leader for property lettings in the “industrial and parks in the Stuttgart region, and have been the e-mail: [email protected] logistics” segment. The concentration and poo- market leader in this segment since 2006. You’re ling of our know-how into this niche market has looking for a certain type of property? We will www.realogis.de proved successful: in 2015 we again gained define the precise details of your requirements, market leadership in Germany for space take-up enhance your search profile and provide you with in industrial properties, warehouses and logistics exact property matches. Maybe you are looking properties. What’s more, we have also continued for a new tenant for your property. In that case we to expand our share of the European market. will assist you in valuing your property and setting the optimal rental price. We handle the professio- Today, the owner-managed Realogis group, which nal presentation of your property to the public and is headquartered in Munich and also has offices in ensure a prompt letting. Berlin, Dusseldorf, Frankfurt, Hamburg and Stutt- gart, not only offers lettings and consultancy ser- Both tenant and landlord benefit from the many vices but is also a sought-after partner of investors years of specialist market knowledge of our Contact: and institutional investors, to whom we offer our approximately nine-strong consultancy team in Adriano Borgia (Managing director) comprehensive experience and in-depth regional, the region, as well as our market proximity and phone: +49 (0)711 - 8 38 89 59 - 0 national and international market knowledge. valuable contacts. We only employ well educated fax: +49 (0)711 - 8 38 89 59 - 9 and experienced property consultants, and also e-mail: [email protected] Extensive consultancy services in the areas of offer access to an in-house site-department, which logistics and fulfilment round off our range of is specialised in commercial and industry sites. services. With a team of highly motivated and well-trained professionals, we continually strive Please contact us about any decisions relating to to provide long-term support to our customers industrial and logistics property. and enable them to benefit from our position as market leader.

Our services Contact: n Preparation of a detailed and individual requi- n Sound and realistic valuation of your property / Joel Adam (Managing director) rements profile land phone: +49 (0)711 - 8 38 89 59 - 0 fax: +49 (0)711 - 8 38 89 59 - 9 n Targeted offers n Individual marketing concept e-mail: [email protected] n Development of possible alternatives n Advice on optimising property (leasing, purchase) n Strategy consulting to minimise the risk of n Integrated Realogis logistics consultancy to vacancies and defaults define the optimal location and implement internal processes in an existing property n Extensive regional, national and international contact network of potential tenants

Contact: Irina Lysenko (Research Analyst) phone: +49 (0)89 - 51 55 69 - 287 fax: +49 (0)89 - 51 55 69 - 29 email: [email protected] All data in this report come from different sources which we consider reliable but whose validity, exactness and correctness we cannot garantee. Our stetements and forecasts here correspond to our estimations at the time when this report was prepared. This report has been prepared for advertising purposes and does not represent any recommandation or basis for making any decisions about investment or letting property. This market report is the copyright property of REALOGIS. No part of this report may be used in any form or by any means, without the prior permission in writing of REALOGIS. / 16.01.2020

MARKET REPORT ON THE LETTING OF LOGISTICS PROPERTIES AND INDUSTRIAL SPACES // Stuttgart region 2019