Facts and Figures

Office market am Main Q1 2019 “The best way of obtaining information is to provide some in the first place .“ Quote from Niccoló Machiavelli

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Dr. Konrad Kanzler Head of Research +49 (0) 69 - 970 505-614 [email protected]

Christian Dörner Head of Office & Retail Letting +49 (0) 69 - 970 505-121 [email protected]

Martin Angersbach Director Business Development Office +49 (0) 69 - 970 505-122 [email protected]

Lenny Lemler Director Investment +49 (0) 69 - 970 505-174 [email protected] Market Environment

Population development Frankfurt a. M.

Inhabitants December 2018: 747,848 760,000 The population of the Frankfurt am Main

740,000 banking metropolis continued to rise in 720,000 2018. As of 31 December 2018, the 700,000 city’s population stood at 747,848, rep- 680,000 resenting a year-on-year increase of 660,000

640,000 0.9 %. By mid-February 2019, the num-

620,000 ber of inhabitants had already exceeded

600,000 2011 2012 2013 2014 2015 2016 2017 2018 M. a. Frankfurt of City Source: the 750,000 mark. This positive popula- tion trend is also expected to be sus- tained over the next few years. Purchasing power per capita Germany and Frankfurt a. M. Corresponding to this strong demo- Purchasing power per capita Germany Purchasing power per capita Frankfurt a. M. graphic development, the economy has 30,000 Purchasing power per capita 2019: Germany € 23,779 / Frankfurt € 27,088 also continued to prosper. The average 25,000 rate of unemployment for 2018 20,000 amounted to 5.4 %, which is 0.5 %-

15,000 points below the year ago level. In March

ting GmbH ting 2019, unemployment in Frankfurt am 10,000 e Main stood at just 5.1 %, thus falling a 5,000

: GfK GeoMark GfK : further 0.6 %-points over the last 12 0 2012 2013 2014 2015 2016 2017 2018 2019 Source months. The number of employees sub- ject to social insurance contributions also increased significantly by 3.4 % to Unemployment / employees subject to social insur. contribution 584,220 (June 2018). Frankfurt therefore Employees Frankfurt a. M. thereof tertiary sector recorded much stronger employment Unemployment rate Germany Unemployment rate Frankfurt a. M. 700,000 8.0 growth rates than (2.4 %) and

600,000 7.5 Germany (2.2 %) as a whole. The notice- 7.0 500,000 able increase in per capita purchasing 6.5 Employment Agency Employment 400,000 , power in Frankfurt by 3.3 % year-on- 6.0 300,000 year to €27,088 can also be seen in this 5.5 200,000 context. 5.0

100,000 4.5 State Statistical Office Hesse Office Statistical State : Office-based industry sectors also pro- 0 4.0 2012 2013 2014 2015 2016 2017 2018 Mar-19 Source vided positive feedback as part of the business survey carried out by the Frankfurt Chamber of Industry and Com- Consumer price index Germany and Hesse merce at the beginning of 2019. Alt-

CPI Germany (base year: 2015) CPI Hesse (base year: 2015) hough the business climate index for the 115 finance, credit and insurance sector fell CPI February 2019: Germany 103.8 / Hesse 103.0 110 from 139 to 131, it still remained at a

105 high level. For business service provid- ers, the index actually increased by a 100 point to 130. 95

90 Federal Statistical Office Statistical Federal :

85 2012 2013 2014 2015 2016 2017 2018 Feb-19 Source Market Data

Take -up, vacancy, prime rent, average rent, prolongation

Vacancy (in thousand) Take-up (in thousand) Prolongation after market screening (in thousand) Average take-up 10 years (in thousand) Prime rent (in €/sqm) Average rent (in €/sqm) 2,500 45.00 42.00 40.00 40.30 43.20 43.20 39.00 39.00 39.20 39.00 38.00 38.00 40.00 36.50 36.00 2,000 35.00

30.00 s qm 1,960 1,500 s qm 1,790

s qm 1,760 25.00

s qm 1,680 21.70 21.70 21.00 20.70 s qm 1,590 20.30 20.50 20.50 20.50 20.50 20.00 19.50 19.30 s qm 1,520 19.00 sqm 20.00 1,000 1,340 s qm 1,316 s qm 1,251 s qm 1,246 15.00 s qm 979 10.00 500 s qm 743 s qm 742

s qm 210 5.00 s qm 74 s qm 97 s qm 50 s qm 46 s qm 44 s qm 89 s qm 541 s qm 712 s qm 547 s qm 510 s qm 350 s qm 472 s qm 427 s qm 515 s qm 452 s qm 369 s qm 394 s qm 622 0 0.00 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Q1 2019 : : NAI apollo Source

The Frankfurt market for office space including Eschborn and Offenbach-Kaiserlei got off to a subdued start in 2019. Office space take-up by tenants and owner-occupiers amounted to about 89,100 sqm in the first three months of 2019. This figure is not only well below the previous year’s volume of 136,800 sqm but is also far short of the five-year average (112,200 sqm). In line with this development, the number of contract signings also fell from 178 to 142. The Frankfurt office market appears to be taking longer to get up to speed this year. However some large contract signings are expected over the course of the year. The somewhat moderate performance in the first quarter should then turn out to be the exception. As take-up of new spaces has fallen, renewals of existing contracts following unsuccessful searches for new premises have taken on increased significance. Indeed, if these searches had been successful they would have added around 44,000 sqm to the take-up figure. The corresponding amount from the previous year was only 4,000 sqm. The bulk of market activity in the first quarter took place in the sub-1,000 sqm segment. This size category generated take-up of 44,200 sqm, accounting for a market share of 49.6 %. At the same time, all size catego- ries experienced significant losses in take-up compared to the first quarter of 2018, ranging from 9.8 % in the “<1,000 sqm” category to 63.9 % in the “5,001 – 10,000 sqm” category. Take-up according to location Q1 2019

Total: 89,100 sqm 25,000 19,100 sqm 20,700 sqm 36 Deals 20 Deals 20,000

12,500 sqm 15,000 17 Deals 11,600 sqm10,600 sqm 20 Deals 20 Deals 10,000 4,700 sqm 5 Deals 2,500 sqm 2,400 sqm 5,000 9 Deals 900 sqm 1,900 sqm 1,700 sqm 4 Deals 400 sqm 100 sqm 0 sqm 4 Deals 1 Deal 2 Deals 3 Deals 1 Deal 0 Deals

0 : NAI apollo Bankenlage Stadtmitte Westend Messe City West Westhafen Nordend Bockenheim Eschborn Mertonviertel OF-Kaiserlei other locations

Lyoner Quartier Source Market Data

Take-up according to unit size Q1 2019 The biggest contract signings include Total 89,100 sqm the letting of 10,700 sqm by Gesell- 50,000 44,200 sqm 45,000 126 Deals schaft für Internationale Zusam- 40,000 menarbeit (GIZ) at 30-34, Ludwig-Er- 35,000 hard-Straße in Eschborn, about 5,300 30,000 25,000 sqm by KPMG in the “Squaire” building 16,700 sqm 20,000 10 Deals 12,300 sqm at the airport and almost 3,500 sqm by 15,000 10,700 sqm 4 Deals 5,300 sqm 1 Deal 10,000 DXC Technology Deutschland at 3-5, 1 Deal 5,000 : : NAI apollo Alfred-Herrhausen-Allee, also in Esch- 0 < 1,000 sqm 1,000 - 2,500 sqm 2,501 - 5,000 sqm 5,001 - 10,000 sqm > 10,000 sqm Source born. The analysis of demand by the different Take-up according to rents Q1 2019 industry sectors reveals a familiar pic- ture, with “banks, financial service pro- Total: 89,100 sqm* 25,000 viders and insurances” accounting for 18,700 sqm 19,800 sqm the biggest share of 20.7 % in the 20 Deals 20,000 48 Deals 13,700 sqm 14,900 sqm Frankfurt banking metropolis. “Consult- 12 Deals 26 Deals 15,000 ing, marketing and research” were sec- 10,900 sqm 11,100 sqm 20 Deals 16 Deals ond with 18.2 %, followed by “commu- 10,000 nication and IT” with 12.9 % and “public

5,000 institutions” with 12.5 %. Take-up was : : NAI apollo 0 much lower in virtually all user groups.

< 10 € 10 < 15 € 15 < 20 € 20 < 25 € 25 < 30 € ≥ 30 € Source *lettings only, no owner occupiers Only “public institutions” recorded an in- crease of 78.4 % compared to last year Take-up according to space quality Q1 2019 because of the GIZ contract. Owing to some large deals in Eschborn, 13.1 % the main office centres registered brisk

Total 89,100 sqm demand and accounted for a 25.5 %

superior 15.3 % market share. However, the CBD con-

average tinued to dominate the market with

ordinary 45,800 sqm or a 51.4 % share. The

71.6 % standout sub-markets were Eschborn

: : NAI apollo with 19,100 sqm, the banking district

Source with 12,500 sqm, the city centre with 11,600 sqm and Westend with 10,600 sqm. Take-up according to industry Q1 2019 Due to the moderate level of take-up ac- tivity and the absence of any noteworthy Banking, Financial Services & 20.7 % high-priced rentals in the first quarter of Insurances 27.1 %

Consulting, Marketing & Research 2019, the prime rent is stable for now at €43.20/sqm. This corresponds to a Communication & IT year-on-year increase of 6.7 %. Over Public Institutions 18.2 % the course of the year, the figure is ex- 8.6 %

Health Care pected to rise to €44.00/sqm. The aver- : : NAI apollo age rent was also unchanged at 12.5 % Others 12.9 % Source €21.70/sqm on a quarterly basis. Over the past 12 months, it increased by 1.9 %. Office L ocations Frankfurt a.M. Q1 2019 We have divided the office market Frankfurt i nto the most important main locations and have colored them separately. In addition, every location is divided into the particular borough and identified with the correspond- ing apellation of site.

Main Location Vacancy*

F-CBD 250,100 sqm F-WEST 47,300 sqm F-SOUTH 69,400 sqm F-NORTH 30,800 sqm F-EAST 62,600 sqm OFFICE CENTRES 282,100 sqm

Total 742,000 sqm

data as of 31.03.2019 * inclusive subletting spaces edition: January 2008 / © Stadtvermessungsamt Frankfurt a. M., 2008

Frankfurt am Main Airport

Office stock 382,700 sqm

Take up 7.800 sqm

Average rent €20.50/sqm

Prime rent €29.00/sqm rce: NAI apollo

Sou Office Locations

Submarkets Office Stock (sqm) Vacancy (sqm) in % Ø-Rent (€) Prime Rent (€) Rentable Objects 1. Höchst 189,000 2,300 1.2 8.50 16.00 2 2. Eschborn-West 168,100 17,100 10.2 10.00 13.50 6 3. Eschborn-Süd 397,000 78,300 19.7 12.50 16.50 20 4. Eschborn-Ost 123,900 10,200 8.2 11.80 15.00 4 5. 87,300 20,500 23.5 11.00 12.50 2 6. Nied 700 0 0.0 8.90 11.00 0 7. Rödelheim 110,300 10,500 9.5 10.00 13.00 8 8. Griesheim 16,800 0 0.0 6.00 8.50 0 9. City West 517,100 43,700 8.5 15.50 21.00 7 10. Gallus 580,300 13,700 2.4 11.00 15.00 13 11. Niederrad Lyoner Quartier 594,000 69,900 11.8 13.00 16.50 16 12. Niederrad (Stadt) 12,500 1,000 8.0 10.00 13.00 3 13. 138,300 400 0.3 11.50 13.00 1 14. Westhafen 88,100 12,800 14.5 22.00 28.00 5 15. Bahnhofsviertel 394,100 23,300 5.9 19.00 24.50 23 16. Messe/Europaviertel 313,400 27,200 8.7 24.50 38.00 4 17. Bockenheim 311,200 4,500 1.4 14.00 17.50 8 18. Westend 663,300 56,100 8.5 24.00 38.00 58 19. Bankenlage 1,103,600 23,500 2.1 32.00 43.20 19 20. Stadtmitte 581,100 53,600 9.2 24.00 39.00 59 21. Nordend 126,700 5,300 4.2 17.50 22.00 13 22. City Ostend 226,300 31,000 13.7 14.50 17.00 6 23. Sachsenhausen 441,600 34,800 7.9 14.00 23.00 28 24. 4,500 600 13.3 11.50 15.00 2 25. OF-Kaiserlei 222,100 14,900 6.7 11.00 13.50 5 26. Ostend-Ost 377,400 22,200 5.9 15.50 18.00 19 27. Bornheim 36,900 0 0.0 9.00 13.50 0 28. / 226,400 6,500 2.9 8.00 11.00 5 29. Bergen-Enkheim 50,600 2,500 4.9 7.50 11.00 3 30. Seckbach 15,100 0 0.0 7.00 9.00 0 31. 13,900 400 2.9 12.00 15.50 2 32. 33,400 200 0.6 11.00 16.50 1 33. Nieder-Eschbach 138,000 18,700 13.6 8.00 10.00 12 34. Mertonviertel 284,500 91,600 32.2 13.00 14.50 7 35. 10,900 0 0.0 10.00 12.00 0 36. /Hausen 108,000 7,500 6.9 11.50 13.50 9

Total apollo NAI Source: 11,343,000 742,000 6.5 21.70 43.20 385 (inclusive other locations) Market Data

Geographical localisation of large-scale lettings Q1 2019 accor. to size categories (> 1,000 sqm)

Lettings according to size > 1,000 sqm - ≤ 2,500 sqm > 2,500 sqm - ≤ 5,000 sqm > 5,000 sqm - ≤ 10,000 sqm >10,000 sqm

Geographical localisation of office spaces completions 2019 accor. to size categories (> 1,000 sqm)

Office space completion according to size > 1,000 sqm - ≤ 5,000 sqm > 5,000 sqm - ≤ 10,000 sqm > 10,000 sqm - ≤ 20,000 sqm > 20,000 sqm Market Data

Vacancy according to vacancy size Q1 2019 Although the Frankfurt office market has Total: 742,000 sqm (385 sub-properties), occupied within three months a well-filled pipeline for 2019 with Vacancy Take-up Q1 2019 300,000 170,200 sqm of planned office space,

250,000 not a single property was completed in 217,200 sqm 10 (sub-)properties 200,000 the first three months of the year. Space 160,500 sqm 145,400 sqm 133,500 sqm 46 (sub-)properties 22 (sub-)properties removals amounted to only around 150,000 85,700 sqm 78 (sub-)properties 229 (sub-)properties 3,000 sqm. As a result, office stock was 100,000 broadly unchanged at 11.34 million sqm 50,000 NAI NAI apollo

by the end of the first quarter. Based on 44,200 sqm 16,700 sqm 12,300 sqm 5,300 sqm 10,700 sqm 0 Source: latest available information, completions < 1,000 sqm 1,000 - 2,500 sqm 2,501 - 5,000 sqm 5,001 - 10,000 sqm > 10,000 sqm over the next two years are expected to reach around 462,600 sqm. The pre-let- Vacancy according to asking rent Q1 2019 tings quota already stands at 60 %. Of Total: 742,000 sqm (385 sub-properties), occupied within three months* Vacancy Take-up Q1 2019 the completions expected in 2019, only 450,000 367,400 sqm 39,700 sqm or 23.3% of the new space 400,000 141 (sub-)properties 350,000 is still available. 300,000 Market-active vacancies on the Frank- 250,000 200,000 furt market for office space, that is office 129,300 sqm 150,000 79,400 sqm 95 (sub-)properties 94,800 sqm space which can be occupied within 45 (sub-)properties 50 (sub-)properties 36,000 sqm 35,600 sqm

100,000 28 (sub-)properties 26 (sub-)properties 50,000 three months of the lease signing, 13,700 sqm 19,800 sqm 14,900 sqm 10,900 sqm 11,100 sqm 18,700 sqm NAI NAI apollo 0 amounted to only 742,000 sqm as of 31 < €10 €10 < 15 €15 < 20 €20 < 25 €25 < 30 ≥ €30 *average asking rent of all spaces per property Source: March 2019. Over the past 12 months, vacancies have therefore fallen by Vacancy according to quality of space Q1 2019 174,000 sqm. The vacancy rate stood at 6.5 % at the end of Q1 2019 and was 1.5 %-points below the previous year’s 21.0 % Total: 742,000 sqm (385 sub- level. properties), occupied within three months It is estimated that the Frankfurt office superior 40.0 % market will noticeably pick up speed in average the further course of the year and, in all ordinary likelihood, will again register above-aver-

age office space take-up for the year as 39.0 % : : NAI apollo a whole. As a result, it is again reasona-

Source ble to expect that the available space will diminish further and rents will rise. Completions Outlook next 12 months

Completions thereof rentable (before completion) Office Stock 350,000

300,000 Vacancy 250,000

200,000 s qm 300,500

s qm 292,400 Take-up 150,000 s qm 146,600

100,000

s qm 49,900

s qm 39,700 Prime rent s qm 170,200 s qm 35,500 50,000 s qm 32,600 s qm 8,300 s qm 5,000 : : NAI apollo s qm 77,600 s qm 76,400 0 s qm 110,500 s qm 126,200 2014 2015 2016 2017 2018 2019 2020 Source Average rent Surroundings

Market Data Surroundings of Frankfurt Average and Prime Rents

sqm €/

0 2 12. Hanau Hanau

/

0 4 7.

sqm €/

0 0 . 10 Maintal Maintal

/ 0 3 . 6

sqm sqm €/ €/

0 0 8 6 14. 10.

/ / Offenbach Offenbach Dietzenbach Dietzenbach 0 0 4 3

. 9. 6 sqm €/

00 . 3 1

/ Bad Vilbel Vilbel Bad 0 5 .

9 sqm

€/

0 4 sqm Isenburg Isenburg €/

-

13.

0 / 0

. 0 Neu sqm 3 12

€/ Dreieich Dreieich 9. /

sqm

0 €/ 9

00 .

. 0 1 7 2

1 .

/ 2 sqm

1 Langen Langen 0

Friedrichsdorf €/ / 0 . 0 0 8 0 8 . . 6 7 1

/

0 Bad Homburg 9 . 9

sqm €/

0 8 . 9

/ Steinbach Steinbach 0

5 sqm

. 6 €/

sqm 0 sqm 2 €/

.

€/

3 0 Walldorf Walldorf - 1 0

.

00 sqm sqm / . 9 11 €/ 0 €/ Schwalbach Schwalbach

2 6 /

Airport

0 . 0 / 0 0 3

0 . . 0 1 8 3 . 5 sqm Mörfelden .

1 13 7

sqm / / Oberursel €/

20

Kelsterbach Kelsterbach €/ 0 0 0

3 4 3 0 . sqm . 9 8. 9 . €/

13 4

0 1 / Sulzbach Sulzbach

4 / . 0 Kronberg Kronberg 9 6 0

. / 5

8 .

Liederbach 00 10

7. sqm €/

sqm 0

€/ 5

. 0 2 13

sqm / Kriftel Kriftel Bad Soden 10. 0 €/

/ 6 0 0 9. 3 . 0 7. 13

/

Hattersheim Hattersheim

10.00 sqm sqm

€/ €/

0 0 3 3 . 12 13.

Hofheim Kelkheim Kelkheim / / 0 0 5 0 . . 8 7

Source: NAI apollo Map Basis: RegioGraph GfK GeoMarketing GmbH On the basis of 5,510 offers (02/2018 - 01/2019) empirica-systeme Marktdatenbank Top 5 – Key Facts

Cities

Office space, vacancy, prime rent, average rent Q1 2019

Office Space (in m. sqm) Take-Up (sqm) Vacancy (in %) Prime rent (€/sqm) Average rent (€/sqm) Berlin 18.65 231,000 1.5 35.50 22.70 Dusseldorf 7.51 90,000 7.1 27.50 16.10 Frankfurt a. M. 11.34 89,000 6.5 43.20 21.70 Hamburg 13.76 132,000 3.4 28.00 16.60

Munich 20.30 196,000 2.0 38.00 19.00 apollo NAI Source:

Prime yields Q1 2019

Prime office yields Prime retail yields Prime logistics yields Berlin 2.80 % 2.80 % 4.00 % Dusseldorf 3.15 % 3.10 % 4.10 % Frankfurt a. M. 3.00 % 3.00 % 4.00 % Hamburg 3.00 % 3.00 % 4.00 % Munich 2.80 % 2.80 % 3.95 %

Total Ø = 2.95 % Ø = 2.95 % Ø = 4.00 % apollo NAI Source:

Frankfurt a. M.

Top take-up Q1 2019

Property + Location Tenant / Owner Occupier Leased area in sqm Bürocenter Eschborn I, Ludwig-Erh.-Str. 30-34 / E.-West Gesellschaft f. Intern. Zusammenarbeit (GIZ) 10,700 The Squaire, Hugo-Eckener-Ring 1 / KPMG 5,300 Alfred-Herrhausen-Allee 3-5 / Eschborn-Süd DXC Technology Deutschland 3,500 Skyper, Taunusanlage 1 / Bankenlage Deutsche Bundesbank 3,300

Kastor, Platz der Einheit 1 / Messe / Europaviertel Solacitve AG 2,900 apollo NAI Source:

Top investments Q1 2019

Property + Location Purchaser Purchase Price in €* Accent Office Center (AOC), Hanauer Landstraße 291-293Finch Properties / Tristan Capital Partners approx. 81,000,000 Main Office, Kaiserleistraße 10-16 PGIM Real Estate approx. 80,000,000 Lyoner Stern, Hahnstraße 68-70 Investcorp approx. 70,000,000 Sigma, Lyoner Straße 20 Intown approx. 36,000,000 *partly estimated M²O, Kaiserleistraße 8, 8A Conren Land approx. 31,000,000 Source: NAI apollo; ONE PARTNER. ALL SERVICES. ALL ASSET CLASSES.

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