M A R K E T B E AT BERLIN Office Q1 2020

OVERVIEW YoY 3-Mo. Chg Forecast With 3.67 million inhabitants and 1.56 million employees contributing to social insurance, Berlin is Germany’s capital and its largest city. At €74,200, the GDP per employed person is still 2% below the national average and well below the figures for the other major 1.6% German cities. For historical reasons, Berlin is in the process of catching up economically. Both the GDP and the number of Vacancy Rate employees have been growing at an above-average rate for many years. The sharp rise in the number of employees (+3.1% in 2019 and +38.5% over ten years) is colliding with very tight availability of office space. 130K Take-Up in sqm SUPPLY AND DEMAND At 129,700 sqm, take-up in the first quarter was 37% lower than an average first quarter of the previous five years. Although first quarters in Berlin have the lowest take-up on average, this one was especially weak, as it was the weakest since Q1 2013. This was €40.00 caused by the lack of space in existing stock, the now very high rent levels, the slowdown of the economy since the second half of Prime Rent /sqm/month 2019 and the fact that many large space requirements have already been met in recent years. The twelve-month rolling take-up is falling sharply, although it is still very high at 947,600 sqm, because of the record third quarter of 2019. Take-up in the next quarter is (Overall, Office) likely to be even lower due to the impact of the Covid-19 pandemic and the measures taken against it.

At 1.6%, Berlin has the lowest vacancy rate of the major German office markets. It has remained unchanged for three quarters. ECONOMIC INDICATORS Available space is especially scarce in the centre. Only 26% of the vacancy is located in the central office locations (78,500 sqm). Q1 2020 Those seeking spaces of more than 4,000 sqm are currently forced to turn to non-central locations or development projects.

YoY 3-Mo. Chg Forecast A total of 91,000 sqm of office space was completed in the first quarter of 2020 in new buildings and core refurbishment developments. This is 84% more than the average of the last five years. Construction delays were again conspicuous however. The - 1.5% estimated total completions for 2020 has had to be revised down from 634,200 sqm to 535,400 sqm. The pre-letting rate for 2020 YoY Change in GDP stands at 80%, which means that additional supply of space available at short notice in development projects will be very limited. Germany 5.1% PRICING German Compared with the previous quarter, the prime rent increased by 2.6% to €40.00/sqm/month, while the weighted average rent rose Unemployment Rate by only 1.1% to €26.70/sqm/month. On a y-o-y basis, the prime rent rose by 14.3% and the average rent by 19.7%, with the rate of increase slowing recently. In no other German city do companies pay as much rent on average for new office leases as in Berlin. 7.9% TAKE-UP VACANCY RATE , PRIME RENT AND AVERAGE RENT Berlin Unemployment Rate 500 1.250 7% 50 40,00 6% 400 1.000 40 Sources: Oxford Economics, Federal Employment Agency 5% 26,70 300 750 4% 30

200 500 3% 20

in 1 000 in 1 000 sqm in 1 000 in 1 000 sqm 2% €/sqm/month 100 250 10 1% 0 0% 0 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020

Quarter [LHS] 12-Month-Rolling [RHS] Vacancy Rate Prime Rent Average Rent M A R K E T B E AT BERLIN Office Q1 2020

MARKET STATISTICS

TAKE-UP YTD STOCK VACANCY COMPLETIONS YTD UNDER CONSTRUCTION UNDER CONSTRUCTION PRIME RENT WEIGHTED AVERAGE SUBMARKET (SQM) (SQM) RATE (SQM) (SQM) PRE-LET (€/SQM/MONTH) RENT (€/SQM/MONTH) Central Office Location East 17,400 4,402,200 0.6% 73,800 269,000 62% 40.00 30.80 Central Office Location West 22,900 2,175,600 1.3% 9,700 244,900 49% 40.00 26.95 Central Office Location MediaSpree 18,600 726,600 1.8% 3,500 388,700 74% 38.00 32.50 Central Office Location Potsdamer Platz 3,500 745,900 1.5% 0 20,000 60% 40.00 36.10 Berlin (Total Market) 129,700 18,838,900 1.6% 91,000 1,667,500 57% 40.00 26.70

KEY LEASE TRANSACTIONS Q1 2020

MICRO- PROPERTY SUBMARKET TENANT SQM TYPE SUBMARKET

BHQ-Z Central Office Location MediaSpree - Zalando 12,900 Pre-Lease (Berlin Headquarter Zalando) MediaSpree Friedrichshain URSULA-BEATE NEISSER Bundesdruckerei Muratti Höfe Berlin South Kreuzberg 8,200 New Lease Head of Research Germany (federal printing institution) + 49 (0) 69 50 60 73 - 140 [email protected] Schultheiss Quartier Berlin West Tiergarten WeWork 7,600 New Lease ROBERT SCHMIDT Research Analyst KEY SALES TRANSACTIONS Q1 2020 + 49 (0) 30 72 62 18 - 280 MICRO- [email protected] PROPERTY SUBMARKET SELLER / BUYER SQM PRICE IN MIO. € SUBMARKET cushmanwakefield.com Central Office Location Quartier Schützenstraße Presseviertel Caleus & GIC / Henderson Park 18,250 200 East Vattenfall Zentrale Central Office Location Chausseestraße - Barings / Credit Suisse 18,900 200 (Chausseestraße 23) East Brunnenstraße A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION Cushman & Wakefield (NYSE: CWK) is a leading global real The Grid Berlin South Kreuzberg Pandion / DWS 12,750 129 estate services firm that delivers exceptional value for real Enter Berlin North Wedding Townscape / Deka 10,000 120 estate occupiers and owners. Cushman & Wakefield is among the largest real estate services firms with approximately 51,000 employees in 400 offices and 70 countries. In 2018, the firm had revenue of $8.2 billion across core services of KEY CONSTRUCTION COMPLETIONS Q1 2020 property, facilities and project management, leasing, capital markets, valuation and other services. MICRO- SQM OWNER / PROPERTY SUBMARKET MAJOR TENANT(S) SUBMARKET OFFICE DEVELOPER ©2020 Cushman & Wakefield. All rights reserved. The information Central Office Location Norges Bank Investment Media Campus Axel Springer Presseviertel Axel Springer 40,700 contained within this report is gathered from multiple sources believed East Management to be reliable. The information may contain errors or omissions and is Central Office Location Hauptbahnhof - presented without any warranty or representations as to its accuracy. Cube Berlin Gleiss Lutz, Deutsche Bahn AG 16,800 Tishman Speyer East Regierungsviertel