Market Report Industrial and Logistics Markets Overview

GERMANY MARKET REPORT INDUSTRIAL AND LOGISTICS MARKETS OVERVIEW

2019 / 2020 NO LAND IN SIGHT

Fueled by ongoing high demand on the Suitable land sites for new-build con- German commercial real estate invest- struction are a rare find in Germany’s ment market and the low interest rate en- core markets and are likely to remain vironment, industrial and logistics assets scarce going forward. continued to perform very well in 2019, once again ranking as the third strongest As a result, developers are looking to snap asset class in Germany after office and up sites as quickly as possible and turning retail. Investors poured a total of €6.6bn to speculative development and renova- into German industrial and logistics as- tion of stock industrial sites. Companies Peter Kunz FRICS sets over the course year. Although this and property developers are also becom- HEAD OF INDUSTRIAL marks a yoy decrease, the drop can be ing more flexible when it comes to their & LOGISTICS EMEA contributed to the current scarcity of search criteria, which puts other logistics [email protected] product. Foreign investors again showed regions where supply is more extensive their enthusiasm for German logistics as- and affordable in the running. sets, generating roughly 60% of annual transaction volume. The largest logistics Demand for logistics assets will remain deal of the year, the Maximus portfolio, in- high thanks the continued stability of the volved a foreign investor. Singapore’s German economy and ongoing e-com- sovereign wealth fund (GIC) acquired the merce boom. With land and construction 28-asset pan-European portfolio at the costs on the rise, property developers will end of the year. German investors contin- need to secure suitable land at an early ued to target their investment at light in- stage in order to fill their project pipeline. dustrial properties in 2019, with the asset The smaller logistics regions around Ger- class accounting for about one third of many’s secondary and tertiary cities in their total transaction volume. the greater vicinity of the country’s major logistics regions will also benefit from the Despite the fact that investment activity current market situation and see growing remains high, we are still seeing a short- demand going forward. age of first-rate core assets. With land hard to come by in Germany’s 8 major industrial and logistics markets, new-build development activity is likely to remain subdued, putting a cap on additional supply. This trend was particularly evident in 2019 take-up results, which were down 18% yoy in the country’s top 8 regions. Berlin (+12%), Munich (+13%) and Leipzig (+1%) were the only markets to post yoy increases in take-up. Other markets such as Hamburg (– 31%), Düsseldorf (– 31%) and Stuttgart (– 43%) experienced steep drops due to a lack of large-scale leases. 3

CONTENTS Logistics and Industrial CONTENTS | 2019

Logistics in Germany 4 / Logistics Regions in Germany 5 2020 Markets

Market Data 6 Overview

Leasing Market | oles International Colliers

Germany 8

Berlin / Brandenburg 11

Düsseldorf 14

Frankfurt/Rhine-Main 17

Hamburg 20

Cologne 23

Leipzig 26

Munich 29

Stuttgart 32

Investment 35

Glossary 38

Contacts /Locations 39 4 LOGISTICS IN GERMANY 2020 / Germany is one of the most attractive demand for logistics space. As a result, logistics markets worldwide thanks to its developers and tenants are being forced central location in Europe, excellent to turn to the peripheral areas surround- Colliers Colliers International | infrastructure, high technological stand- ing major conurbations. ards and excellent building quality. Logis-

Overview tics is Germany’s third-largest economic Germany’s ongoing economic growth and sector after the automotive industry high consumer activity will continue to i cs n Ge rma y | 2019 o gi st L Markets Markets and retail. The market recorded roughly boost demand for suitable logistics space. €279bn in transaction volume in 2019. Investors remain under considerable Logistics properties have also become pressure to invest and are showing in- the third strongest-performing asset creasing interest in logistics assets in the class on the German real estate invest- current low interest rate environment.

Industrial and Logistics ment market. The logistics sector The smaller logistics regions will benefit employs just over 3 million people but, from shortage of space combined with despite favorable performance, still fac- rising land and construction costs in the es significant challenges. country’s top markets going forward as they enjoy comparatively moderate price Limited supply and a lack of skilled work- levels and offer more opportunities for ers are putting the brakes on the sector’s company expansion. growth. Companies on the lookout for space are increasingly taking the availability of labor and local business tax policies into consideration in their deci- sions. Megatrends like e-commerce and same-day delivery are boosting demand for suitable core products in conurbations. Despite the fact that new-build construction activity is on the rise, it will not be enough to meet the anticipated LOGISTICS REGIONS IN GERMANY 5 L Industrial o gi st i cs r e gi ons n Ge rma y | 2019 and Logistics Markets

23 21 Overview Rostock 20 19

Hamburg | Colliers International / Bremerhaven 2020 6.30 28 4.95 Bremen 24 39 300 11 4.70 27

3.60 Berlin 60 Hanover Wolfsburg 1 6.10 Braunschweig 4.70 30 5.10 2 5.10 5.50 31 Osnabrück Magdeburg 13 4.15 4.20 220 4.30 Münster 395 43 100 95 14 110 15 33 Dortmund Duisburg 38 Leipzig Mönchen- Düsseldorf Kassel / Bad Hersfeld 52 4.60 gladbach 5.75 Dresden 4.50 49 Erfurt 3.70 72 Cologne 4.75 4.50 3.70 4 17 45 4.30 80 6.50 220 3.60 5.80 75 485 3.10 Gießen 5.40 80 4.50 Zwickau 60 330 Prime rent in € / sqm/month 180 4.20 71 66 9 ∅ rent in €/sqm/month 48 60 5.40 3.50 Frankfurt 73 Land price in €/sqm 4.50 75 70 Trier Aschaffenburg DEFINITION 160 67 Würzburg 3 93 Prime headline rents for logistics Mannheim 63 and distribution space: Nuremberg > 3.000 sqm Class-A properties ( > 10 m under beam height, 2–3 docking Saarbrücken 62 gates/1.000 sqm, sprinkler system, share 65 5.00 of office space < 10 %) in a prime location 6 Regensburg 4.35 Karlsruhe 4.50 Average rents for logistics 7 and distribution space: 3.30 230 5.70 8 Stuttgart > 3.000 sqm with multifunctional usage 92 ( > 7 m under beam height, 1–2 docking 85 Ingolstadt 4.80 gates / 1.000 sqm, limited share of office 6.50 space) in a traffic-favorable location 200 Ulm / Neu-Ulm 5.20 81 Land price: 94 Undeveloped commercial/industrial areas, 300 4.75 5 Munich ( > 20.000 sqm, mainly flat and rectangular, no / limited usage restrictions) 3.90 7.15 Status January 2020 130 95 96 6.70 Airport Augsburg 400 Freight transport centre 5.70

4.50 Harbour

125 6 MARKET DATA 2020 /

a | 2019 Location Information t

Colliers Colliers International Germany Berlin Düsseldorf Frankfurt Hamburg Cologne Leipzig Munich Stuttgart | Population in 1.000 83,019 3,645 619 753 1,841 1,086 588 1,472 635 M ark et Da

Overview Employees Paying Social Security 33,407 1,528 424 602 996 583 273 897 426 Contributions in 1.000

Markets Markets Unemployment Rate in % 4.9 7.6 6.5 4.9 5.9 7.4 6.1 3.4 3.9

Per Capita Disposable Income in € 24,000 22,220 28,742 27,138 25,720 25,806 21,545 30,478 27,314

Sources: Federal Statistical Office, Land Statistical Offices, Federal Employment Agency, Nexiga GmbH

Industrial and Logistics Industrial & Logistics Leasing

TOP 8 Berlin / Düsseldorf Frankfurt / Hamburg Cologne Leipzig Munich Stuttgart Brandenburg Rhine-Main Take-up 2019 in sqm 2,429,900 474,900 217,900 467,200 332,500 192,300 346,700 227,000 171,400

Change year-on-year in % – 18% 12% – 31% – 28% – 31% – 22% 1% 13% – 43%

Leasing performance 2019 in sqm 1,931,600 451,800 117,100 414,400 268,300 181,000 166,000 202,500 130,500

Change year-on-year in % – 24% 40% – 60% – 26% – 32% – 23% – 40% 1% – 49%

Forecast for 2020

Number of Deals 620 151 70 72 70 47 32 95 83

Average Area Size in sqm 4,730 3,145 3,112 6,580 4,750 3,738 11,005 2,389 3,117

Strongest Branch

Prime Rent in € / sqm / month 6.10 5.75 6.50 6.30 5.80 4.60 7.15 6.50

Forecast for 2020

Average Rent in € / sqm / month 5.10 4.75 5.40 5.00 4.50 3.70 6.70 5.20

Forecast for 2020

Trade Production & Manufacturing Transport & Logistics 7 Industrial DaM ark et and t Logistics Industrial & Logistics Investment – TOP 8* a | 2019

TOP 8 Berlin Düsseldorf Frankfurt Hamburg Cologne Leipzig Munich Stuttgart Markets / Transaction Volume 2019 in m € 2,518 414 413 493 267 129 190 493 119 2020

Change year-on-year in % 1% – 36% 0% – 2% 6% – 37% 692% 114% – 45% Overview

Forecast for 2020 | Colliers International * Refers to the defined logistics market areas

Industrial & Logistics Investment – Germany

2014 2015 2016 2017 2018 2019 Transaction Volume 2019 in m € 3,592 3,972 4,579 8,662 6,814 6,566

Change year-on-year in % 57 11 15 89 – 21 – 4

Industrial Properties Share in % 27 32 31 12 42 28

Logistics Properties Share in % 73 68 69 88 58 72

Share in the Commercial 9 7 9 15 11 9 Real Estate Market in %

Share by International Investors in % 62 53 38 65 47 60

Portfolio Transactions in % 50 47 40 71 56 40

Largest Buyer Group in % Open-ended Opportunity Asset Open-ended Asset Asset real estate funds / managers / real estate managers / managers / funds / Private Fund funds / Fund Fund Special funds equity funds managers Special funds managers managers 33 22 30 33 45 40

Largest Seller Group in % Property Property Property Asset Property Asset developers developers developers managers / developers managers / Fund managers Fund managers 31 20 26 46 30 26

Gross Initial Yield in % for 6.40 5.97 5.50 4.65 4.50 4.20 Class-A properties 8 LEASING MARKET GERMANY

Take-up Deals of similar scale were absent in Ger- many’s other logistics hubs. More leases Just over 2.4 million sqm was let to tenants

2020 were recorded in 2019 than in the previous / or built/purchased by owner-occupiers in year, however (620 in total, +9%), reflect- Germany’s 8 largest logistics hubs in 2019. ing the fact that demand for industrial and That reflects a yoy drop of roughly 18% for logistics space remains high. Smaller units Colliers Colliers International the overall market. If we exclude owner- | of under 3,000 sqm were even more occupier activity, which puts results at popular than in the previous year. The 1.9 million sqm, take-up was down 24%

Overview year’s largest-scale leases were signed by yoy. Results, however, varied from region online furniture retailer Wayfair for to region. The Düsseldorf (– 31%), Rhine- Markets Markets 90,500 sqm in Lich in the northern Rhine- Main (– 28%), Hamburg (– 31%), Cologne L e a s i n g M ark et Ge rma n y | 2019 Main area, Amazon for 31,000 sqm in (– 22%) and Stuttgart (– 43%) regions Schönefeld south of Berlin and automotive posted steep drops in take-up with consid- group BMW for around 32,000 sqm in erably less availability while Berlin (+12%), Vaterstetten (Munich). Munich (+13%) and Leipzig (+1%) contin- Industrial and Logistics ued to experience ongoing momentum thanks to a number of major leases signed.

FAST FACTS TOP 8

2019 2018 Change Take-up in sqm 2,429,900 2,968,200 – 18% Leasing Performance in sqm 1,931,600 2,544,900 – 24% Owner-Occupiers in % 21% 14% – 18% Number of Deals 620 571 9% Average Area Size in sqm 4,730 4,862 – 3%

Figure 1: Take-up in 1,000 sqm Figure 2: Take-up by Size Category in %

500 up to 500 0% 8 452 501–1,000 Others 18% 414 4% 400 1,001–3,000 16% Logistics Service 7 Providers 28%

300 268 Production & 3,001–5,000 14% Manufacturing Companies 28% 6 202 181 181 200 166 130 117 5,001–10,000 23% Trading 101 Companies 26% 5 100 above 10,000 43% 64 53 41 25 23 11 0 4 B F C M 2015 2016 2017 2018 2019

D H L S Berlin Düsseldorf Frankfurt Hamburg

Leasing Performance Owner-Occupiers Cologne Leipzig Munich Stuttgart 9

Supply and Demand Rents Ge rma n y | 2019L e a s i n g M ark et Industrial Although demand for industrial and logis- With a few exceptions, prime and average tics properties remains high, the scarcity rents in top locations continued to climb and of development sites and rising land pric- due to low supply and ongoing high Logistics es, particularly in the large-scale segment demand. Prime rents in Frankfurt am Main of over 10,000 sqm, is putting a damper on remained stable at €6.50 per sqm. High- Markets take-up (– 39%). Take-up results in this priced leases signed for new-build space segment were down in markets such as continue to boost prime rent levels yoy Overview Hamburg and Frankfurt, although results despite lower take-up results. Prime rents /

in those markets were bolstered by de- in Munich rose 2% yoy to a current €7.15 2020 |

mand for units of up to 5,000 sqm (+27%). per sqm while Berlin (€6.10 per sqm, +7%), Colliers International Property developers are also beginning to Hamburg (€6.30 per sqm, +5%) and focus their activities on locations outside Cologne (€5.80 per sqm, +5%) saw even Germany’s 8 top markets, as these offer more significant increases. more attractive prices and greater availability of land. Pre-leasing rates are quite high in the top 8 markets, a factor that continues to encourage speculative development. More and more developers are also looking into brownfield development as a way to bring space to market.

Figure 3: Take-up by Branch Share in % Figure 4: Prime Rents in the TOP 8 in € / sqm

8 Others 18%

Logistics Service 7 Providers 28% Production & Manufacturing Companies 28% 6

Trading Companies 26% 5

4 2015 2016 2017 2018 2019

Berlin Düsseldorf Frankfurt Hamburg

Cologne Leipzig Munich Stuttgart 10

Summary and Outlook

In view of the current uncertainties around 2020 / automotive production and the ongoing scarcity of development sites in Germany’s top 8 regions combined with growing

Colliers Colliers International demand for city logistics driven by the on- | going boom in e-commerce, 2020 is likely to be another average year on Germany’s Overview top 8 industrial and logistics real estate markets. Based on these general condi- Markets Markets tions, we can expect brownfield sites to L e a s i n g M ark et Ge rma n y | 2019 become increasingly popular in prime locations. At the same time, a number of companies flexible enough to do so are likely to turn to nearby markets that boast Industrial and Logistics greater availability. Such markets include centrally located regions with good infrastructure such as Kassel/Bad Hersfeld, the eastern Ruhr region (especially Dort- mund), Hanover, the Rhine-Neckar region and cities such as Augsburg in southern Germany.

Figure 5: Average Rents in the TOP 8 in € / sqm

3 2015 2016 2017 2018 2019

Berlin Düsseldorf Frankfurt Hamburg

Cologne Leipzig Munich Stuttgart BERLIN / BRANDENBURG 11 Industrial B e r l i n / Bra ndenb and Logistics urg | 2019 Markets Overview / 2020 | Colliers International

FAST FACTS

2019 2018 Change Take-up in sqm 474,900 422,500 12% Leasing Performance in sqm 451,800 322,300 40% Number of Deals 151 102 48% Prime Rent* in €/sqm/month 6.10 5.70 7% Average Rent in €/sqm/month 5.10 5.00 2%

*achievable top rent in new buildings

Take-up according to Location

Submarket Take-up in sqm Share 1 Center 15,100 3%

2 City North 39,800 8%

3 City East 35,200 8%

4 City South 73,000 15%

5 City West 25,600 6%

6 Periphery North 45,300 10%

7 Periphery East 14,200 3%

8 Airport Area BER 20,300 3%

9 Periphery South 164,000 35%

10 Periphery West 42,400 9%

Total 474,900 100 12

LEASING 2020 / Take-up Supply and Demand

The Berlin industrial and logistics market While leases signed for units of over | 2019 urg

Colliers Colliers International registered total take-up of roughly 10,000 sqm accounted for around 50% of | 474,900 sqm, up 12% yoy and exceeding take-up in the previous year, the share 2015’s record result of 451,400 sqm. claimed by this segment dropped by Overview Take-up results excluding owner-occupi- almost half in 2019 (122,400 sqm, or

B e r l i n / Bra ndenb ers were particularly strong. 145 leases 26%). The Amazon deal was the only one Markets Markets were signed for a total of 451,800 sqm to exceed the 20,000 sqm mark compared in 2019, reflecting a significant 40% yoy to five such deals recorded in the segment increase and marking a new record result. in 2018. With the availability of units of Markets such as Stuttgart (– 43%), this size continuing to drop and develop- Frankfurt (– 28%) and Hamburg (– 31%) ment potential already exhausted in some Industrial and Logistics experienced a sharp downward trend in hot spots, we do not expect the situation annual take-up in contrast, putting Berlin to relax any time soon. Small-scale units and the Leipzig region at the fore of (up to 3,000 sqm), however, recorded an Germany’s logistics hubs. Notable deals increase in take-up compared to the pre- included leases signed by Amazon for vious year. A total of 99 leases were roughly 31,000 sqm in Schönefeld and signed in this segment, reflecting a mar- Microvast for around 16,000 sqm in ket share of 28% (around 130,700 sqm). Ludwigsfelde as well as Kühne & Nagel’s As such, the segment accounted for lease of 15,500 sqm in Oberkrämer near around two thirds of all leases signed in Oranienburg. 2019.

Figure 1: Take-up in 1.000 sqm Take-up according to Size Category

Size in sqm Take-up in sqm Share 500 474.9 451.4 up to 500 1,000 0% 424.8 422.5 501 – 1,000 27,900 6% 400 352.7 1,001 – 3,000 101,800 21% 3,001 – 5,000 94,600 20% 300 5,001 – 10,000 127,200 27%

above 10,000 122,400 26% 200 Total 474,900 100%

100

0 2015 2016 2017 2018 2019

Whole year Average 2015 – 2019 13

In terms of tenant breakdown, retailers Outlook

contributed slightly less to overall take-up Industrial B e r l i n / Bra ndenb Fresh supply will be hitting the market in in 2019, a result that can be attributed to 2020 thanks to a number of ongoing prop-

the lack of high-volume deals in the pe- and erty developments in the periphery. riphery. Retailers accounted for a total of Logistics However, the supply bottleneck in the 142,500 sqm in take-up, down 30% yoy.

municipal area may push prices up even urg | 2019

This decrease, however, is mainly the Markets further and prevent them from leveling result of the limited availability of units off. Demand for small-scale light industri- over 10,000 sqm as demand in the region Overview /

al space is also going to pick up in 2020 2020 remains high. with prices increasing as a result as prac- |

tically no space is currently available for Colliers International Rents immediate tenancy. In light of the current supply situation, we expect 2020 take-up Ongoing high demand is also evident in to reach levels similar to those recorded the current rent trend. No other region in the previous year. has seen a comparable increase in prime rents in the past two years. Some of the logistics space over 3,000 sqm in the municipal area is currently going for €6.90 per sqm. And, as availability within city limits grows increasingly scarce, we could see prime rents continue to rise. On the overall market (including the periphery), prime rents currently come to €6.10 per sqm, up 40 cents yoy. Average rents rose by 10 cents to €5.10 per sqm at year-end 2019.

Figure 2: Take-up by Branch Share in % Figure 3: Prime and Average Rents in ¤/sqm

500 474.9 7 451.4 Production & Manufacturing 424.8 422.5 Companies 23% 6.10 400 352.7 6 Logistics Service 5.70 Providers 28% 300 5.00 5.00 5.00 5 Trading 5.10 5.00 200 Companies 31% 4.50 Others 18% 4 4.25 100 4.00

0 3 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

Whole year Average 2015 – 2019 Prime Rent Average Rent 14 DÜSSELDORF 2020 / Colliers Colliers International | rf | 2019 sseldo Dü Overview Markets Markets Industrial and Logistics

FAST FACTS

2019 2018 Change Take-up in sqm 217,900 317,600 – 31% Leasing Performance in sqm 117,100 295,600 – 60% Number of Deals 70 66 6% Prime Rent* in €/sqm/month 5.75 5.75 0% Average Rent in €/sqm/month 4.75 4.75 0%

*achievable top rent in new buildings

40 40 Take-up according to Location Mühlheim 57 59 an der Ruhr Submarket Take-up in sqm Share 1 Düsseldorf 40,000 21% 5 524

Krefeld 44 2 Neuss 15,700 22%

7 Meerbusch 3 Kaarst 1,200 1%

Ratingen 44 6 4 Willich 0 8% illich 52 4 Mettmann Viersen 5 Krefeld 16,900 20% 52 1 Düsseldorf 3 8 6 Meerbusch 0 0% Mnchengladbach Kaarst Erkrath 13 Neuss 7 Ratingen 13,000 12% Korschenbroich 46 14 Hilden 8 Erkrath 500 0% 2 9 9 Hilden 10,800 0%

61 59 11 10 10 Langenfeld 5,000 3% 540 Dormagen 46 12 Langenfeld Rheinland 11 Dormagen 53,900 9%

Grevenbroich 57 12 Grevenbroich 15,100 3%

Leverkusen 13 Korschenbroich 0 0% 3 14 Mönchengladbach 45,800 1% 44 61 1 Total 217,900 100% 15

LEASING Industrial Dü sseldo rf | 2019

Take-up continues to dwindle along with the and

amount of available space able to meet Logistics The Düsseldorf industrial and logistics modern standards in terms of equipment, market recorded 217,900 sqm in take-up in / Markets location and size. 2020 2019, around 100,000 sqm less than in the previous year (– 31%). Annual results came Overview in well below expectations (– 36%) com- Supply and Demand pared to the 5-year average (342,500 sqm).

Take-up of units ranging from 5,001 sqm |

The bottleneck in the region becomes Colliers International to 10,000 sqm saw the steepest drop, particularly obvious if we look at take-up down yoy from 24% to 9%. Units featuring excluding owner-occupiers, with only less than 5,000 sqm accounted for rough- 117,100 sqm taken up by tenants in 2019. ly 40% of total take-up (about 87,500 sqm, This reflects a yoy decrease of 60%. +41%). This increase shows that the Only 4 deals were signed for units over Düsseldorf market continues to be 10,000 sqm compared to more than twice characterized by exceptionally high de- as many in 2018. The largest deals posted mand combined with limited availability, in 2019 included the Hoyer GmbH owner- particularly in prime locations. That occupier development in Dormagen means there is a very good chance that encompassing roughly 50,000 sqm of any space to come available will be new-build space and the ABC-Logistik quickly absorbed by the market. The trend development on a brownfield site near the towards speculative property develop- Port of Düsseldorf (around 11,600 sqm ment also reflects current excess de- hall space). Demand for units starting at mand. Supply in the large-scale segment 5,000 sqm remains high, driven by the is not sufficient to meet that demand due prevailing tenant structure. However, the to a lack of space available for immediate supply of suitable development sites

Figure 1: Take-up in 1.000 sqm Take-up according to Size Category

Size in sqm Take-up in sqm Share 500 up to 500 4,400 2% 435.7 501 – 1,000 15,000 7% 400 346.7 343.8 1,001 – 3,000 40,100 18% 317.6 3,001 – 5,000 28,000 13% 300 5,001 – 10,000 19,500 9% 217.9 above 10,000 110,900 51% 200 Total 217,900 100%

100

0 2015 2016 2017 2018 2019

Whole year Average 2015 – 2019 16

tenancy at stock properties, which means Outlook demand is primarily being met with The lack of development sites is currently

2020 new-build developments. However, land / being further exacerbated by the city’s sites zoned for new-builds in prime high requirements on companies in terms locations are in limited supply, which is of jobs, taxes and volume. Companies and increasing tenant willingness to turn to Colliers Colliers International property developers are therefore likely to | peripheral locations within the region.

rf | 2019 sseldo intensify their interest in locations out-

Dü The high pre-leasing rate at new-build side currently coveted submarkets such

Overview developments is also an indication as Neuss, Krefeld and Mönchengladbach. that there just is not enough space Chances are also good that companies Markets Markets available on the market at the moment will continue to build their own logistics to adequately meet demand. properties in light of the new-build supply bottleneck in the Düsseldorf core area. Rents

Industrial and Logistics Prime and average rents are currently stable with no significant increases likely despite excess demand. We can also expect prime rents for units over 3,000 sqm to remain stable over the course of the year. We may see an increase in prices for modern space (light industrial) at business parks within city limits, as companies are willing to pay more for location and equipment in some cases. Prime rents for this quality of space within city limits currently come to €7.00 per sqm.

Figure 2: Take-up by Branch Share in % Figure 3: Prime and Average Rents in ¤/sqm

6 Production & Manufacturing 5.75 5.75 Companies 23% 5.40 5.40 5.40

Trading Companies 18% 5

Logistics Service 4.75 4.75 Providers 33% 4.50 4.50 4.50 4

Others 26%

3 2015 2016 2017 2018 2019

Prime Rent Average Rent FRANKFURT / RHINE-MAIN 17 FRA N KFUR Industrial and T / R H I NE- MAI N | 2019 Logistics Markets Overview / 2020 | Colliers International

FAST FACTS

2019 2018 Change Take-up in sqm 467,200 650,200 – 28% Leasing Performance in sqm 414,400 563,600 – 26% Number of Deals 72 83 – 13% Prime Rent* in €/sqm/month 6.50 6.50 0% Average Rent in €/sqm/month 5.40 5.20 4%

*achievable top rent in new buildings

Take-up according to Location

Submarket Take-up in sqm Share 480 Lauterbach 6 5.75 (Hessen) Production & Manufacturing 5.75 Gießen 1 Frankfurt am Main 25,200 5% Fulda etzlar Companies 23% 485 8 5.40 5.40 5.40 7 5 2 Offenbach 15,500 3% 3 Darmstadt 27,100 6% Trading Butzbach Companies 18% 5 Limburg an der Lahn Friedberg 66 (Hessen) 9 4 Groß-Gerau 131,300 28%

Logistics Service 4.75 4.75 7 5 Mainz + Wiesbaden 27,400 6% Bad Homburg 45 10 Providers 33% vor der Hhe 4.50 4.50 4.50 6 Main-Taunus-District 20,800 5% Gelnhausen Frankfurt 4 Hofheim am Taunus am Main Hanau 7 Hochtaunus-District 5,000 1% Wiesbaden 1 Oﬀenbach am Main 66 Others 26% 66 6 8 Gießen 117,200 25% 671 661 2 11 5 Dietzenbach Mainz Karlstadt 9 Wetteraukreis 4,600 1% Ingelheim am Rhein 4 Aschaﬀenburg

Groß-Gerau 3 3 Darmstadt 10 Main-Kinzig-District 85,800 18%

67 3 2015 2016 2017 2018 2019 63 11 Aschaffenburg 7,300 2%

Gernsheim Prime Rent Average Rent Alzey Total 467,200 100% Miltenberg

61 Heppenheim (Bergstraße) Erbach 81 18

LEASING 2020 / Take-up Supply and Demand

The Frankfurt industrial and logistics Leases signed for over 10,000 sqm once

Colliers Colliers International market generated 467,200 sqm in total again contributed the lion’s share to total | take-up in 2019, reflecting the weakest results, generating more than half of total

T / R H I NE- MAI N | 2019 result ever recorded and coming in take-up (59%, or 278,900 sqm). However, Overview around 24% shy of the 5-year average this reflects a significant drop from the (619,000 sqm). This drop in take-up previous year’s 75%, or 488,100 sqm. Markets Markets FRA N KFUR can be primarily attributed to a lack of Although demand for units of over large-scale transactions in the space 10,000 sqm remains stable, the supply segment of over 20,000 sqm and to of developable sites is dwindling and the increasing shortage of logistics increasingly less space in this segment is development sites, which tend to involve being added to the market or becoming Industrial and Logistics long lead times. available for immediate tenancy. As such, more and more companies are turning to The most notable transactions recorded peripheral locations in the Rhine-Main in the region in 2019 include the leases region, including Gießen, Mainz and signed by online furniture retailer Wayfair Aschaffenburg, and are expanding their for 90,500 sqm in the Lich submarket of search radius to the edges of the Frank- Gießen, logistics service provider Zufall furt core area. Several property develop- for 35,000 sqm in Flieden in the Main- ments are in planning for the new year Kinzig-Kreis district and Geis Industrie- or are already under construction, and Service GmbH in Rodenbach (32,000 sqm) we can expect these developments to as well as two new-build developments in address the continued shortage of space Gernsheim for Amazon (20,000 sqm) and to some extent. Current developments Sonepar (26,000 sqm). include the Hillwood and Nvelop business

Figure 1: Take-up in 1.000 sqm Take-up according to Size Category

Size in sqm Take-up in sqm Share 800 720.2 up to 500 2,500 1% 700 650.2 501 – 1,000 8,800 2% 584.0 600 1,001 – 3,000 32,800 7% 3,001 – 5,000 36,700 8% 500 463.0 467.2 5,001 – 10,000 107,500 23% 400 above 10,000 278,900 59% 300 Total 467,200 100% 200

100

0 2015 2016 2017 2018 2019

Whole year Average 2015 – 2019 19

park development in Erlensee, which will Outlook FRA N KFUR comprise 4 construction phases encom- Industrial New space will be added to the market in passing a total area of 60,000 sqm. Start 2020 thanks to several property develop-

of construction on phase 1 is scheduled and

ments currently underway. Demand is T / R H I NE- MAI N | 2019 for spring 2020. Logistics set to remain stable and we can expect several major deals to be signed over the Markets Rents course of the year. We can also look for the trend towards shorter lease terms The excess demand we are currently Overview to continue in 2020, as a number of ten- /

seeing on the market is pushing up prices 2020 ants signed leases with terms of under

for stock space, in some cases to rent |

5 years in 2019. Colliers International levels typically paid for new-build properties. Average rents experienced another increase as a result to a current €5.40 per sqm with prime rents stable at €6.50 per sqm in the core locations around Frankfurt Airport. That puts Frankfurt and Stuttgart (€6.50 per sqm) in second place following Munich (€7.15 per sqm) in a national comparison.

Figure 2: Take-up by Branch Share in % Figure 3: Prime and Average Rents in ¤/sqm

800 7 720.2 Production & Manufacturing 6.50 6.50 700 650.2 Companies 13% 6.40 6.30 6.30 584.0 600 Logistics Service Providers 28% 6 500 463.0 467.2

400 Trading Companies 48% 5.40 300 5 5.20 5.20 5.20 5.10 200 Others 11%

100

0 4 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

Whole year Average 2015 – 2019 Prime Rent Average Rent 20 HAMBURG 2020 / | 2019 urg Colliers Colliers International | Ham b Overview Markets Markets Industrial and Logistics

FAST FACTS

2019 2018 % Take-up in sqm 332,500 484,600 – 31% Leasing Performance in sqm 268,300 393,400 – 32% Number of Deals 70 78 – 10% Prime Rent* in €/sqm/month 6.30 6.00 5% Average Rent in €/sqm/month 5.00 4.85 3%

*achievable top rent in new buildings

23 uickborn Bargteheide 21 Take-up according to Location

7 Norderstedt Submarket Take-up in sqm Share Tornesch 6 Tangstedt Ahrensburg 1 City West 12,200 4% Langenhorn Pinneberg 7 Ellerbek Schnelsen 2 City North-West 4,800 1% Rellingen 2 3 Siek Halstenbek Niendorf Ohlsdorf 3 City North-East 6,300 2% Rahlstedt Braak Schenefeld Eidelstedt Stapelfeld Lurup 4 City East 52,000 16% edel Stellingen Rissen Barmbek Barsbüttel itzhave 24 1 5 City South 124,000 37% Glinde Hamburg Oststeinbek 6 Periphery North-West 25,700 8% Billbrook altershof Steinwerder 8 Aumühle Moorﬂeet GZ 255 7 Periphery North-East 69,400 21% illhelmsburg 25 Billwerder 5 Moorburg Butehude 253 Allermhe 8 Periphery East 26,600 8% Hausbruch Harburg 4 Neu ulmstorf 9 Periphery South-East 5,900 2%

1 Geesthacht

261 10 Periphery South-West 5,600 1%

10 Hittfeld Total 332,500 100% Stelle 9 insen (Luhe) Hollenstedt 39 enzendorf 7 Buchholz in der Nordheide 21

LEASING Ham b Industrial urg | 2019

Take-up of construction on Wiska headquarters in and

Kaltenkirchen in northern Hamburg was Logistics Hamburg’s industrial and logistics real

one of the few owner-occupier deals to / estate market closed out 2019 with total 2020

have a significant impact on the market. Markets take-up of 332,500 sqm, the weakest The first construction phase (around result posted in the past seven years. 10,000 sqm) will primarily focus on the Overview Although tenant and owner-occupier logistics and production areas. The activity have generated take-up results

facility is scheduled to be up and running |

of over 450,000 sqm in the past several Colliers International by early 2021. years, even posting more than 668,800 sqm in 2016, 2019’s year-end result came in at just half. This considera- Supply and Demand ble drop in take-up can primarily be The Hamburg market is currently unable attributed to the absence of large-scale to meet demand due to a current lack of deals signed for over 10,000 sqm. space suitable for large-scale logistics Although units of this size accounted for development. Industrial and logistics almost 60% of total take-up in the previ- space is particularly hard to come by in ous year, 2019 results put their share the logistics hotspots located in the south at just one third (roughly 109,100 sqm). of the city as well as in the commercial Large-scale leases recorded in 2019 district of Billbrook to the east. The num- include those signed by logistics service ber of new-builds available for immediate provider ULD United Logistics & Distribu- tenancy dropped drastically in 2019. As a tion for around 30,000 sqm on Dradenau result, companies will have to wait for straße in Waltershof (port area) and by property developments to be completed Nutwork for almost 12,000 sqm of logis- or stock space to come available. Only a tics space in Völlhöfner Weiden. The start

Figure 1: Take-up in 1.000 sqm Take-up according to Size Category

Size in sqm Take-up in sqm Share 800 up to 500 0 0%

700 668,8 501 – 1,000 1,600 0% 593,4 600 1,001 – 3,000 49,900 15% 484,6 3,001 – 5,000 69,400 21% 500 460,9 5,001 – 10,000 102,500 31% 400 332,5 above 10,000 109,100 33% 300 Total 332,500 100% 200

100

0 2015 2016 2017 2018 2019

Whole year Average 2015 – 2019 22

handful of new-build developments are Outlook scheduled for completion in the foreseea- Demand is set to remain high in 2020 with

2020 ble future. The Mach 2 speculative / competition for available units intensify- development in Hamburg-Wilhelmsburg ing as a result. Large-scale leases are is expected to add space to the market again on the horizon with the listing of the

| 2019 urg in the coming 12 months. Developer Colliers Colliers International Mach 2 development, which is scheduled | Fourparx and investor AEW Europe are Ham b for completion in August 2021. However, planning to build a new type of logistics 2020 take-up results are unlikely to match

Overview property with two levels and a total of the average of the past 5 years (around over 100,000 sqm of modern hall space. 531,500 sqm). Markets Markets

Rents

Rent trends reflect the tense relationship between supply and demand that current-

Industrial and Logistics ly dominates the market with prime and average rents posting another yoy increase in 2019. Prime rent for modern logistics space of over 3,000 sqm came to €6.30 per sqm at year-end, up consid- erably by 30 cents yoy. That puts Ham- burg along with Berlin among the markets to post the highest rent increases last year.

Figure 2: Take-up by Branch Share in % Figure 3: Prime and Average Rents in ¤/sqm

7 Production & Manufacturing Companies 14% 6.30 6.00 Trading 5.80 5.80 5.80 Companies 28% 6

Logistics Service Providers 51% 5 5.00 Others 7% 4.85 4.85 4.75 4.60

4 2015 2016 2017 2018 2019

Prime Rent Average Rent COLOGNE 23 Industrial C olo g ne | 2019 and Logistics / 2020 Markets Overview | Colliers International

FAST FACTS

2019 2018 Change Take-up in sqm 192,300 248,100 – 22% Leasing Performance in sqm 181,000 236,100 – 23% Number of Deals 47 37 27% Prime Rent* in €/sqm/month 5.80 5.50 5% Average Rent in €/sqm/month 4.50 4.50 0%

*achievable top rent in new buildings

46 Take-up according to Location

46 Submarket Take-up in sqm Share 59 7 57 1 Cologne 36,800 19% 540 Production & Manufacturing 542 Companies 14% 3 2 Leverkusen 0 0% 6.30 2 3 Bergisch Gladbach 0 0% 44 6.00 15 12 Leverkusen 4 Rösrath 0 0% Trading 5.80 5.80 5.80 Companies 6 Bedburg Pulheim Bergisch 5 Airport Area Cologne/Bonn 0 0% 28% 61 Gladbach 14 3 1 6 Troisdorf 34,100 18% Bergheim 1 4 Logistics Service Kln 7 Niederkassel 0 0% 11 Providers 51% 559 4 8 Wesseling 1,000 1% Frechen 4 Rsrath 5 Kerpen GZ 13 10 9 Brühl 0 0% Hürth 5.00 555 Flughafen Kln/Bonn Others 7% 4.85 4.85 10 Hürth 0 0% 4.75 Brühl 5 9 8 Niederkassel 11 Frechen 17,100 9% 4.60 Düren 6 535 esseling 7 Troisdorf 12 Pulheim 27,600 14% 4 560 13 Kerpen 46,400 24% 2015 2016 2017 2018 2019 59 14 Bergheim 11,300 6% Bonn 562 3 15 Bedburg 18,000 9% Prime Rent Average Rent 61

Euskirchen 565 Total 192,300 100% 24

LEASING 2020 / Take-up signed by logistics service provider Log- win (17,000 sqm) in Kerpen, the expansion Cologne’s industrial and logistics real of industrial company Gerflor involving Colliers Colliers International estate market finished out 2019 with total | g ne | 2019 olo just under 9,000 sqm in Troisdorf and C take-up (including owner-occupiers) of completion of the renovation of Cologne’s 192,300 sqm, down 22% yoy (2018:

Overview theaters (roughly 8,100 sqm). 248,100 sqm). The market was also unable to match the previous year’s result Markets Markets excluding owner-occupiers (– 23%). Supply and Demand Similar to Germany’s other top 8 industri- New-build activity in Cologne was quite al and logistics markets, this drop in solid compared to Germany’s other mar- take-up can be primarily attributed to the kets. A handful of speculative new-build absence of large-scale leases. This trend Industrial and Logistics developments are currently underway in can also be seen in the number of deals the city’s sought-after locations, includ- signed. Although more leases were ing construction of LogPlaza Frechen en- signed in 2019 than in the previous year compassing 18,000 sqm of new-build (+27%), many of them involved small and space west of the Rhine River. These medium-sized units. Leases signed for developments will boost supply in the city between 5,001 – 10,000 sqm accounted for as we continue into the new year. As almost one third of total take-up, twice as such, leases signed for new-build space much as in 2018. Units of over 10,000 sqm as well as pre-leasing activity also ac- also generated roughly one third of total counted for roughly 50% of take-up in take-up (60,200 sqm). The share claimed 2019. Developers continue to focus on by this segment, however, was considera- speculative projects as demand for indus- bly higher in the previous year at 44% trial and logistics space remains high and (2018: 108,200 sqm). The largest-scale tenants looking for units over 5,000 sqm leases of the year included the lease

Figure 1: Take-up in 1.000 sqm Take-up according to Size Category

Size in sqm Take-up in sqm Share 300 up to 500 400 0%

248,1 501 – 1,000 7,600 4% 250 1,001 – 3,000 41,600 22% 199,4 198,2 192,3 200 3,001 – 5,000 20,400 11% 167,4 5,001 – 10,000 62,100 32% 150 above 10,000 60,200 31%

100 Total 192,300 100%

0 2015 2016 2017 2018 2019

Whole year Average 2015 – 2019 25

are still coming up short-handed. Kerpen Outlook

recorded the highest demand in 2019 with Industrial C In light of upcoming property develop- olo g ne | 2019 take-up at 46,400 sqm, up 30% yoy, ments planned in the Cologne periphery

thanks in part to the large-scale lease and and current land reserves, we expect signed by Logwin mentioned above. The Logistics tension on the market to ease slightly in /

Pulheim submarket managed to double 2020 terms of units starting at 5,000 sqm.

its take-up results yoy with roughly Markets As such, we may see 2020 take-up 27,600 sqm. Take-up within Cologne city results not only match previous-year limits came to around 36,800 sqm. Al- Overview levels but even exceed them. though this reflects a yoy increase of 23%,

these results are significantly down from | Colliers International 2016 (77,700 sqm) and 2017 (97,100 sqm). The Prologis and Alcaro developments in Cologne-Niehl and Cologne-Kalk could potentially increase the supply of space within Cologne city limits.

Rents

Rents continued to rise over the course of the year due to ongoing limited availability and high construction costs, with modern logistics space currently going for €5.80 per sqm in some cases. These prices, however, are only being paid in locations west of the Rhine within Cologne city limits. Following the increase recorded in Q4 2018, average rents remained stable at €4.50 per sqm.

Figure 2: Take-up by Branch Share in % Figure 3: Prime and Average Rents in ¤/sqm

300 6 5.80 Trading 248,1 Companies 16% 5.50 250 Production & 5.20 5.20 Manufacturing 5.00 199,4 198,2 192,3 200 Companies 20% 5 167,4 Logistics Service 150 Providers 32% 4.50 4.50 100 4 4.20 4.20 Others 32% 4.00

0 3 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

Whole year Average 2015 – 2019 Prime Rent Average Rent 26 LEIPZIG 2020 / Colliers Colliers International | L e i p zig | 2019 Overview Markets Markets Industrial and Logistics

FAST FACTS

2019 2018 Change Take-up in sqm 346,700 343,700 1% Leasing Performance in sqm 166,000 275,800 – 40% Number of Deals 32 25 28% Prime Rent* in €/sqm/month 4.60 4.60 0% Average Rent in €/sqm/month 3.70 3.70 0%

*achievable top rent in new buildings

Magdeburg Take-up according to Location Submarket Take-up in sqm Share 1 Leipzig 114,600 33%

5 2 District Leipzig 38,400 11% Dessau-Rolau Stadt ittenberg 4 3 Nordsachsen 6,300 2% 6

Anhalt-Bitterfeld 4 Wittenberg 12,600 4%

9 5 Dessau-Roßlau 0 0%

14 3 Nordsachsen 6 Anhalt-Bitterfeld 116,000 33%

7 Halle (Saale) Stadt 7 Halle (Saale) 22,600 7% 143 GZ 8 Saalekreis 36,200 10% Saalekreis 1 38 Leipzig 8 9 Total 346,700 100% 14 38

Landkreis Leipzig

72 27

LEASING L e i p zig | 2019 Industrial

Take-up Supply and Demand and Logistics

The Leipzig industrial and logistics mar- Leases signed for units of over 10,000 sqm / 2020 ket recorded total take-up of roughly accounted for roughly three quarters of Markets 346,700 sqm in 2019, topping 2018’s re- total take-up, including the lease signed cord results by a few thousand square by an automotive company for around Overview meters (2018: 343,700 sqm). This increase 23,300 sqm of new-build space at Segro is even more impressive if we look at Logistics Park near Leipzig Airport and |

long-term performance, with 2019 results the lease signed by intralogistics provider Colliers International exceeding the 5-year average by an im- Dematic for 18,000 sqm in Leipzig. pressive 43%. This increase can in part be attributed to several large-scale Despite the shortage of supply, particu- owner-occupier developments, including larly for units over 5,000 sqm, there is retailer Rossman’s project (26,000 sqm) some stock space that is still available. in Landsberg (Saxony-Anhalt) and the These properties, however, are not up to expansion of the site occupied by tech current standards and are therefore manufacturer Tesvolt in Wittenberg having a difficult time finding tenants (around 12,000 sqm). The completion of despite the high demand in the Leipzig a paper factory in Sandersdorf-Brehna region, primarily due to high ancillary (Anhalt-Bitterfeld district) for manufac- costs and outdated building technology. turer Progroup AG deserves particular mention. With a volume of over €460m, The production and manufacturing sector the development was the largest invest- continues to be the source of highest ment project in Saxony-Anhalt in 2019. demand in the Leipzig region, accounting for almost 200,000 sqm, or 58% of total take-up. Logistics service providers

Figure 1: Take-up in 1.000 sqm Take-up according to Size Category

Size in sqm Take-up in sqm Share 400 up to 500 0 0% 343.7 346.7 501 – 1,000 0 0%

300 279.0 1,001 – 3,000 14,300 4% 258.0 3,001 – 5,000 9,900 3%

5,001 – 10,000 67,800 20% 200 above 10,000 254,700 73%

116.0 Total 346,700 100% 100

0 2015 2016 2017 2018 2019

Whole year Average 2015 – 2019 28

(19%) and retailers (16%) trailed at some Outlook distance. Retailers saw take-up cut in half Availability is more important than

2020 yoy due to the absence of leases signed by / location at the moment, as suppliers in major retailers. particular are currently under pressure to find space with a set completion date.

Colliers Colliers International Around 100,000 sqm of speculative |

L e i p zig | 2019 Rents logistics space is currently under con- Prime rents (€4.60 per sqm) and average struction, only about 10,000 sqm of

Overview rents (€3.70 per sqm) for logistics space which is scheduled for completion by starting at 3,000 sqm remained stable mid-2020. The remaining space will not Markets Markets over the course of 2019. However, there is hit the market until late 2020 or early a chance that we may see a slight drop in 2021. As a result, companies will have to new-build rents going forward, particu- manage with rather limited supply in larly in the Halle/Saale and Großkugel 2020. area, i.e. primarily around Leipzig-Halle

Industrial and Logistics Airport, as a number of property developers are currently active there within a relatively small radius.

Figure 2: Take-up by Branch Share in % Figure 3: Prime and Average Rents in ¤/sqm

5 Trading 4.60 4.60 Companies 16% 4.50 4.50 4.30 Logistics Service Providers 19% 4 Production & Manufacturing Companies 58% 3.70 3.70 3.50 3.50 3 Others 7% 3.20

2 2015 2016 2017 2018 2019

Prime Rent Average Rent MUNICH 29 Industrial M u n i ch | 2019 and Logistics / 2020 Markets Overview | Colliers International

FAST FACTS

2019 2018 Change Take-up in sqm 227,000 201,100 13% Leasing Performance in sqm 202,500 201,100 1% Number of Deals 95 97 – 2% Prime Rent* in €/sqm/month 7.15 7.00 2% Average Rent in €/sqm/month 6.70 6.60 2%

*achievable top rent in new buildings

Freising Take-up according to Location

Submarket Take-up in sqm Share 5 Hallbergmoos 1 Center 0 0% Trading 4.60 4.60 Erding 4.50 4.50 Neufahrn Companies 16% 11 Eching 2 Center North-West 0 0% 4.30 Sulzemoos 92 Logistics Service nterschleiheim 3 Center North-East 0 0% Oberschleiheim Providers 19% 88 Dachau Garching 12 Bergkirchen 4 9 4 Center South-East 0 0% 99 Production & Maisach Allach 5 Center South-West 0 0% Manufacturing Olching Milbertshofen Kirchheim bei nterfhring Companies 58% Moosach München 3.70 3.70 Fürstenfeldbruck Poing 6 City North-West 20,000 9% 3.50 3.50 6 2 7 München 3 7 City North-East 5,300 2% 99 94 3 1 Feldkirchen 3.20 96 Others 7% 5 4 Gilching Gräfelfing Vaterstetten 8 City South-East 5,900 3% Sendling 8 8 9

995 9 City South-West 5,400 2%

10 nterhaching 10 Periphery South-West 36,000 16% 2 Baierbrunn 13 11 Periphery North-West 35,200 16%

Brunnthal 2015 2016 2017 2018 2019 952 12 Periphery North-East 102,200 45% Prime Rent Average Rent 13 Periphery South-East 17,000 7% 95 Total 227,000 100% 30

LEASING 2020 / Take-up Supply and Demand

The Munich industrial and logistics mar- Only three leases were signed for over

Colliers Colliers International ket recorded roughly 202,500 sqm in 10,000 sqm in the Munich region, includ- | M u n i ch | 2019 take-up (excluding office and common ing technology company Hönle’s own- areas) in 2019, matching previous-year er-occupier development in Gilching Overview results (2018: 201,100 sqm). However, (roughly 14,500 sqm). Thanks to the deal results did fall short of the five-year aver- signed by BMW, deals for over 5,000 sqm Markets Markets age by 13%. If we include owner-occupier accounted for 35% of total take-up, or activity, take-up for 2019 totaled roughly 79,700 sqm (9 deals signed). The space 227,000 sqm. The largest deal of the year segment of between 1,000 sqm and was signed by automobile manufacturer 3,000 sqm again proved the most popular, BMW for a property in Vaterstetten to the generating a total of 68,900 sqm with Industrial and Logistics east of Munich. The new site will feature about 42 deals signed. The segment also around 32,000 sqm of hall space and is recorded a yoy increase of 27%. located in the new VGP Park Parsdorf. BMW is planning to move into the property Demand continues to be driven by in 2020. Construction on the large-scale companies from the production and property development began last October manufacturing sector, which claimed and the development will feature total a 47% share, or 106,200 sqm, in line rental space of 250,000 sqm. Machine with previous-year results. building company Kraus-Maffei is planning to relocate its premises from Munich continues to lag behind in terms Allach to VGP Park Parsdorf by 2022. of new-build activity, falling short of Germany’s other top locations such as Berlin, Hamburg and Frankfurt. Aside

Figure 1: Take-up in 1.000 sqm Take-up according to Size Category

Size in sqm Take-up in sqm Share 400 up to 500 4,100 2% 342.4 501 – 1,000 20,100 9%

300 1,001 – 3,000 68,900 30% 250.7 3,001 – 5,000 54,200 24% 221.7 227.0 201.1 5,001 – 10,000 34,200 15% 200 above 10,000 45,500 20%

Total 227,000 100% 100

0 2015 2016 2017 2018 2019

Whole year Average 2015 – 2019 31

from the first construction phase at VGP Outlook

Park Parsdorf, there are currently no Industrial M u n i ch | 2019 Rents are likely to continue to rise, leading significant new-build developments many occupiers to turn to surrounding

underway to add space to the market. As and regions such as Augsburg, Ingolstadt and a result, the majority of leases are still Logistics

Moosburg. We expect this year’s annual / being signed for space at stock proper- 2020 take-up to match previous-year results

ties. This trend can be seen in current Markets thanks to the VGP Park development. price levels with space at stock proper-

ties in some cases even going for new- Overview build prices. Supply on the market contin-

ues to be severely limited and available | Colliers International space is often being re-let off-market.

Rents

Prime rents for warehouses exceeding 3,000 sqm rose 2% yoy to €7.15 per sqm. Average rents also experienced a slight increase to a current €6.70 per sqm. Warehouse rents at the moment are higher in Munich than in any other Ger- man city.

Figure 2: Take-up by Branch Share in % Figure 3: Prime and Average Rents in ¤/sqm

8 Logistics Service Providers 11%

7.15 Trading 7.00 6.85 6.85 Companies 19% 7 6.75 Production & Manufacturing 6.70 6.60 Companies 47% 6.50 6 6.10 Others 23% 6.00

5 2015 2016 2017 2018 2019

Prime Rent Average Rent 32 STUTTGART 2020 / t | 2019 gar Colliers Colliers International | t u tt S Overview Markets Markets Industrial and Logistics

FAST FACTS

2019 2018 Change Take-up in sqm 171,400 300,400 – 43% Leasing Performance in sqm 130,500 257,000 – 49% Number of Deals 83 83 0% Prime Rent* in €/sqm/month 6.50 6.50 0% Average Rent in €/sqm/month 5.20 5.20 0%

*achievable top rent in new buildings

Take-up according to Location 6 Submarket Take-up in sqm Share Heilbronn Schwbisch Hall 1 Stuttgart 9,900 6%

2 Ludwigsburg 68,400 40%

81 3 Rems-Murr-District 60,200 35% 2 3 Ludwigsburg 4 Göppingen 1,100 1% Pforzheim

aiblingen 5 Esslingen 24,100 14%

Stuttgart 6 Böblingen 7,700 4% 1 Esslingen am Neckar Calw Gppingen Total 171,400 100%

Bblingen

6 8 4 5

Tübingen 81

Reutlingen

Neu-lm 33

LEASING Industrial S t u tt gar

Take-up Supply and Demand and t | 2019 Logistics The Stuttgart industrial and logistics This dramatic drop in take-up can primar-

market finished out 2019 with roughly ily be attributed to the absence of deals / 2020 Markets 171,400 sqm in take-up, down a consider- for units of over 10,000 sqm, which have able 43% yoy (300,400 sqm). This is the contributed significantly to take-up Overview second-lowest result recorded after results in the past. Only 2 leases were 2014’s dip and reflects a 37% drop com- signed in this segment in 2019 (30%, or |

pared to the 5-year average. Take-up 52,200 sqm) compared to a total of 8 deals Colliers International excluding owner-occupiers came to in the previous year. The small-scale 130,500 sqm, roughly half of the result segment of under 3,000 sqm also posted posted in 2018 (257,000 sqm). The largest a drop in take-up at 23%. Availability is deals signed included the Greenfield scarce at the moment and the limited property development for Daimler in new-build construction activity is unable Waiblingen (42,000 sqm, Rems-Murr- to provide much relief. Demand from the Kreis submarket) and the lease signed by automotive sector and automotive suppli- Daimler subsidiary AMG for roughly ers is also subdued, primarily in response 10,200 sqm in Marbach (Ludwigsburg to uncertainties in the production indus- submarket). try. Take-up generated by the production and manufacturing sector fell from 44% in 2018 to a current 35%. In addition to the development site bottleneck in all submarkets of the Stuttgart logistics region, building permits are subject to extremely long lead times and the lack of skilled workers is tangible. Developers are

Figure 1: Take-up in 1.000 sqm Take-up according to Size Category

Size in sqm Take-up in sqm Share 393.9 400 up to 500 1,200 1%

501 – 1,000 13,300 8% 300.4 1,001 – 3,000 37,300 22% 300 267.6 235.0 3,001 – 5,000 22,300 13% 5,001 – 10,000 45,100 26% 200 171.4 above 10,000 52,200 30%

Total 171,400 100% 100

0 2015 2016 2017 2018 2019

Whole year Average 2015 – 2019 34

beginning to turn to surrounding regions Outlook as a result and are increasingly looking to Despite current fluctuations in automo-

2020 the Rhine-Neckar region and the areas / tive production, demand is expected to along the A8 motorway towards Ulm and remain high in 2020 with no dramatic the A81 south of Herrenberg. We are also t | 2019 impact on the logistics market. We can likely to see more new-build construction gar Colliers Colliers International also expect demand to continue to be | activity along the A7 between the Feucht-

t u tt confronted with extremely limited space S wangen junction and Ulm. A few land available for immediate tenancy, a

Overview sites zoned for logistics are still available situation that is unlikely to change in 2020 in these areas. as the new-build pipeline is practically Markets Markets non-existent at the moment. One of the Rents few developments for the year involves 30,000 sqm east of Stuttgart along Prime rents remained stable both within highway B10 in Plochingen. Due to these Stuttgart city limits and in surrounding limiting conditions, we can expect market Industrial and Logistics districts such as Ludwigsburg, Böblingen activity to keep a pace similar to that and Rems-Murr-Kreis. Prime rents for seen in 2019 and again fall short of the warehouse space larger than 3,000 sqm average posted in recent years. still come to €6.50 per sqm. Average rents have also stabilized at €5.20 per sqm.

FIGURE 2: Take-up by Branch Share in % FIGURE 3: Prime and Average Rents in ¤/sqm

7 Trading Companies 10% 6.50 6.50 6.50

Logistics Service 6.20 6.20 Providers 11% 6 Production & Manufacturing Companies 35%

Others 44% 5 5.20 5.20 5.20

4.80 4.70

4 2015 2016 2017 2018 2019

Prime Rent Average Rent INVESTMENT 35

Transaction Volume Supply and Demand In v est m ent | 2019 Industrial The German industrial and logistics real Portfolio deals accounted for €2.6bn in estate market finished out 2019 with a transaction volume in 2019, or 40% of and satisfactory annual result. Investors annual transaction volume, down 32% yoy. Logistics poured roughly €6.6bn into this asset Apollo Global Management and Palmira class, bringing in the third-strongest Capital Partners sold the Maximus port / 2020 Markets annual result to date since record year folio in Q4, the largest logistics portfolio 2017 (€8.7bn) and 2018 (€6.8bn) despite deal in 2019. Singapore’s sovereign wealth Overview ongoing limited supply. This result also fund (GIC) acquired the pan-European managed to top the 5-year average by logistics portfolio comprising 28 assets |

roughly 19%. Industrial and logistics once before the end of the year. The portfolio Colliers International again proved to be the third strongest as- changed hands for around €950m, €540m set class on the overall commercial real of which was generated by the portfolio’s estate market with a market share of over German assets. Other deals included the 9%. This excellent result can largely be sale of the Blue Chip portfolio comprised attributed to exceptionally lively activity of 3 large distribution centers to GreenOak during the end-of-year rally. Almost the and Apeiron (roughly €350m) as well as same amount of capital was invested the sale of 9 logistics assets to the REIT in Q4 as in Q1 and Q2 combined. And managed by Asian investor Frasers results would have been even higher if (roughly €320m). The deal involving the more product had been available. sale of the Amazon Logistics Center (75,000 sqm) in Dortmund was one of the year’s major and most expensive single- asset deals with a gross yield of just above 4%. Arabian investors sold the asset to Savills Investment Managers for roughly €140m just two years after initial acquisition. Another notable single-asset deal

Figure 1: Transaction Volume Industrial & Logistics Figure 2: Transaction Volume by Property Type in bn € in bn €

7 8,000 0 10 20 30 40 50 Trading Companies 10% 6.50 6.50 6.50 7,000 Oﬃce Logistics Service 6.20 6.20 Providers 6,000 11% Retail 6 Production & 5,000 Manufacturing Companies 35% Industrial & 4,000 Logistics 3,000 Hotel Others 44% 5 5.20 5.20 5.20 2,000 4.80 Building Site 4.70 Commercial 1,000 3,972 4,579 8,662 6,814 6,566 Mixed use 4 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Other properties Prime Rent Average Rent Industrial Logistics TAV in total Transaction Volume Germany 36

was La Française’s acquisition in Sep- assets while foreign investors continued tember of the new Amazon logistics to focus on traditional logistic assets.

2020 center in Mönchengladbach (around / 150,000 sqm) under similar conditions Yields on behalf of South-Korean investors Samsung and KB. High-quality assets featuring long-term Colliers Colliers International | leases and low-risk tenants have become

m ent | 2019 In v est Foreign investors continued to be active quite rare on the German market. Demand

Overview on the German market in 2019, pouring a for logistics space is extremely high at total of around €4.0bn into German logis- the moment and even investors with less

Markets Markets tics and industrial assets. This reflects a experience in this segment have become 60% market share, up 13 percentage increasingly interested. Prices are rising points yoy. Asian investors like Frasers as a result and purchase price multipliers and GIC (Maximus portfolio) accounted for continue to increase. Gross prime yields €1.6bn alone. British investors (roughly were recorded at 4.2% at year-end for

Industrial and Logistics €1.1bn) and US investors (€547m) were latest-generation logistics assets in top particularly active on the German logistics locations featuring a standard lease term market as well. British investor Savills In- of at least 10 years (net yield of roughly vestment Managers acquired the Amazon 3.7%). Gross prime yields fell another Logistics Center in Dortmund as well as 30 bps over the course of 2019 with no 3 DHL transshipment centers in Berlin, end in sight. Leimen and St. Ingbert (Saarland) for around €49m. German investors were less active in 2019 compared to the previous year, accounting for €2.6bn, or 40%, with results down 12 percentage points yoy. The investor group dedicated one third of this transaction volume to light industrial

FIGURE 3: Transaction Volume by Size Category FIGURE 4: Transaction Volume by Buyer / Seller Groups in % in bn €

100 up € 10m 8% 0 1 2 3 4 6.5 Asset Managers/Fund Managers 6.0 € 10m to € 30m 18% Open-ended Real Estate Funds/Special Funds 80 Pension Funds REITs 5.5 60 Corporates/Owner-Occupiers 5.0 Other Investors € 30m to € 50m 11% 40 Asset Managers/Fund Managers 4.5 €50m to € 100m 12% Corporates/Owner-Occupiers 20 above € 100m 51% Property Developers 4.0 Private Investors/Family Oﬃces Open-ended Real Estate Funds/Special Funds 0 3.5 Other Investors 2015 2016 2017 2018 2019 4 15 4 16 4 17 4 18 4 19

Buyer Seller National International 37

Summary and Outlook In v est m ent | 2019 Industrial Prime yield compression is set to continue in light of ongoing negotiations and cur- and rent bidding rounds involving core assets, Logistics and we expect multipliers to exceed 24 × in the next few months. Gross prime yields / 2020 Markets continue to approach the 4% mark. Some owner-occupiers are likely to take advan- Overview tage of these favorable market conditions to sell their assets in the scope of sale- |

and-lease-back transactions, anticipating Colliers International high profit in light of strong demand and intensified competition. Investors will have to adjust their price expectations in order to gain access to coveted assets. Even stock properties are recording multipliers at levels previously typical for new-build core products. The current ups and downs in industrial production do not seem to have had an impact on investment activity around German industrial and logistics assets to date, and investor interest in these assets will remain strong in 2020. Investor sentiment for 2020 is favorable with e-commerce and high consumer spending in Germany pointing to continued growth in demand for logistics space.

FIGURE 5: Share of International Investors FIGURE 6: Prime Yield Performance (Gross Initial Yield) in % Mean value in %

Buyer Seller National International 38 GLOSSARY

Take-up of space Average Rent Take-up of space is the sum of all spaces Average rent refers to multi-functional 2020 / either newly let, or built by an owner- logistics space exceeding 3,000 sqm occupier within the period under consid- (height > 7 m bottom edge, 1–2 docking eration. The salient date is that on gates / 1,000 sqm, low office share). | 2019 ary

Colliers Colliers International which the lease agreement is signed. |

Gloss The renewal of an existing lease is not Prime Yields counted in the take-up of space. Exclu-

Overview Gross prime yield refers to Class-A sively logistics and industrial space properties (latest generation logistics serves as the basis of calculation; Markets Markets properties, max. age of building 10 years, pro-rata office and ancillary space is > 5,000 sqm, height > 10.0 m bottom not taken into account. edge with docking gates, long lease terms) in Germany’s top investment Leasing Performance markets.

Industrial and Logistics Leasing performance reflects take-up excluding owner-occupied space. Exclusively logistics and industrial space serves as the basis of calculation; pro-rata office and ancillary space is not taken into account.

Prime Rent Prime rent refers to latest generation logistics space exceeding 3,000 sqm (min. height 10 m bottom edge, 2–3 docking gates / 1,000 sqm, sprinkler system, office share up to 10%). KONTAKTE / STANDORTE

Berlin Leipzig Budapester Straße 50 Markgrafenstraße 2 10787 Berlin 04109 Leipzig Tel. +49 30 202993-0 Tel. +49 341 2182990-0

Düsseldorf Munich Königsallee 60 C Dachauer Straße 63 (Entrance Grünstraße) 80335 Munich Peter Kunz FRICS 40212 Düsseldorf Tel. +49 89 624294-0 HEAD OF INDUSTRIAL Tel. +49 211 862062-0 & LOGISTICS EMEA Nuremberg [email protected] Frankfurt Am Tullnaupark 15 Thurn-und-Taxis-Platz 6 90402 Nuremberg 60313 Frankfurt am Main Tel. +49 911 462795-0 Tel. +49 69 719192-0 Stuttgart Hamburg Königstraße 5 Burchardstraße 17 70173 Stuttgart 20095 Hamburg Tel. +49 711 22733-0 Tel. +49 40 328701-0

Cologne Susanne Kiese Kaiser-Wilhelm-Ring 15 HEAD OF RESEARCH 50672 Cologne [email protected] Tel. +49 221 986537-0

Nicole Kinne Bildnachweise RESEARCH INDUSTRIAL Front page : Shutterstock, Inc. & LOGISTICS Berlin : Lilopark Großbeeren, Colliers International [email protected] Düsseldorf : istock, baloncici

Frankfurt : Logistics Park near Hanauer Kreuz, Colliers International

Hamburg : Mach 2, FourParx

Cologne : istock, VanderWolf-Images

Leipzig : Baytree Distribution Center Leipzig, Baytree

Munich : Air Tech Campus Oberpfaffenhofen, Beos AG

Stuttgart : Logistics Center Epfendorf, Colliers International CONTACT

RESEARCH Nicole Kinne Associate Director I Research Industrial & Logistics +49 89 624294-792 [email protected]

Copyright © 2020 Colliers International Deutschland GmbH Colliers International This document has been prepared by Colliers International for advertising and general information only. Colliers Inter national makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information Deutschland GmbH including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their Thurn-und-Taxis-Platz 6 own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied 60313 Frankfurt terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Colliers International and/or its licensor(s). © 2020. All rights reserved