MARKET REPORT ON THE LETTING OF LOGISTICS PROPERTIES AND INDUSTRIAL SPACES North Rhine-Westphalia for 2019 Market report on the letting of logistics properties and industrial spaces in North Rhine-Westphalia* for 2019 n Take-up rises by 3% to 1,001,000 sqm >> Take-up of logistics properties and industrial spaces in North Rhine-Westphalia n Increases for the Ruhr region and Düsseldorf, but a decrease by over a third for Cologne n A strong focus on existing properties and a decline in new construction activity, particu- larly of build-to-suit buildings n Land options remain limited n Only two major deals over 50,000 sqm n Retail still has the highest take-up n Logistics service providers conclude longer terms to secure space n Higher demand in specific logistics such as >> Take-up of logistics propertyies and industrial spaces by regions in North Rhine-Westphalia 2019 temperature-controlled logistics n Rent increases of up to 8% n Muted forecast for 2020 We have analysed letting activities on the top industrial and logistics markets of North Rhine-Westphalia (NRW) in the past twelve months. According to this, take-up by all market participants in 2019 totalled 1,001,000 sqm. This is the third-best result in the last five years (2016: 1,502,000 sqm, 2017: 1,144,000 sqm). Although January to December 2019 posted a 3% increase compared with the previous year (971,000 sqm), >> Take-up of logistics properties and industrial spaces by industry in North Rhine-Westphalia 2019 overall take-up was 10% below the five-year av- erage (1,074,200 sqm) due to the exceptional per- formance in 2016. 2019 was the first year in a while when all three sectors were focused on primarily fulfilling their orders in available existing properties. There was little market demand for and construction of built-to-suit logistics properties, which has led to a decline in new construction activity. The annual result is dominated by the Ruhr re- gion, which accounts for more than half of all letting space. At 581,000 sqm of leased industrial and logistics space, the previous year’s period was Retail/E-Commerce Logistics/Distribution Manufacturing Supply/Others beaten by just under 25%. logistics with 390,000 sqm, while production NRW were signed by Edeka (90,000 sqm owner- Retail had the highest take-up in North brought up the rear with 144,500 sqm. In the occupier investment in Oberhausen) and the Rhine-Westphalia in 2019 with a total of around reporting period, the only two large-volume con- textiles wholesaler L-Shop in Unna (total space 420,700 sqm (42%). It was closely followed by tracts in the over 50,000 sqm size segment in 55,000 sqm). > MARKET REPORT ON THE LETTING OF LOGISTICS PROPERTIES AND INDUSTRIAL SPACES // North Rhine-Westphalia for 2019 With the pace of market growth set to slow down in the future, we are already observing a change >> Prime rents of logistics properties and industrial spaces in North Rhine-Westphalia in lease terms. Market participants in this sector are now concluding longer terms in order to se- cure space. In addition, we see a trend reversal among spe- cial logistics service providers, particularly in the field of temperature-controlled contract logistics. Whereas B2B orders from companies such as in- ternational catering and restaurant chains were the main source of business here in the past, there is now also growing demand in the end consumer sector. Changed user behaviour, which is seeing Düsseldorf Cologne Ruhr region food increasingly ordered online, is influencing demand for build-to-suit logistics properties and >> Average rents of logistics properties and industrial spaces in North Rhine-Westphalia their fitting-out with three temperature zones. In the reporting period, average and prime rents in NRW rose by between 1% and 8%. Düsseldorf/Mönchengladbach/Lower Rhine market area After a weak start to the first two quarters, the Düsseldorf/Mönchengladbach/Lower Rhine mar- ket area beat last year’s result by 2.4% on account of a strong second half-year. Take-up last year Düsseldorf Cologne Ruhr region amounted to 261,000 sqm (2018: 255,000 sqm), the fourth-best result in the last five years. This >> Major contracts signed in 2019 in the metropolitan region Düsseldorf figure was 16% below the five-year average (311,200 sqm), mainly due to a weak first quarter. 1. Müller lila Logistik 2. Reuter Bad 3. Dachser Dormagen Mönchengladbach Mönchengladbach Meeting the demand on the Düsseldorf market 39,800 sqm 30,000 sqm (owner-occupier) 21,200 sqm for units in the 1,000 to 5,000 sqm size category is a major challenge. The market is now experi- 4. Meyer Logistics 5. Topregal encing almost full occupancy for business parks. Nettetal Wesel This is significantly curbing the contract comple- 13,900 sqm 10,200 sqm tion rate. If there were space available in this cate- gory, we could let it on a long-term basis to highly >> Take-up of logistics properties and industrial spaces by regions in a year-on-year comparison creditworthy users. in North Rhine-Westphalia 2019 Just under half of all space in the Düsseldorf mar- ket region has been taken up by logistics service providers (49%, around 127,800 sqm), followed by retail with 25% (around 65,700 sqm) and in- dustry with 18% (around 45,900 sqm). The prime rent rose by 3% and currently stands at EUR 5.75/sqm (2018: EUR 5.60/sqm), while the average rent increased by 1% to EUR 4.85/sqm (2018: EUR 4.80/sqm). n 2015 n 2016 n 2017 n 2018 n 2019 MARKET REPORT ON THE LETTING OF LOGISTICS PROPERTIES AND INDUSTRIAL SPACES // North Rhine-Westphalia for 2019 Cologne/Bonn/Aachen market area The Cologne metropolitan region, where space is The prime rent rose sharply by 8% to EUR 5.50/sqm by 5%, and now stands at EUR 4.40/sqm scarce, posted the weakest result in the last five (2018: EUR 5.10/sqm). The average rent increased (2018: EUR 4.20/sqm). years. “As in Düsseldorf, there was a lack of read- ily available space in the 1,000 to 6,000 sqm size >> Major contracts signed in 2019 in the metropolitan region Cologne category, particularly for SMEs with more skilled jobs. 1. Kurt Rothschild 2. Logwin 3. Grieshaber Bedburg Kerpen Pulheim With 159,000 sqm of brokered space, take- 18,100 sqm 18,000 sqm 15,800 sqm up plummeted by 36.7% year-on-year (2018: 4. Hammer Logistik 5. Automotive supplier 251,000 sqm), and is now 22% below the five-year Bedburg Kerpen average (204,800 sqm). As in Düsseldorf, the logis- 12,600 sqm 9,300 sqm tics sector had the highest take-up (54%, around 86,000 sqm), followed by industry (20%, around 31,300 sqm) and retail (18%, around 28,100 sqm). Ruhr region market area The Ruhr region achieved the second-best result careful assessment as to whether the respective urbation, which is home to over 5 million people. in the last five years with take-up of 581,000 sqm. micro location is suitable for desired multi-tenant Logistics (30%; 176,200 sqm) and industry (12%; Compared to the previous year, the market use, as a location for innovation-driven sectors or around 67,300 sqm) took the remaining places. improved its performance by 24.9% (2018: for synchronisation business between manufac- 465,000 sqm), and is now 4% above the five-year turers and suppliers. The prime rent was up by 2% year-on-year to average (558,200 sqm). EUR 5.10/sqm (2018: EUR 5.00/sqm), while the In terms of take-up by sector, retail was the big- average rent remained unchanged from 2018 at In contrast with other regions in NRW, there is gest user (57%; around 326,900 sqm) in this con- EUR 3.95/sqm. still land available in the Ruhr region, and project developers have been the most active in securing >> Major contracts signed in 2019 in the Ruhr region it. As in other NRW markets, there was a fall in demand for built-to-suit solutions here. 1. Edeka 2. L-Shop 3. Euziel Oberhausen Unna Werne However, municipal land options, particularly for 90,000 sqm 55,000 sqm 38,000 sqm tenders, are in short supply. At the same time, 4. Beverage supplier 5. Wabtec/Faiveley 6. Bohnen many municipalities, local authorities and pro- Hünxe Bochum Werne ject developers will have to consider whether the 22,000 sqm 22,000 sqm 17,000 sqm quoted land prices are in a healthy balance with logistics development. In addition, there will be Forecast for full-year 2020 We expect continuing strong demand as space becomes increasingly scarce. As things stand, our cautious forecast is for take-up of 500,000 sqm in the Ruhr region, 170,000 sqm in Cologne and 200,000 sqm in Düsseldorf, which would mean cumulative take-up of less than 900,000 sqm of industrial and logistics space. MARKET REPORT ON THE LETTING OF LOGISTICS PROPERTIES AND INDUSTRIAL SPACES // North Rhine-Westphalia for 2019 North-Rhine Westphalia logistics market area Hamm 2 Friedrichsfeld 31 52 1 2 A73 Soest 2 Herne Venray 42 Dortmund 44 Oberhausen 42 Bochum Essen Hagen Duisburg (Sauerland) 40 Arnsberg A67 57 Venlo 43 Hagen 46 61 Krefeld Sundern 535 (Sauerland) 45 A73 3 46 52 Düsseldorf Lüdenscheid Roermond Mönchengladbach 46 Solingen NORDRHEIN WESTFALEN 1 Wipperfürth Attendorn Dormagen Kirchhundern Heinsberg 57 A2 61 46 Bergisch Gummersbach Olpe 44 Gladbach 4 Bergheim Jülich Cologne Heerlen 3 4 Siegen A79 Alsdorf Neunkirchen-Seelscheid Düren Erftstadt Windeck Aachen Kreuzau 1 Bonn Königswinter Euskirchen Eupen Verviers * North-Rhine Westphalia market area Realogis defines submarkets as the relevant available warehouse, logistics, industrial and production space in the regions Ruhr, Düsseldorf / Mönchengladbach / Lower Rhine and Cologne / Bonn / Aachen.