Facts and Figures Office market Frankfurt am Main Q1 2017 ‘‘To know things well, we must know them in detail.‘‘ Quote from François VI. Duc de La Rochefoucauld If you require any further information, please do not hesitate to contact us. We can put you in touch with our specialists who are always happy to provide you with expert support. We look forward to hearing from you! Dr. Konrad Kanzler Head of Research +49 (0) 69 - 970 505-614 [email protected] Radomir Vasilijevic Head of Office & Retail Letting +49 (0) 69 - 970 505-106 [email protected] Martin Angersbach Head of Business Development Office Germany +49 (0) 69 - 970 505-122 [email protected] Lenny Lemler Co-Head of Investment +49 (0) 69 - 970 505-174 [email protected] Market Environment Population development Frankfurt a. M. The Rhine-Main metropolis Frankfurt Inhabitants 2016: 729,624 am Main also experienced continuous 740,000 population growth during 2016. Ac- 720,000 cording to the Federal Statistical Office, 700,000 the number of inhabitants reached a 680,000 new high of 729,624 by the end of 660,000 2016. The growth was primarily caused 640,000 by an influx of foreign citizens (+1.4 %), 620,000 while the German population increased Source: City of Frankfurt a. M. Frankfurt of City Source: 600,000 2009 2010 2011 2012 2013 2014 2015 2016 by 0.4 %. The unchanged positive economic envi- Purchasing power per capita Germany and Frankfurt a. M. ronment in Frankfurt is reflected by a Purchasing power per capita Germany Purchasing power per capita Frankfurt a. M. further decrease in unemployment. At 30,000 Purchasing power per capita 2017: Germany € 22,239 / Frankfurt € 25,532 6.3 %, the rate of unemployment 25,000 reached its lowest level since the turn of 20,000 the century. This trend has also persist- , Federal, Statistical Office ed during the first few months of 2017. 15,000 As of March 2017, the rate was 10,000 0.4 %-points lower than a year previ- 5,000 : GfK GeoMarkting GmbH ously at 6.2 %. 0 Source 2010 2011 2012 2013 2014 2015 2016 2017 At the same time, the number of em- ployees subject to social insurance Unemployment / employees subject to social insur. contribution contributions also registered a further Employees Frankfurt a. M. thereof tertiary sector increase. According to the latest figures Unemployment rate Germany Unemployment rate Frankfurt a. M. from 30.06.2016, the total number of 600,000 8.5 8.0 employees is 551,231. However, the 500,000 7.5 rate of increase (1.7 %) was slightly 400,000 7.0 EmploymentAgency , below regional (Hesse: 2.0 %) and na- 6.5 300,000 6.0 tional (Germany: 2.0 %) growth rates. In 200,000 5.5 Frankfurt, the service sector registered 5.0 100,000 an above-average increase of 2.0 %. State Statistical OfficeHesse 4.5 : 0 4.0 Source 2010 2011 2012 2013 2014 2015 2016 Mar-17 The positive economic situation also influenced the results of the recent Consumer price index Germany and Hesse business survey carried out by the Frankfurt Chamber of Industry and CPI Germany (base year: 2010) CPI Hesse (base year: 2010) Commerce (IHK) at the start of 2017. 110 CPI February 2017: Germany 108.8 / Hesse 108.4 The percentage of surveyed companies 105 that rated their current situation as good or satisfactory was unchanged 100 from the previous survey at 93 %. 95 90 Federal Statistical Office : 85 Source 2010 2011 2012 2013 2014 2015 2016 Feb-17 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 39.00 39.00 39.20 39.00 39.00 38.00 38.00 40.00 36.50 34.70 36.00 2,000 35.00 30.00 1,960 sqm 1,960 1,950 sqm 1,950 1,500 1,790 sqm 1,790 1,760 sqm 1,760 25.00 21.00 sqm 1,680 1,590 sqm 1,590 20.30 20.50 20.50 20.50 20.50 20.00 19.50 1,520 sqm 1,520 19.30 19.30 19.00 20.00 1,000 17.00 1,340 sqm 1,340 1,316 sqm 1,316 1,251 sqm 1,251 1,246 sqm 1,246 1,194 sqm 1,194 15.00 10.00 500 5.00 210 sqm 210 realestate 97 sqm 97 74 sqm 74 13 sqm 13 505 sqm 505 sqm 547 sqm 510 sqm 350 sqm 472 sqm 427 sqm 515 sqm 452 sqm 369 sqm 394 sqm 541 sqm 125 0 0.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1 2017 : NAI apollo Source 124,500 sqm is the highest first quarter take-up since 2012 The Frankfurt market for office space including Eschborn and Offenbach-Kaiserlei experienced brisk lettings activity in the first quarter of 2017, reflected by a significant increase in the number of deals. The number of contracts increased Y-o-Y by 24.2 % to 164. Total space take-up by tenants and owner-occupiers amounted to 124,500 sqm, and represented the best start to a year since 2012. Compared to the already very good per- formance in the first three months of 2016, the first quarter of 2017 again recorded a slight increase of 4.0 %. Lease contract renewals were of less relevance compared to last year, accounting for take-up of only 13,200 sqm following a period of active market exploration by tenants in the first quarter of 2017. This figure was more than 60 % lower compared to the previous year. Lease contract renewals are not included in overall space take-up figures, however. The very positive development in take-up on the office market was due to a pick-up in small and medium-sized lettings, while there was a complete absence of deals for spaces larger than 10,000 sqm. As a consequence, the “1,000 - 2,500 sqm” segment registered the strongest Y-o-Y growth of 93.1 % to 24,000 sqm. Take-up according to location Q1 2017 Total: 124,500 sqm 27,700 sqm 30,000 45 Deals 25,000 18,400 sqm 18,300 sqm 18,300 sqm 20,000 13 Deals 32 Deals 12 Deals 11,200 sqm 15,000 17 Deals 10,000 7,300 sqm 18 Deals 6,700 sqm 5,300 sqm 4,500 sqm 1 Deal 7 Deals realestate 3 Deals 2,300 sqm 3,100 sqm 5,000 4 Deals 500 sqm 7 Deals 900 sqm 0 sqm 2 Deals 3 Deals 0 Deals : NAI apollo 0 Bankenlage Westend Bahnhofsviertel Stadtmitte Westhafen City West Messe Nordend Bockenheim Eschborn Niederrad (Büro) Mertonviertel OF-Kaiserlei other locations Source Market Data Take-up according to unit size Q1 2017 The biggest deals in the first quarter of Total: 124,500 sqm 50,000 2017 included the lease contract 43,700 sqm 37,300 sqm 45,000 signed by Deutsche Bahn AG for a 138 Deals 6 Deals 40,000 7,200 sqm office unit at 185 Mainzer 35,000 24,000 sqm 30,000 Landstraße and the 6,700 sqm expan- 15 Deals 19,500 sqm 25,000 5 Deals sion by the ECB in the Japan Center. In 20,000 addition, Dentsu Aegis Network Ger- 15,000 realestate 10,000 many GmbH leased approximately 0 sqm 5,000 : NAI apollo 0 Deals 6,700 sqm in the “Hafenbogen” project 0 Source < 1,000 sqm 1,000 - 2,500 sqm 2,501 - 5,000 sqm 5,001 - 10,000 sqm > 10,000 sqm development at 53 Speicherstraße and thereby laid the foundation stone for the last project development in Westhafen. Take-up according to rents Q1 2017 Total: 124,500 sqm* 39,400 sqm 42,200 sqm In terms of the different industries, the 45,000 49 Deals 53 Deals “consulting, marketing and research” 40,000 35,000 sector not only achieved the highest 30,000 take-up volume of 21,100 sqm but also 25,000 registered one of the strongest growth 20,000 16,400 sqm 12,000 sqm 27 Deals rates of 83.7 %. The “construction & 15,000 16 Deals 10,100 sqm realestate 4,400 sqm 4 Deals 10,000 real estate” sector was in second place 15 Deals 5,000 : NAI apollo with a 12.0 % share or 14,900 sqm, 0 Source < €10 €10 < 15 €15 < 20 €20 < 25 €25 < 30 ≥ €30 primarily due to the lease contracts *lettings only, no owner occupiers signed by WeWork and Design Offices. “Banks, financial services & insurances” Take-up according to space quality Q1 2017 had to make do with third place be- cause of the lack of large deals, ac- 17.1 % counting for 14,600 sqm (11.7 % share) Total: 124,500 sqm of overall take-up. superior average The CBD remained the most popular 56.3 % ordinary 26.6 % location for office users, accounting for realestate 74,400 sqm of take-up or a 59.8 % : NAI apollo share. The main location “office cen- Source tres” (“Bürozentren”) benefited from 1,000-sqm-plus deals in Eschborn and again achieved an above-average mar- Take-up according to industry Q1 2017 ket share of 17.8 % or 22,200 sqm of take-up.