RESIDENTIAL MARKET FRANKFURTREPORT FRANKFURT AM MAIN - THE METROPOLIS ON THE RIVER MAIN WITH AN INTERNATIONAL FORMAT, A GLOBAL CITY AT THE CENTRE OF EUROPE FRANKFURT AM MAIN A CITY WHICH IS GROWING HORIZONTALLY AND VERTICALLY, INTEGRATING MEETING THE DEMAND FOR LIVING SPACE WITH MODERN CONCEPTS! RESIDENTIAL MARKETREPORTFRANKFURT 3 BOOMTOWN 5,722,000 759,000 2,300,000 Population of the Rhine- Population of Population of Frankfurt FRANKFURT am Main Main metropolitan region Frankfurt am Main am Main and its suburbs The most international city in Germany, the largest financial centre in continental Europe & the fastest growing major city 2019: 759,000 +13.3% +7.1% P O P U L +4.4% A 2035: +2.4% TOP 4 T POPULATION GROWTH IO N FORECAST 2019–2035 (%) GR OWTH 860,000 HAMBURG BERLIN MUNICH FRANKFURT AM MAIN POPULATION GROWTH IN THE FRANKFURT RHINE/MAIN METROPOLITAN REGION FORECAST 6,100 Frankfurt am main IS THE CITY WITH BY FAR THE 5,900 STRONGEST POPULATION GROWTH FORECAST AMONG 5,700 THE TOP 4 IN GERMANY. IN ADDITION, THE RHINE-MAIN thousandsin REGION AS A WHOLE IS ALSO GROWING AT AN ABOVE- 5,500 AVERAGE RATE. 5,300 1999 2003 2007 2011 2015 2019 2023 2027 2031 2035 Source: Oxford Economics, Stadt Frankfurt am Main 4 5 FRANKFURT NO.1 Financial Centre AM MAIN Continental Europe GLOBAL FINANCIAL CENTRE 311 destinations in 97 countries BREXIT-WINNER 70.5 M Approx. 25 applications to Passengers in 2019 BaFin for new banking licences >1,400 NORDRHEIN-WESTFALEN FLIGHTS departures and arrivals daily HESSEN INTERNATIONAL REACH 1 of 30 global gateway cities 5 MOTORWAYS & 6 MAJOR TRUNK ROADS link Frankfurt with SECTOR MIX TALENT BASE the whole of Europe Frankfurt am Main is regarded as the job 27 Universities and other motor of the Rhine-Main area and has by institutions of higher education, far the highest office employment rate in Frankfurt am Main 50 educational facilities with Wiesbaden Germany at over 50%. With about 720,000 over 70,000 students. employees, Frankfurt am Main has the hig- Mainz hest density of jobs in Germany. Aschaffenburg 470,000 passengers daily use Frankfurt main station, Darmstadt THE SECOND BUSIEST RAIL- WAY STATION IN GERMANY 1,003,790 QUALITY OF LIFE SKYLINE RHEINLAND-PFALZ WORKDAY POPULATION Ranked 7th globally Landmark and symbol of the for quality of life* „metropolis on the Main“, GERMANY‘S COMMUTER Germany‘s global city BADEN-WÜRTTEMBERG CAPITAL Net inward commutes +286,500 (2019) Rhine-Main Region Source: Mercer*, Bundesagentur für Arbeit, Oxford Economics, Regionalverband FrankfurtRheinMain, Frankfurt am Main Stadt Frankfurt am Main, Statistisches Bundesamt, IHK Frankfurt am Main 0 5 10 Kilometers 0 5 10 Kilometers Data © OSM CW Research Germany 20 Data © OSM C&W Research Germany 20 6 7 FRANKFURT AM MAIN IS ALSO KNOWN ECONOMIC ENVIRONMENT AS THE MOST COMPACT METROPOLIS IN THE WORLD, CONSTANTLY REINVENTING ITSELF AND DISPLAYING NEW FACETS. FRANKFURT AM MAIN IN COMPARISON (Q3 2020) FRANKFURT AM RHINE-MAIN GERMANY MAIN METROPOLITAN REGION Population in thousands 759 5,722 83,167 Population density in inhabitants per km² 3,030 388 233 Unemployment rate in % 7.5 4.9 6.2 Employed persons contributing to social security 613 2,272 33,648 Services sector in % 90 77 71 €3.436 billion GDP Germany (2019, Q1 2020: €854.57 billion) 0.6% GDP growth Germany (2018 –2019) Purchasing power per head of population €27,449 Frankfurt am Main (2019) 30.0% Proportion of foreign residents Frankfurt am Main (2019) Proportion of international companies 15.7% in Frankfurt am Main (2019) 611,471 Employed persons contributing to social security (2020) Employed persons contributing to social security 89% in the services sector (2019) Source: C&W, Statistische Ämter 8 9 HOUSING SHORTAGE SUSTAINED SHORTAGE OF LIVING SPACE IN FRANKFURT AM MAIN 2019 2030 BUILDING PERMITS 2018 2019 395,000 436,000 7,329 5,829 APARTMENTS APARTMENTS Decline in building permits compared 50,000 100,000 to the previous year due to fluctuations caused by major projects. In 2020, this will APARTMENT SHORTFALL APARTMENT SHORTFALL be higher again due to the approval of the + 50,000 major „FOUR“ project. 0.7%* Near 0% BUILDING COMPLETIONS VACANCY VACANCY 2018 2019 3,519 3,583 Second-highest completions figure of *Source: C&W Research, Stadt Frankfurt am Main, Empirica the last ten years. GROWTH IN NUMBER OF HOUSEHOLDS IN FRANKFURT AM MAIN HOUSEHOLDS HOUSEHOLD STRUCTURE FRANKFURT AM MAIN 2030 500,000 482,000 480,000 + 31% Frankfurt am Main 465,000 At the end of 2019, Frankfurt am Main‘s hou- + 10% Germany 460,000 448,000 sing stock comprised approx. 395,000 apart- 2005–2035 ments which is significantly below current 440,000 430,000 demand. The current shortfall is estimated 420,000 at approx. 50,000 apartments, which is ex- 407,000 pected to double by 2030. The pressure of demand on the housing market in Frankfurt 400,000 am Main continues to be high and no reversal 380,000 369,000 of the trend is expected - the rate of popula- 367,000 Single person 52% tion growth continues to outstrip the rate of 360,000 expansion of the housing stock. The signifi- Two-person 33% cant shortage of residential space is illustra- 340,000 2005 2010 2015 2020 2025 2030 2035 Four or more persons 8% ted by the virtually non-existent vacancy rate (0.7%). In recent years, the residential market Three person 7% in Frankfurt am Main has become one of the Source: Oxford Economics, riwis most expensive in Germany, due to the cons- Ave 1.7 persons per household tantly increasing excess demand for living space. Even newly-listed apartments cannot meet demand, which leads to further increa- THE 31% GROWTH IN THE NUMBER OF HOUSEHOLDS IN FRANKFURT AM MAIN (2005–2035) IS SIGNIFICANTLY HIGHER THAN THE GERMANY-WIDE AVERAGE 10%. 10 11 LIVING IN FRANKFURT AM MAIN NOTHING IS FAR AIRPORT MOTORWAY (A5) MAIN STATION E-Scooter Only 12 minutes Only 5 minutes from Centrally located within the Comprehensive from the city centre the city centre city and centrally within e-scooter coverage, Germany - provides swift currently via 5 providers links to all major cities. GOETHE 5 FRANKFURT UNIVERSITY UNIVERSITY OF APPLIED SCIENCE GRUENEBURGPARK PALMENGARTEN RÖMERBERG & OSTPARK NEUE ALTSTADT (NEW OLD TOWN) ZOO MESSE & ALTE OPER 6 ZEIL SKYLINE PLAZA CBD 7 1 EZC FRANKFURT4 MAIN STATION 2 HAFENPARK MUSEUMSUFER 3 8 THE CITY OF SHORT DISTANCES. IN FRANKFURT AM MAIN EVERYTHING IS NEARBY - BOTH WITHIN 9 THE CITY AND BEYOND, WHETHER TRAVELLING FOR BUSINESS ABROAD, TO OTHER MAJOR STADTWALD GERMAN CITIES OR TO THE NEARBY TAUNUS HILLS 10 AT WEEKENDS. IN NO OTHER GLOBAL CITY ARE JOURNEYS SO SHORT AND CLOSELY INTERWOVEN. 12 13 CAPITAL VALUE GROWTH YEAR MULTIPLE MULTI-FAMILY BUILDING APARTMENT RENT MAXIMUM RENT INITIAL TENANCY MAXIMUM CAPITAL VALUE PER SQ M IN CAPITAL VALUE PER SQ M MAXIMUM (EURO/sq m) (EURO/sq m) RELATION TO THE MAXIMUM RENT ON IN RELATION TO MAXIMUM RELETTING RENT ON INITIAL LETTING 2000 18.00 11.25 12.78 2,430 2,760 2001 18.30 11.25 13.10 2,471 2,877 2002 20.00 12.00 13.80 2,880 3,312 2003 20.00 12.00 13.80 2,880 3,312 2004 19.00 12.10 14.00 2,759 3,192 2005 19.00 12.00 14.00 2,736 3,192 2006 18.00 12.00 14.00 2,592 3,024 2007 18.50 12.00 14.20 2,664 3,152 2008 18.00 12.30 14.50 2,657 3,152 2009 19.00 12.50 15.00 2,850 3,420 2010 19.50 12.80 16.00 2,995 3,744 2011 20.00 14.00 17.00 3,360 4,080 2012 22.00 16.00 17.80 4,224 4,699 2013 23.50 16.80 18.50 4,378 5,217 2014 24.00 17.20 19.20 4,954 5,530 2015 25.00 18.00 20.00 5,400 6,000 2016 26.50 19.00 21.00 6,042 6,678 2017 28.50 20.00 22.00 6,840 7,524 2018 31.00 20.50 22.50 7,626 8,370 2019 33.00 21.20 23.50 8,514 9,306 2000–2019 +15 factors +88% +84% +250% +237% Source: riwis THE RESIDENTIAL INVESTMENT MARKET‘S KEY INDICATORS HAVE BEEN RISING STEEPLY FOR 20 YEARS WITH FURTHER GROWTH EXPECTED IN THE COMING YEARS 14 15 RENT AND PURCHASE PRICE LEVELS APARTMENT RENTS H1 2020 AVERAGE RENTS AT ADMINISTRATIVE DISTRICT LEVEL 30.00 1.200 25.00 1.000 Bad Homburg v.d. Höhe Numbers of offers of Numbers Karben 20.00 800 NIEDER- Oberursel 15.00 ERLENBACH Schöneck 600 NIEDER- €9,72/m² ESCHBACH m/Month €/sq 10.00 €9,84/m² 400 Königstein Kronberg HARHEIM Bad Vilbel KALBACH- 5.00 200 RIEDBERG €9,64/m² €12,25/m² Niederdorfelden 0.00 0 Key Steinbach II East 95%-Quantile NORTH -W- EST CITY-EAST South West BERGEN- Harheim 75%-Quantile €11,18/m² €11,00/m² City-West City-NorthNorth-East ENKHEIM City Centre I North-West Bad Soden Schwalbach City CentreCity III Centre 50%-Quantile €10,56/m² Maintal Bergen-Enkheim Nieder-Eschbach 25%-Quantile Bornheim/Ostend Kalbach-Riedberg Nieder-ErlenbachFrankfurt am Main Eschborn CITY-NORTH 5%-Quantile EAS T €11,97/m² Number of offers €10,43/m² (right axis) Kelkheim Source: Empirica CITY -WEST CITY-CENTRE II Sulzbach €11,28/m² €14,29/m² CITY-CENTRE III AS EXPECTED PRIME RENTS ARE ACHIEVED IN WESTEND; NORDEND AND BORNHEIM.