Market survey Commercial | Industrial, Warehouse, Logistics 2019/Q1–4 Hamburg and Environs Hamburg | Sylt | Berlin Commercial | Industrial, Warehouse, Logistics Hamburg and Environs 2019/Q1–4 Key Facts Industrial, Warehouse, Logistics 355,000 m² | -24 % year-on-year 15 % | -5.0 pp year-on-year €6.30/m² | +5.0 % year-on-year €5.10/m² | +2.0 % year-on-year 4.3 % | -0.3 pp year-on-year pp = percentage point Take-up of space Share of owner-occupiers Premium rent mth (net) Average rent mth (net) (Net) Prime yield “All three agreements for over 10,000 square metres were for 11,400 m² in Kaltenkirchen (North West Environs). In the concluded in the fourth quarter. For the first time in many biggest owner-occupier transaction of the year, construction years, this size category did not comprise the biggest share work started on the new head office for WISKA Hoppmann, a of take-up.” shipbuilding & industrial supplier, on Grashofstrasse in Kalten- Felix Krumreich | Consultant for Industrial, Warehouse, Logistics kirchen. The 1st building phase will deliver some 8,800 m² of logistics and manufacturing facilities and 1,200 m² of office space. Take-up of space Accounting for some 62 % of take-up (219,800 m²) the focus of Three large transactions in the last quarter activity in 2019 remained within Hamburg city limits (2018: 61 %). The highest take-up of space was also noted in a Hamburg Following a sluggish 1st quarter and strong 2nd quarter, the sub-market. Hamburg South retained the top-ranking position market for industrial, warehouse and logistics premises in Hamburg and its environs closed the year with take-up of 355,000 m². The 4th quarter of the year was the busiest, with take-up of space reaching 109,000 m². Gradual growth Take-up of space thus proved to be a stable trend during 2019. Despite this, 2015-2019/Q1–4 | in 000s m² | incl. owner-occupiers for the first time since 2009 take-up of space dipped below 400,000 m² and, compared with 2018, plummeted by 24 %. Owner-occupiers accounted for a share of 15 %, which trans- 10-year average (2010–2019): lates into a year-on-year slide of 5 percentage points. 116 agree- ca. 534,300 m² ments were noted in 2019, 12 fewer than in the prior year 2018. Three new rental agreements for more than 10,000 m² of space played a crucial role in producing the good 4th-quarter Forecast result. ULD United Logistics & Distribution concluded the largest rental agreement of the quarter and of the year 2019, taking 29,100 m² of space at Dradenaustrasse 20, Waltershof (Hamburg South). Two other logistics firms signed leases for 665 450 470 355 350 large premises in new-build districts in the 4th quarter; one 2016 2017 2018 2019 2020 for 12,100 m² in Bad Oldesloe (North East environs) and one Source: Grossmann & Berger GmbH www.grossmann-berger.de | Page 2 Commercial | Industrial, Warehouse, Logistics Hamburg and Environs 2019/Q1–4 Selected top contracts 2018/Q1–4 1. ULD United Logistics & Distribution | Dradenaustrasse 20 | Hamburg | ca. 29,100 m² 2. Logistics company | Teichkoppel | Bad Oldesloe | ca. 12,100 m² 3. Logistics company | Kirchenweg | Kaltenkirchen | ca. 11,400 m² 4. Nutwork Handelsgesellschaft | Vollhöfner Weiden 17 (high-bay storage) | Hamburg | ca. 9,800 m² 5. Hertling Hamburg | Rögen 19 | Bad Oldesloe | ca. 9,000 m² 6. WISKA Hoppmann | Grashofstrasse | Kaltenkirchen | ca. 8,800 m² 7. Trans Service Team | Neuhöfer Brückenstrasse 8 | Hamburg | ca. 8,700 m² 8. Airbus (expansion) | “Goodman Interlink Hamburg”, Am Genter Ufer 9 | Hamburg | ca. 8,500 m² 9. Durstexpress | Hörgensweg 6 | Hamburg | ca. 8,400 m² 10. TCO Transcargo | Schmidts Breite 15 | Hamburg | ca. 8,400 m² Take-up of space achieved in the prior year by posting 34 % of total take-up 2019/Q1–4 | in 000s m² | by size and no. of lettings (120,000 m²). Nine of the 20 agreements for more than 5,001 m² related to properties in this sub-market. Apart from Take-up of space the previously mentioned ULD United Logistics & Distribution, No. of lettings other companies selecting premises in Hamburg South included Nutwork Handelsgesellschaft, which rented some 9,800 m² in the 1st quarter (Vollhöfner Weiden 17, Altenwerder) and in the 3rd quarter Trans Service Team took about 8,700 m² (Neuhöfer Brückenstrasse 8, Wilhelmsburg) and TCO Transcargo around 8,400 m² (Schmidts Breite 15, Wilhelmsburg). Posting take-up of 58,600 m² (17 %) the North West environs took second place, with most of the rentals in Kaltenkirchen and Norderstedt. With a share of 14 % (48,600 m²) Hamburg East ranked third; 33 17 3 40 23 here attention focussed on Billbrook and Rothenburgsort. 6% 19% 25% 35% 15% 22 69 88 124 53 The 5,001 to 10,000 m² segment of the market made up 35 % up to up to up to up to over of the total (124,200 m²), ahead of the 3,001 to 5,000 m² size 1,000 3,000 5,000 10,000 10,001 category with a share of 25 % (87,800 m²). Leases for premises Source: Grossmann & Berger GmbH larger than 10,001 m² totalled 52,600 m², a share of 15 % and thus only the fourth-highest of the year (2018: 38 %) and behind the 1,001 to 3,000 m² size category which returned a share of 19% (68,700 m²). Instead of the nine agreements for large Take-up of space amounts of space seen in 2018, only three were noted in 2019, 2019/Q1–4 | by industry all signed in the 4th quarter. The strongest sector, logistics/communications/forwarding, Other returned a very similar year-on-year result, moving from 55 % 5% to 57 % (203,700 m²) of the total. 42 % of all agreements were signed by logistics or forwarding companies. One noteworthy Trade 18% 4th-quarter agreement, apart from the top 3 already named, was signed by LCH Logistik Centrum Hamburg Hinderer for 5,000 m² (Wilhelm-Iwan-Ring 9-11, Hamburg East). Two-figure percentage shares were also noted for the manufacturing/ 57% Logistics Production/ industry/crafts & trades sector with 20 % (72,400 m²) and industry/ trades+crafts 20% wholesale/retail firms with 18 % of the total (64,300 m²). Agree- ments in the latter sector included one signed by fabfab for about 6,000 m² at Osterbrooksweg 35-45 in Schenefeld (North West environs). Source: Grossmann & Berger GmbH www.grossmann-berger.de | Page 3 Commercial | Industrial, Warehouse, Logistics Hamburg and Environs 2019/Q1–4 Rents Rise to record heights Because demand currently outstrips supply, both average and Take-up of space premium rents rose to new highs. The premium rent posted 2019/Q1–4 | in 000s m² | by rent and no. of lettings a significant rise of 5.0 % to reach a new record of €6.30/m²/ month. Average rents increased by 2.0 % to €5.10/m²/month, Take-up of space likewise a figure never before seen in Hamburg or its environs. No. of lettings In 43 % of contracts (49 leases) signed in 2019 the agreed rents were in excess of €5.51/m²/month and in 22 of these, rates were actually over €6.00/m²/month. At the end of 2019 42 % of take-up involved properties renting for more than €5.51/m²/ month. Investment 4 12 15 4 49 21 11 3% 5% Contracting yields 13% 13% 11 42% 15% 10% 16 45 46 149 53 35 Demand for properties as an investment, including industrial, up to up to up to up to over Owner- n/a warehouse or logistics real estate, is strong and unabated. €4.00 €4.50 €5.00 €5.50 €5.50 occup. However, there is a shortage of available properties in this sector Source: Grossmann & Berger GmbH of the Hamburg market too, so that the volume of transactions fell year on year by 62 % (€274m) to €104m. Overall, 14 sales of industrial, warehousing or logistics properties accounted for Premium and average rent only 2 % of the total volume traded on the Hamburg market 2015–2019/Q4 | in €/m²/mth (net) (2018: 5 %, 27 transactions). The biggest transaction of 2019 was the 3rd-quarter sale of the logistics park at Bargkoppelweg 6.30 6.00 52-66a (Hamburg East), for which a Hamburg investor paid DIC 5.70 5.80 5.80 some €33m. Unlike the prior year, only one portfolio containing Hamburg property was sold in 2019. Barings and the core-plus Premium rent fund CCP 5 LL managed by Tristan purchased the Nagel re- 5.10 frigeration logistics portfolio containing 34 cold storage ware- 4.90 5.00 4.80 4.80 houses, one of which is in Hamburg (Hans-Duncker-Strasse 12). Average rent The mismatch between supply and demand squeezed the prime yield on logistics properties from 4.50 % in the prior year to its current 4.25 %. 2015 2016 2017 2018 2019 Source: Grossmann & Berger GmbH Outlook Modest amounts of space will become available Prime yields Current clients will find that their choice of warehouse, pro- 2015–2019/Q4 | (Net) initial yield | in % duction or logistics halls is as limited in 2020 as it was before. A combination of very little space being vacated in the short term and a shortage of speculative new building due to the lack of 5.40 Industrial/logistics land for development suggests that take-up of space will be 4.90 below the 10-year average. It will probably settle at around 4.60 4.50 Office 4.25 350,000 m² and thus be little changed from 2019.