MARKET REPORT ON THE LETTING OF LOGISTICS PROPERTIES AND INDUSTRIAL SPACES Greater Munich area for H1 2020 Market report on the letting of logistics properties and industrial spaces in the Greater Munich area for H1 2020 n Only 2.6% below 5-year average despite coro- >> Take-up of logistics property and industrial space in the greater Munich area H1 2020 navirus n Metropolitan region closes half-year at just un- der 100,000 sqm n 80% medium- and long-term leases signed n Letting primarily in existing properties n Only one deal over 10,000 sqm n Forecast: four major deals in the pipeline for H2 n No new projects until 2021/2022 >> Take-up of logistic property and industrial space by regions in the greater Munich area H1 2020 Munich logistics market was relatively unaffected by the coronavirus pandemic in the first half of 2020, with the lack of available space represent- ing more of a decisive factor. All market partici- pants combined accounted for a letting volume of 99,600 sqm in the first six months. This rep- resents a decrease of just 2.6% on the five-year average of 102,260 sqm. While take-up declined by 7% year on year (H1 2019: 106,700 sqm), it is still ranked fourth and is thus ahead of the low area take-up recorded in H1 2018, which came to just 98,000 sqm. Demand for readily available warehouse space picked up considerably in the last three months and owners were very accommodating to ten- in comparison to, for example, the Ruhr region, and region at 18% respectively 17,900 sqm (H1 2019: ants, providing short-term offers and terms of up so normally only one rare property is added to the 11%; 12,100 sqm), the West region at 10,850 sqm to six months. Nonetheless, this is not a long-term market each year. However, up to 35,000 sqm (10.9%) and the East region at 7,550 sqm (7.6%). trend. Overall, medium- and long-term leases ac- of space will come onto the market in the next counted for over 80% of the result for the first few years and will be developed on an approx. half of the year. 80,000 sqm brownfield area in north-east Take-up by size Munich. Almost one third (29,700 sqm) of newly let No major projects were carried out due to the Only one lease was concluded in the 10,000+ sqm space is in the new-build segment, a 9% in- lack of land designation. Despite the shortage segment in the reporting period. This was a lease crease on the previous year (H1 2019: approx. of space, it is becoming more and more difficult brokered by us for 12,560 sqm with Hendricks In- 27,300 sqm). Take-up in the existing properties to persuade municipalities of the designation ternationale Spedition GmbH & Co. KG in Schwaig, segment is 69,000 sqm, down 12% on H1 2019 needed. which accounted for 12.6% of total deals conclud- (79,330 sqm). ed. In the first half of 2020, the three size catego- ries 5,000-9,999 sqm (27.8%; 27,665 sqm), 3,000- Moving forward, revitalising older industrial Take-up by region 4,999 sqm (23.6%; 23,460 sqm) and 1,000-2,999 spaces and retrofitting outdated existing proper- sqm (27.7%; 27,652 sqm) accounted for almost the ties in the Munich metropolitan region will become The north of Munich remains the region with the same share of all deals. The under 1,000 sqm size increasingly important. Brownfield developments highest take-up at 63.5% and warehouse and category is almost on par with the previous year, did not play a role in the period under review as logistics space take-up of 63,300 sqm (H1 2019: contributing 8.3% respectively 8,238 sqm (H1 the market has relatively few older industrial areas 67%; 71,700 sqm). It is followed by the South 2019: 9%; approx. 9,400 sqm). MARKET REPORT ON THE LETTING OF LOGISTICS PROPERTIES AND INDUSTRIAL SPACES // Greater Munich area for H1 2020 Take-up by sector >> Take-up of logistic property and industrial space by size in the greater Munich area H1 2020 In contrast to the previous year (H1 2019: 25%, 26,260 sqm), the logistics/shipping sec- tor tops the ranking in terms of take-up by sec- tor (44.3%, 44,100 sqm). Industry takes second place at 34.7% (34,600 sqm) (H1 2019: 29%; 30,870 sqm), around 66% of which (22,860 sqm) comes from the automotive industry (H1 2019: ≥ 10,000 sqm 5,000 - 9,999 sqm 3,000 - 4,999 sqm 1,000 - 2,999 sqm ≤ 999 sqm 14%; approx. 4,320 sqm). Retail, the sector with the highest take-up in the first half of both 2018 and 2019, came in third place in H1 2020 (approx. >> Take-up of logistic property and industrial space by industry in the greater Munich area H1 2020 16%; around 16,300 sqm). Rental prices H1 2020 Compared to EUR 7.25/sqm at the end of 2019, prime rent has now returned to the level record- ed in H1 2019 of EUR 8.50/sqm. Nonetheless, average rent fell in this half of the year to EUR 6.50/sqm (H1 2019: EUR 6.75/sqm) due to high letting in existing properties as opposed to in new buildings. Forecast for 2020 >> Prime and average rents of logistics property and industrial space in the greater Munich area** H1 2020 Demand remains very high. We are receiving many requests from potential users in logistics, industry and commerce across all sectors. Despite this, there is a lack of adequate space for the city of Munich and the surrounding region. The vacancy rate in Munich remains very low and so investing in commercial property still pays off despite the significant decline in yields. With the exception of occasional, rural regions in the sur- rounding area, it is not necessary to include any substantial vacancies when calculating for the Greater Munich area. prime rents average rents ** New properties in surrounding area We are expecting four larger lettings to be con- cluded in the second half of the year, each repre- >> Major deals in H1 2020 senting 7,500 sqm to 10,000 sqm of warehouse and logistics space. We also have a number of 1. Hendricks Internationale Spedition GmbH & Co. KG, Schwaig, approx. 12,559 sqm (new building) other projects in the pipeline this year for the regions around eastern and western Munich, al- 2. DHL Express Deutschalnd GmbH, Flughafen München, approx. 8,000 sqm (new building) though these will not be completed until the end 3. Maschinenbauunternehmen, Eching, approx. 7,965 sqm (existing building) of 2021 or the start of 2022. Given this, we as- sume that total take-up will be somewhere in the 4. BMW, Garching, approx. 6,700 sqm (existing building) range of just 200,000 to 220,000 sqm by the end 5. Isar Aerospace Technologies GmbH, Ottobrunn, approx. 4,500 sqm (existing building) of 2020, below the five-year average. MARKET REPORT ON THE LETTING OF LOGISTICS PROPERTIES AND INDUSTRIAL SPACES // Greater Munich area for H1 2020 Logistics Property Market Munich: Rental Prices H1 2020 (EUR/sqm) 6.50 - 8.50 A92 6.50 - 7.25 A9 5.50 - 5.95 6.50 - 9.00 Flughafen Industrial and business parks 6.50 - 7.20 A8 Q New properties 6.50 - 9.00 Unterschleißheim Airport region Functional buildings Munich-North Erding Neufahrn Eching Dachau Bergkirchen A92 Garching 5.50 - 7.00 5.85 - 6.75 Karlsfeld Ismaning 5.00 - 5.95 Maisach A99 Olching Munich-West Kirchheim Poing A94 Fürstenfeldbruck A99 Munich Munich-East Gräfelfing 8.95 - 15.00 A94 Feldkirchen Gilching 6.50 - 9.00 Haar 8.95 - 15.00 6.40 - 6.95 A96 5.50 - 8.00 5.50 - 6.20 Ebersberg A96 Gauting Seefeld Moosach Ottobrunn Grünwald Brunnthal A8 Herrsching Munich-South 6.50 - 8.50 6.50 - 6.95 5.00 - 6.00 A95 * Greater Munich market area The Bavarian capital, Munich, ranks among the leading economic centres in international comparison and is characterised by a broad and balanced economic and sector structure. Realogis defines the relevant available warehouse, logistics, industrial and production space within a radius of approximately 50 km around Munich as a submarket. Geographically located in the heart of Europe, Greater Munich has a high-performance transport infrastructure including eight motorways (A8, A9, A92, A94, A95, A96, A995 and A99), an airport, and rail-based freight transport. MARKET REPORT ON THE LETTING OF LOGISTICS PROPERTIES AND INDUSTRIAL SPACES // Greater Munich area for H1 2020 REALOGIS Immobilien REALOGIS – REALOGIS – München GmbH Pioneers in Logistics since 2005 Available to you directly on-site in Munich Rundfunkplatz 4 80335 Munich When Realogis was first established in 2005, we We are your point of contact for the letting of in- phone: +49 (0)89 - 51 55 69 - 0 had an ambitious goal: to become the market dustrial and logistics property as well as business fax: +49 (0)89 - 51 55 69 - 29 leader for property lettings in the “industrial and parks in the Munich region, and have been the e-mail: [email protected] logistics” segment. The concentration and poo- market leader in this segment since 2006. You’re ling of our know-how into this niche market has looking for a certain type of property? We will www.realogis.de proved successful: in 2015 we again gained define the precise details of your requirements, market leadership in Germany for space take-up enhance your search profile and provide you with in industrial properties, warehouses and logistics exact property matches.