GERMANY CITY SURVEY - Colliers International

GERMANY

CITY SURVEYOFFICE AND INVESTMENT MARKETS – AN OVERVIEW

2019 / 2020

https://www.colliers.de/

The title of the preface to last year’s City

Survey “Boom continues” has proven

accurate. Following 2018’s all-time high

in transaction volume and the ongoing

boom on the leasing market, a similar

annual result appeared realistic even in

early 2019. However, it was impossible to

anticipate the extraordinary pace of mar-

ket activity at year-end. Much to the sur-

prise of market participants, not to men-

tion our own, we ended up having to make

a significant upward adjustment to our

prediction from early last year that “a

more lively investment environment is

difficult to imagine.”

With new highs and record results every

year, we are seeing entirely new stand-

ards being set in terms of annual results

and the long-term averages that serve as

a reference have increased significantly.

Take-up results over the past five years

have averaged at around 4 million sqm

and three cities have recorded prime rents

that are either approaching €40 per sqm

or have already surpassed this threshold

by a significant margin. Transaction vol-

umes of €60bn are becoming the new

standard and the weighted average of

gross prime yields in the office segment

across the Big 7 fell below the 3% mark to

2.98% by the end of 2019.

Both German and foreign investors con-

tinue to set their sights on German real

estate and are increasingly viewing the

country with its seven highly liquid, diver-

sified investment hubs as an alternative to

Greater London and Paris. The circle of

foreign investors active in Germany con-

tinues to expand thanks to the ECB’s

ongoing zero-interest policy, which will

continue under new president Christine

Lagarde, and the affordable financing

conditions that go with it hand-in-hand as

well as advantageous hedging costs for

investors from non-EU countries. An

increasing number of market players are

getting involved in the competition for

scarce supply. Germany’s political and

economic stability despite the current

growth slump in a challenging global

environment continues to be a decisive

argument for investors.

Real estate continues to offer very inter-

esting investment opportunities even in

the current market conditions. We would

be happy to use our unique market exper-

tise to help you reach and even surpass

your investment goals.

Matthias Leube MRICSCHIEF EXECUTIVE OFFICER

[email protected]

NEW DIMENSIONS

3CONTENTS

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olliers International

Market Data 4

Commercial Real Estate Market GermanyOffice Leasing 6Investment 9Retail Investment 12Industrial and Logistics Investment 15Hotel Investment 18

City Reports

BerlinOffice Leasing 23Investment 25

DüsseldorfOffice Leasing 29Investment 31

FrankfurtOffice Leasing 35Investment 37

HamburgOffice Leasing 41Investment 43

CologneOffice Leasing 47Investment 49

MunichOffice Leasing 53Investment 55

StuttgartOffice Leasing 59Investment 61

Research Services 64

Glossary 66

Contacts /Locations 67

CONTENTS

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Office LeasingTOP 7 Berlin Düsseldorf Frankfurt Hamburg Cologne Munich Stuttgart

Stock of Office Space in million sqm 92.26 20.50 7.75 11.56 13.85 7.91 22.66 8.03

Office Space Take-up 2019 in sqm 3,948,400 1,030,000 475,000 550,500 535,400 275,000 770,400 312,100

Change year-on-year in % 4.0 30.2 40.5 – 10.9 – 5.1 – 5.2 – 21.3 44.4

Forecast for 2020

Office Space Take-up in sqm Average 2009 –2018

3,293,700 693,700 314,700 486,100 510,900 291,600 738,400 258,300

Prime Rent in € / sqm 39.90 28.50 45.50 29.00 25.50 39.50 24.00

Forecast for 2020

Average Rent in € / sqm 26.30 17.30 21.30 17.30 15.20 20.10 16.60

Forecast for 2020

Vacant Office Space in sqm 2,652,800 246,000 454,500 793,600 344,700 175,000 489,400 149,600

Vacancy Rate in % 2.9 1.2 5.9 6.9 2.5 2.2 2.2 1.9

Change year-on-year in bp* – 20 – 30 – 50 10 – 110 – 60 40 – 40

Forecast for 2020

The data for Berlin, Düsseldorf, Hamburg and Cologne are related to the respective city area. The data for Frankfurt, Munich and Stuttgart are related to each of the respective markets on the whole.* basis points

InvestmentGermany TOP 7 Berlin Düsseldorf Frankfurt Hamburg Cologne Munich Stuttgart

Transaction Volume 2019 in million € 71,630 40,047 12,172 3,840 7,843 4,293 3,240 10,904 1,755

Change year-on-year in % 18.2 21.3 74.9 12.3 – 18.8 – 24.2 74.2 67.0 – 20.4

Forecast for 2020

Transaction Volume in million € Average 2009 – 2018

37,500 20,960 4,566 1,832 4,512 3,190 1,236 4,504 1,120

Prime Yield Offices in % 2.90 3.30 3.00 3.20 3.30 2.75 3.30

Prime Yield High Street Retail in % 3.10 3.20 2.80 3.30 3.30 2.75 3.30

Prime Yield Industrial & Logistics in % 4.20 **

** Refers to the defined logistics market areas

MARKET DATA

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OFFICE LEASING 6INVESTMENT 9RETAIL INVESTMENT 12INDUSTRIAL AND LOGISTICS INVESTMENT 15HOTEL INVESTMENT 18

COMMERCIAL REAL ESTATE MARKET GERMANY

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Take-up

The German office leasing market once

again recorded a strong annual result with

some markets posting new all-time highs.

The country’s Big 7 office markets regis-

tered 3.9 million sqm in take-up in 2019, up

4% yoy. This result is the second-best

ever recorded and exceeds the 10-year

average by 20%.

The Berlin office market posted a record

result with 1.0 million sqm, up 30% yoy.

This is the first time that the German capi-

tal has surpassed the 1-million-sqm mark.

Munich came in second with 770,400 sqm,

down 21% compared to a strong 2018.

Tenants proved hesitant due to the eco-

nomic slowdown, particularly in the

second half of the year.

Frankfurt took 3rd place in the ranks with

550,500 sqm, exceeding the 10-year aver-

age by 13%. However, Frankfurt’s annual

result was still 11% shy of previous-year

results due to a lack of major deals. Ham-

burg experienced a similar trend with

535,400 sqm in take-up, surpassing the

10-year average by 5%.

Large-scale transactions helped Düssel-

dorf achieve a new all-time high of

475,000 sqm. This reflects a 41% yoy

increase and an impressive 51% above the

10-year average. Stuttgart managed to top

previous year results by 44% with take-up

of 312,100 sqm. This marks the second

time Stuttgart has managed to break

through the 300,000-sqm barrier.

Cologne finished up the year with 275,000

sqm in take-up, down 5% yoy due to a par-

ticularly severe shortage in supply.

Fast Facts

Office Leasing TOP 7 2019 Change year-on-year

Office Space Take-up in sqm 3,948,400 4.0%

Vacant Floor Space in sqm 2,652,800 – 8.1%

Vacancy Rate in % 2.9 – 20 bp*

Office Space Stock in million sqm 92.26 0.8%

* basis points

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

202020192018201720162015

3.9 3.94.2

3.53.8

3.5

Average 2015 – 2019

Whole year Forecast

OFFICE LEaSING

Figure 1: Office Space Take-up in the TOP 7 in million sqm

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rents

Average rents showed continued strong

growth this past year with many of the

country’s Big 7 cities recording an

increase in prime rents. Frankfurt

claimed pole position with €45.50 per

sqm, followed by Berlin and Munich.

These two cities swapped places during

2019, coming in below the €40 threshold

at year-end with €39.90 per sqm and

€39.50 per sqm, respectively. Berlin

posted an increase of 13% and Munich

reported a 10% increase. Hamburg and

Düsseldorf both came in just shy of the

€30 mark with prime rents at €29.00 per

sqm and €28.50 per sqm, respectively.

Cologne (€25.50 per sqm) and Stuttgart

(€24.00 per sqm) brought up the pack.

Average rents also reached new heights

in 2019, up 21% to €26.30 per sqm in Ber-

lin. Stuttgart was the only market to expe-

rience similar activity with average rents

up 19% to €16.60 per sqm. In absolute

terms, Frankfurt and Munich followed in

the ranks with €21.30 per sqm and €20.10

per sqm, respectively. Hamburg and Düs-

seldorf came in neck-and-neck with

€17.30 per sqm, the former registering

steeper growth (10%) than the latter (7%).

Average rents in Cologne were up 10% to

€15.20 per sqm.

Supply and Vacancy

Vacancy continued to drop in 2019, albeit

at a slower pace. Vacancy in many of Ger-

many’s Big 7 markets is currently limited

to outdated, barely marketable office

space and has begun to bottom out. The

Big 7 have seen a drop in vacancy to less

than 2.7 million sqm, reflecting a

decrease of 20 bps to a current 2.9%.

Berlin recorded the lowest vacancy rate at

1.2% followed by Stuttgart (1.9%) and

Cologne (2.2%). Absolute vacancy in all

three cities dropped by more than 20% in

2019. Munich’s vacancy rate experienced a

slight increase to 2.2%. However, scarce

supply continues to dominate the market.

The vacancy rate in Cologne matched

Munich’s results. Hamburg followed in the

ranks at 2.5% with vacancy down 110 bps.

Düsseldorf fell below the 6% mark at 5.9%

0

500

1,000

1,500

2,000

2,500

2021202020192018201720162015

1,508

1,121

842 939770

843

1,226

2,0562,261

Average 2015 – 2019Pre-letCompletions

0

1

2

3

4

5

6

20192018201720162015

5.6 %

4.9 %

4.1 %

3.1 %2.9 %

5.0

4.4

3.7

2.92.7

Vacancy RateVacancy

Figure 2: Completions of Office Properties in the TOP 7 in total in 1,000 sqm

Figure 3: Vacancy Rate in the TOP 7 in % and Vacancy in million sqm





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due to strong leasing activity, while Frank-

furt exceeded the same mark, coming in

1% higher at 6.9%. Large-scale space

available for immediate tenancy in the city

outskirts is keeping vacancy rates stable

for the moment.

Over 1.2 million sqm of new office space

hit Germany’s Big 7 markets in 2019, up

46% compared to the previous year

(0.8 million sqm). At the moment, 4.3 mil-

lion sqm is scheduled for completion by

2021 with Berlin and Munich experi encing

particularly high construction activity.

Property developments were a significant

source of supply serving the high demand

in many of the Big 7 markets. Property

developments accounted for 40% of leas-

ing activity in Germany’s office hubs. As

such, pre-leasing rates remain high. 92%

of the space completed in 2019 was leased

by year-end and 73% of space currently

under construction has already been

leased as of early 2020. Markets continue

to quickly absorb new space.

Summary and Outlook

Our forecast for 2020 assumes that office

leasing markets will remain mostly unaf-

fected by external risks such as Brexit

and trade conflicts thanks to more robust

economic growth and ongoing record

employment. Although we do expect to

see lower demand in certain locations and

sectors, this will only have an impact on

take-up results and not on rent levels. In

view of these factors and the well-stocked

development pipeline, we expect 2020

take-up to come in at up to 3.5 million sqm.

In any case, 2020 results are sure to exceed

the 10-year average of 3.3 million sqm.

0

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10

15

Q4 19Q4 18Q4 17Q4 16Q4 15

Cologne StuttgartMunich

HamburgFrankfurtDüsseldorfBerlin

10

12

14

16

18

20

22

24

26

28

Q4 19Q4 18Q4 17Q4 16Q4 15



Marc SteinkeConsultant | Research & GIS

+49 211 862062-40

[email protected]

Figure 4: Vacancy Rate in the TOP 7 in % Figure 5: Average Rents in the TOP 7 in €/sqm

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Transaction Volume

Commercial assets changed hands for

€71.6bn in 2019, marking a sensational

18% increase from 2018’s all-time high,

which topped the €60bn mark for the first

time. Q4 2019 was by far the strongest

performing quarter to date at €28.1bn,

reflecting 39% of total annual transaction

volume.

Compared to the overall market, invest-

ment volume in the Big 7 saw even more

dynamic growth, up 21% to an all-time

high of €44.0bn. Berlin and Munich were

the first investment hubs to exceed €10bn

in terms of annual take-up. Düsseldorf

and Cologne also recorded new record

results while the other Big 7 cities signifi-

cantly exceeded their long-term averages.

Supply and Demand

The increase in transaction volume can be

attributed to a high number of large-scale

landmark deals. A total of 49 assets with a

volume of more than €250m changed

hands over the course of the year. The

transaction volume generated by transac-

tions of this size came to €27.0bn, claim-

ing 38% of total annual transaction volume

alone. That represents an increase of

11 percentage points compared to 2018,

which was also characterized by an

explosion of landmark deals. The largest

deal signed was US investment firm

Blackstone’s acquisition of the commer-

cial assets held by Canadian REIT Dream

Global. This deal alone involved more than

100 German office and logistics proper-

ties and accounted for a volume of roughly

€3.1bn. THE SQUAIRE at Frankfurt Air-

port and Tucherpark office campus in

Munich went for around €1bn each.

Fast Facts

Investment 2019 2018 Veränderung

Transaction Volume in million € 71,630 60,593 18.2%

Total Top 7 44,047 36,305 21.3%

Type of transaction

Individual Transactions 50,576 43,003 17.6%

Share in the TOP 7 34,908 29,978 16.4%

Portfolio Transactions 21,053 17,590 19.7%

Share in the TOP 7 9,140 6,327 44.5%

Source of capital

Share by International Buyers 30,436 24,116 26.2%

Share in the TOP 7 19,841 15,104 31.4%

Share by International Sellers 30,526 20,997 45.4%

Share in the TOP 7 20,356 13,010 56.5%

0

10

20

30

40

50

60

70

80

202020192018201720162015

thereof O�ce PropertiesForecastAverage 2015 – 2019

Transaction Volume in Germany

24.6 24.9 26.730.9

40.5

55.452.6

57.360.6

71.6

60.0

Figure 1: Total and Office Transaction Volume in Germany in billion €

INVESTMENT





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In addition to single-asset and portfolio

deals, H2 also saw a number of minority-

share investments in companies holding

large property portfolios or in their

respective portfolios. Private equity

investment firm Madison and investment

firm FFP owned by Peugeot, for example,

each purchased 5% shares in Austrian

property company Signa. Commerz Real

acquired a 20% share in 10 Kaufhof

department stores owned by Signa. TLG’s

acquisition of a 13% share in Aroundtown

laid the foundation for the full merger of

the two companies. This type of real estate

investment has managed to make its mark

with a transaction volume of roughly €2.8bn

and will become increasingly important

under the current high pressure to invest

combined with limited supply.

These minority-share investments boost-

ed the transaction volume generated by

portfolio deals to €21.1bn over the course

of the year, again reflecting a 29% share

in total transaction volume. The focus on

single-asset deals that we saw in 2018

generally continued into 2019 with invest-

ment volume up to €50.6bn.

Foreign investors were particularly able

to beat out the domestic competition

when it came to the year’s mega deals.

Even though the total share of foreign

capital involved in 2019 market activity

was down yoy by 5 percentage points

to €23.7bn, or 40%, foreign investor par-

ticipation in mega deals accounted for

53% of transaction volume, a significant

climb yoy.

Asset/fund managers once again domi-

nated the market buy-side with a market

share of 24%. Open-ended real estate

funds and special funds took 2nd place

with 22%, benefiting from their access to

particularly high liquidity. Property

de velopers reclaimed their sell-side pole

position from previous years and posted a

23% market share. Their significance as a

source of product was particularly appar-

ent in Berlin (41% market share), Hamburg

(30%) and Munich (23%). Asset/fund

managers trailed at some distance with

2nd place in the nation-wide ranking and

an average market share of 14%.

SellersBuyers SellersBuyers

0 10 20 30

Other Investors

Property Developers

Opportunity Funds/Private Equity Funds

Listed Property Companies

Open-ended Real Estate Funds/Special Funds

Asset Managers/Fund Managers

Other Investors

Corporates/Owner-occupiers




Property Developers

up to € 10 m 5%€ 10 m to € 25 m 10%€ 25 m to € 50 m 12%

above € 250 m 37%

€ 50 m to € 100 m 16%

€ 100 m to € 250 m 20%


0 10 20 30

Other Investors

Property Developers





Other Investors





Property Developers

up to € 10 m 5%€ 10 m to € 25 m 10%€ 25 m to € 50 m 12%

above € 250 m 37%

€ 50 m to € 100 m 16%

€ 100 m to € 250 m 20%

Figure 2: Transaction Volume by Size Category 2019 share in %

Figure 3: Buyer and Seller Groups in Germany in billion €

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yields

The ongoing momentum on the invest-

ment market continues to put pressure on

yields. Gross prime yields continued to

drop in 2019, particularly in the office seg-

ments of Germany’s Big 7, with prime

locations in Cologne down 45 bps, Frank-

furt down 30 bps, Munich down 25 bps,

Berlin and Düsseldorf both down 20 bps

and Stuttgart down 10 bps. In December

2019 yields were recorded within a very

narrow range of between 2.75% in Munich

and 3.30% in Düsseldorf, Cologne and

Stuttgart. Prime yield compression for

high street properties in Germany’s top 7

cities appears to be over for the most

part. Gross initial yields for office build-

ings and office-retail mix assets in Munich,

Cologne and Stuttgart are stabilizing as a

result.

Office Investment

Fueled by major deals, the office segment

was able to considerably expand its posi-

tion as 2019’s most popular asset class.

Investors poured €40.5bn into office

assets over the past 12 months, boosting

market share to 57% in total, up to 62% for

single-asset deals and to an above-aver-

age 44% for portfolio transactions.

Summary and Outlook

The boom phase is set to continue in 2020.

Billion-euro deals like Metro’s sale of over

80 Real hypermarkets and Aroundtown’s

acquisition of the TLG portfolio have

already been announced for early 2020.

Rapid resale of portfolio acquisitions

recorded in the past two years will consist-

ently bring product to the market, primarily

in the country’s highly liquid Big 7, but also

increasingly outside the top locations in

those cities. Portfolio managers are also

taking advantage of this high-priced phase

to clean out their portfolios, meeting with a

stronger risk appetite on the part of inves-

tors. Historically low financing costs, neg-

ative interest rates on cash reserves and

low-risk government bonds will continue to

drive momentum on the market going for-

ward. Based on these favorable overall

conditions, we consider transaction vol-

ume in the realm of €60bn realistic for

2020 as well.

thereof TOP 7Transaction Volume Germany

0 10 20 30 40 50

Otherproperties

Building SiteCommerical

Mixed use

Hotel

Industrial& Logistics

Retail

O�ce

2.5

3.0

3.5

4.0

4.5

5.0

5.5

Q4 19Q4 18Q4 17Q4 16Q4 15


HamburgFrankfurtDüsseldorfBerlinthereof TOP 7Transaction Volume Germany

0 10 20 30 40 50

Otherproperties

Building SiteCommerical

Mixed use

Hotel

Industrial& Logistics

Retail

O�ce

2.5

3.0

3.5

4.0

4.5

5.0

5.5

Q4 19Q4 18Q4 17Q4 16Q4 15



Susanne KieseHead of Research

+49 211 862062-47

[email protected]

Figure 4: Transaction Volume by Type of Property in billion €

Figure 5: Office Prime Yield in the TOP 7 in %





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Transaction Volume

German retail assets changed hands for

€10.1bn in 2019, up slightly yoy. Following

2015’s all-time high and 2017’s impressive

result, this is the third time over the past

decade that transaction volume has sur-

passed the €10bn mark. Although the

retail sector was exempt from the impres-

sive end-of-year rally, which particularly

boosted record activity in the office seg-

ment in 2019, it once again proved the

second-strongest asset class on the mar-

ket as a whole with a market share of 14%.

Retail and office were the only two asset

classes to achieve double-digit results.

Supply and Demand

Investor interest in German retail assets

remained high despite fundamental struc-

tural changes in the retail sector. This can

be attributed to extremely robust general

conditions in Germany driven by a strong,

crisis-resistant domestic economy over

the past few years and high consumer

spending. The German investment market

is at the same time characterized by a

variety of asset types and diversity of

locations, which allows for a highly selec-

tive capital allocation approach. Foreign

investors find this particularly attractive,

and they accounted for €4.0bn, or 39%, of

retail investments in 2019. Austrian inves-

tors (15% market share) were by far the

most active, mainly due to the largest deal

of the year valued at over €1bn, in which

listed Austrian property company Signa

completed the purchase of all of the Kauf-

hof department stores in Germany,

acquiring the last 49.9%.

The share claimed by portfolio deals

increased 2 percentage points to 57%

over the past 12 months. This includes

minority-share investments in companies

holding large property portfolios, a trend

that had an impact on the market in 2019.

As such, the market share claimed by

portfolio deals is almost double the aver-

age across all asset types (29%) and

reflects a transaction volume of €5.8bn.

Fast Facts

Investment 2019 2018

Transaction Volume in million € 10,122 9,793

Portfolio Transactions 57% 55%

TOP 7 33% 33%

Share by International Buyers 39% 44%

Share by International Sellers 53% 52%

Prime Yield High Street Retail 2.75% 2.75%

0

2

4

6

8

10

12

14

16

20192018201720162015Average 2015 – 2019Whole year

15.9

9.2

11.9

9.8 10.1

Figure 1: Transaction Volume Retail in billion €

rETaIL INVESTMENT

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Open-ended real estate funds and special

funds were the most active investor group

buy-side, accounting for an investment

volume of €3.2bn (32%). They came in

ahead of listed property companies

(20%), which kept the overall market lead-

er, asset/fund managers (9%), at a signifi-

cant distance in 3rd place. Listed property

companies claimed pole position sell-side

(19%) thanks to the above-mentioned

minority investments, followed by oppor-

tunity and private equity funds (17%) and

asset/fund managers (16%).

In terms of asset types, high street assets

in prime locations took 1st place at

€4.5bn, or 45%, in part due to the Kaufhof

deal. However, 2019 also saw strong

demand for retail warehouses and retail

parks with a food anchor, as evidenced by

the sale of the Superfood portfolio com-

prising 68 supermarkets for around

€250m in Q4.

Investors showed a clear preference for

food retailers and daily amenity retail as

these assets are considered crisis-resist-

ant in light of the disruptive changes being

caused by e-commerce. They poured

€3.8bn, or 37%, into retail warehouses

and retail parks, accordingly. In terms of

number of deals, these assets claimed an

even higher market share of 61%.

Shopping centers came in 3rd with a mar-

ket share of 18% in terms of volume and

9% in terms of number of deals. Investors

are especially selective when it comes to

investment opportunities in this segment

and demand is beginning to shift towards

mixed-use assets. The highest volume

single-asset deals of the year were

Königsbau-Passagen in Stuttgart and the

Zoom office/retail property in Berlin,

which changed hands for €280m and

€265m, respectively.

yields

Prime yields for commercial buildings in

top locations in the Big 7 remained stable

for the most part over the course of the

year, currently ranging between 2.75%

and 3.30%. More and more investors,

however, are expecting to soon see a

downward trend in rents and purchase

prices. Stuttgart and Hamburg have

already posted increases in gross initial


0 1 2 3 4

Other Investors


Private Investoren/Family Offices




Other Investors


Property Developers




High Street 45%

Shopping Centers 18%

Retail Warehouses/Retail Parks 37%


0 1 2 3 4

Other Investors


Private Investoren/Family Offices




Other Investors


Property Developers




High Street 45%

Shopping Centers 18%

Retail Warehouses/Retail Parks 37%

Figure 2: Transaction Volume by Type of Building 2019 share in %

Figure 3: Transaction Volume by Buyer and Seller Groups in billion €





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yields for high street assets (20 bps in

Stuttgart and 10 bps in Hamburg to

3.30%). Yields for shopping centers in

prime locations with high footfall range

between 4.50% and 4.75%. An upward

trend in yields can also be seen outside of

prime locations and in less attractive sec-

ondary and tertiary cities. Retail parks and

retail warehouse portfolios with food

anchors with yields of around 5.00% con-

tinue to find popularity with investors

looking for higher yields.

Summary and Outlook

The structural changes currently taking

place across the retail landscape and the

selective approach taken by investors will

continue in 2020. Contract negotiations

are proving rather lengthy as a result, and

a number of billion-euro deals, which had

been expected for 2019, including Metro’s

sale of over 80 Real hypermarkets, have

been postponed to early 2020. However,

we can also expect high-volume single

assets in established locations featuring

upside potential after revitalization to

change hands. Even though retail assets

are only partially benefiting from the cur-

rent investment boom, we consider €10bn

in total transaction volume realistic for

2020, especially in light of the fact that the

downside potential of one-time deals as

can typically be seen in the office segment

is relatively low.

2.0

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3.0

3.5

4.0

4.5

5.0

Q4 19Q4 18Q4 17Q4 16Q4 15



Susanne KieseHead of Research

+49 211 862062-47

[email protected]

Figure 4: Prime Yield High Street Retail in %

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Transaction Volume

The German industrial and logistics real

estate market finished out 2019 with a

satisfactory annual result. Investors

poured roughly €6.6bn into this asset

class, bringing in the third-strongest

annual result to date since record year

2017 (€8.7bn) and 2018 (€6.8bn) despite

ongoing limited supply. This result also

managed to top the 5-year average by

roughly 19%. Industrial and logistics once

again proved the third strongest asset

class on the overall commercial real

estate market with a market share of over

9%. This excellent result can largely be

attributed to exceptionally lively activity

during the end-of-year rally. Almost the

same amount of capital was invested in

Q4 as in Q1 and Q2 combined. And results

would have been even higher if more

product had been available.

Supply and Demand

Portfolio deals accounted for €2.6bn in

transaction volume in 2019, or 40% of

annual transaction volume, down 32% yoy.

Apollo Global Management and Palmira

Capital Partners sold the Maximus portfo-

lio in Q4, the largest logistics portfolio deal

in 2019. Singapore’s sovereign wealth fund

(GIC) acquired the pan-European logistics

portfolio comprising 28 assets before the

end of the year. The portfolio changed

hands for around €950m, €540m of which

was generated by the portfolio’s German

assets. Other deals included the sale of the

Blue Chip portfolio comprised of 3 large

distribution centers to GreenOak and

Apeiron (roughly €350m) as well as the

sale of 9 logistics assets to the REIT man-

aged by Asian investor Frasers (roughly

€320m). The deal involving the sale of the

Amazon logistics center (75,000 sqm) in

Dortmund was one of the year’s major and

most expensive single-asset deals with a

gross yield of just above 4%. Arabian

investors sold the asset to Savills Invest-

ment Managers for roughly €140m just

two years after initial acquisition. Anoth-

er notable single-asset deal was La

Française’s acquisition in September of

Fast Facts




TOP 7 35% 38%



Prime Yield Industrial and Logistics in the TOP 7 (average in %)

4.20% 4.50%

0

1

2

3

4

5

6

7

8

20192018201720162015

6.64.0 4.6 8.7 6.8

2.7 2.9

1.3 1.1

7.6

1.41.8

4.8

3.2

3.9

Average 2015 – 2019

IndustrialLogistics TAV in total

Figure 1: Transaction Volume Industrial and Logistics in billion €

INDUSTrIaL aND LOGISTICS INVESTMENT





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the new Amazon logistics center in

Mönchengladbach (around 150,000 sqm)

under similar conditions on behalf of

South-Korean investors Samsung and KB.

Foreign investors continued to be active

on the German market in 2019, pouring a

total of around €4.0bn into German logis-

tics and industrial assets. This reflects a

60% market share, up 13 percentage

points yoy. Asian investors like Frasers

and GIC (Maximus portfolio) accounted for

€1.6bn alone. British investors (roughly

€1.1bn) and US investors (€547m) were

particularly active on the German logistics

market as well. British investor Savills

Investment Managers acquired the Ama-

zon logistics center in Dortmund as well

as 3 DHL transshipment centers in Berlin,

Leimen and St. Ingbert (Saarland) for

around €49m. German investors were less

active in 2019 compared to the previous

year, accounting for €2.6bn, or 40%, with

results down 12 percentage points yoy.

The investor group dedicated one third of

this transaction volume to light industrial

assets while foreign investors continued

to focus on traditional logistic assets.

yields

High-quality assets featuring long-term

leases and low-risk tenants have become

quite rare on the German market. Demand

for logistics space is extremely high at the

moment and even investors with less

experience in this segment have become

increasingly interested. Prices are rising

as a result and purchase price multipliers

continue to increase. Gross prime yields

were recorded at 4.2% at year-end for lat-

est-generation logistics assets in top

locations featuring a standard lease term

of at least 10 years (net yield of roughly

3.7%). Gross prime yields fell another 30

bps over the course of 2019 with no end

in sight.

Summary and Outlook

Prime yield compression is set to continue

in light of ongoing negotiations and cur-

rent bidding rounds involving core assets,

and we expect multipliers to exceed 24x in

the next few months. Gross prime yields

continue to approach the 4% mark. Some

owner-occupiers are likely to take advan-


0 1 2 3 4

Other Investors


REITs

Pension Funds



Other Investors


Private Investors/Family Offices

Property Developers



up to € 10 m 8%

€ 10 m to € 30 m 18%

€ 30 m to € 50 m 11%

above € 100 m 51%€ 50 m to € 100 m 12%


0 1 2 3 4

Other Investors


REITs

Pension Funds



Other Investors



Property Developers



up to € 10 m 8%

€ 10 m to € 30 m 18%

€ 30 m to € 50 m 11%

above € 100 m 51%€ 50 m to € 100 m 12%

Figure 2: Transaction Volume by Size Category 2019 share in %


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tage of these favorable market conditions

to sell their assets in the scope of sale-

and-leaseback transactions, anticipating

high profit in light of strong demand and

intensified competition. Investors will

have to adjust their price expectations in

order to gain access to coveted assets.

Even stock properties are recording mul-

tipliers at levels previously typical for

new-build core products. The current ups

and downs in industrial production do not

seem to have had an impact on investment

activity around German industrial and

logistics assets to date, and investor inter-

est in these assets will remain strong in

2020. Investor sentiment for 2020 is

favorable with e-commerce and high

c onsumer spending in Germany pointing

to continued growth in demand for logis-

tics space.

Nicole KinneAssociate Director I

Research Industrial & Logistics

+49 89 624294-792

[email protected]

4.0

4.5

5.0

5.5

6.0

6.5

Q4 19Q4 18Q4 17Q4 16Q4 15

Figure 4: Prime Yield Logistics in the TOP 7 Average in %





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Transaction Volume

The German hotel investment market

posted just over €5.0bn in 2019, exceed-

ing this mark for the second time. Activity

on the market picked up speed following a

calm H1 and experienced an impressive

end-of-year rally. The result posted in

2019 reflects a striking 25% increase

over a calm 2018, exceeding the 5-year

average by 20%. The share of hotel

assets in total transaction volume

remained stable at 7%.

Supply and Demand

Portfolio deals were up again in 2019 with

Axa Investment Managers acquiring 11

European hotels from Principal Real

Estate for over €530m. Swedish investor

Pandox spent just under €500m on hotel

assets, including three hotel portfolios.

Portfolio deals accounted for €1.4bn in

total, up from a 16% market share in the

previous year to 27%.

High-volume single-asset deals also

experienced a comeback, particularly

near year-end. Large-scale transactions

clearly targeted business hotels in the

Germany’s Big 7 cities. THE SQUAIRE at

Frankfurt Airport, which houses two

hotels operated by the Hilton Group,

claimed pole position. The multi-bil-

lion-euro sale of Tucherpark in Munich to

Commerz Real and property developer

Hines also involved a Hilton hotel. These

major deals boosted total transaction vol-

ume in Germany’s Big 7 markets to €3bn.

At the same time, investors are increasing-

ly turning to secondary and tertiary mar-

kets in response to price pressure. More

than €2bn were poured into markets out-

side the Big 7, resulting in a market share

of 40%. As property sizes tend to be small-

er in these markets, investment activity

tended to focus on deals of up to €50m.

Fast Facts




TOP 7 60% 67%



Prime Yield Hotel 3.70% 3.75%

0

1

2

3

4

5

6

20192018201720162015

4.04.24.5

5.05.2

Average 2015 – 2019Whole year

HOTEL INVESTMENT

Figure 1: Transaction Volume Hotel in billion €

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Investors nevertheless are conducting

particularly detailed analyses before

investing in assets located in secondary

and tertiary cities. Market conditions and

upside potential can vary considerably

from location to location. BMO Real

Estate’s acquisition of Tafelhof Palais in

Nuremberg for over €230m was the high-

est-volume deal signed outside the Big 7

in 2019.

German investors once again dominated

the market buy-side with a 59% market

share, up 2% yoy. They poured almost

€3.0bn into German hotel assets over the

course of the year. Investors from Swe-

den, Saudi Arabia, Israel and Singapore

followed in the ranks. Investor activity

sell-side was similar to what we saw in

the previous year, with German investors

accounting for 70% of transactions

signed, selling hotel assets valued at

€3.5bn. Foreign investors sold assets

worth €1.5bn. Investors from the US and

France were particularly active sell-side

posting a market share of 11% each, fol-

lowed by Spain with 4%.

Hotels in the 4-star segment continued to

dominate the market with a share of 60%

and more than €3.0bn in transaction vol-

ume, an above-average result even for the

most popular hotel category. 3-star hotels

were the only other segment to achieve a

two-digit market share at 24% (€1.2bn)

while 5-star hotels and boarding houses

took a breather. The market share gener-

ated by luxury hotels dropped to 7%,

reflecting €340m in transaction volume,

down from an impressive 17% in the pre-

vious year. Serviced apartments experi-

enced a steep drop in market share to 3%,

or €130m.

Although asset/fund managers managed

to snatch 1st place in the previous year’s

buy-side ranking, they were once again

outperformed by open-ended real estate

funds and special funds in 2019. This

investor group managed to almost double

their investment volume yoy to €1.6bn,

boosting their market share from 22% to

32%. Asset/fund managers also exceeded

the €1bn mark with €1.4bn, which put

their market share down slightly from

30% to 27%. Listed property companies

came in 3rd with almost €750m.


0.0 0.5 1.0 1.5 2.0

Other Investors


Pension Funds




Other Investors





Property Developers

4 Stars 60%

3 Stars 24%

5 Stars 7%

2 Stars 4%

Boarding House 3%

Other 1%1 Star 1%


0.0 0.5 1.0 1.5 2.0

Other Investors


Pension Funds




Other Investors





Property Developers

4 Stars 60%

3 Stars 24%

5 Stars 7%

2 Stars 4%

Boarding House 3%

Other 1%1 Star 1%

Figure 2: Transaction Volume by Star Segment 2019 share in %






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Property developers came out on top sell-

side as usual with over €1.6bn, a signifi-

cant yoy increase that is attributable to

the well-stocked development pipeline.

Their sell-side market share climbed from

29% to 33% as a result. Corporates and

owner-occupiers along with open-ended

real estate funds and special funds fol-

lowed in the ranks, disposing of more

assets than in the previous year and

accounting for around €900m and

€700m, respectively. This reflects a mar-

ket share of 18% and 14%.

yields

High prices are prompting investors,

particularly in the Big 7, to perform more

extensive analyses before deciding to

buy. Prices appear to have peaked in

some locations due to concerns regar-

ding excess capacity.

The current situation is also reflected in

prime yields, which were down slightly

yoy and began to experience a flat trend

around year-end. Yields in the Big 7 cur-

rently range between 3.70% in Munich to

4.40% in Berlin. Düsseldorf and Stuttgart

were the first cities to experience slight

yield increases over the course of 2019.

We do not expect prices to drop much fur-

ther as interest rates remain low. 2020 is

likely to see a stabilization at current lev-

els with scattered price reductions in cer-

tain markets.

Summary and Outlook

The German hotel investment market

came close to bringing in a record result

in 2019 despite the ongoing shortage of

supply. The end-of-year rally showed that

demand for hotel assets remains high.

Investors were especially interested in

high-volume single-asset deals in the

Big 7 as well as investments in secondary

and tertiary markets. Portfolio deals also

experienced a comeback in 2019. The

hotel investment market is going to bene-

fit from ongoing strong activity on the

overall market, making a year-end result

on par with the 5-year average of €4.2bn

realistic.

Marc SteinkeConsultant | Research & GIS

+49 211 862062-40

[email protected]

3.5

4.0

4.5

5.0

5.5

6.0

Q4 19Q4 18Q4 17Q4 16Q4 15



Figure 4: Prime Yield Hotel in %

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BERLIN 22

DÜSSELDORF 28

FRANKFURT 34

HAMBURG 40

COLOGNE 46

MUNICH 52

STUTTGART 58

CITY REPORTS

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CITY FACTS BERLINPopulation in 1,000 3,645

Employees Paying Social Se cu rity Contributions in 1,000

1,528

Unemployment Rate in % 7.7

Per Capita Disposable Income in € 22,220

Fast Facts

Office Leasing Berlin 2019 Change year-on-year

Office Space Take-up 1,030,000 sqm 30.2%

Leasing Take-up 989,000 sqm 24.0%

Prime Rent 39.90 € / sqm 13.7%

Average Rent 26.30 € / sqm 21.2%

Vacancy Rate 1.2% – 30 bp

Office Space Stock 20.50 million sqm 9.8%

BERLIN

achieved rents in € / sqm

Submarket Prime Rent Average RentCBD City West 34.30 31.40CBD City East 36.50 29.10CBD Potsdamer Platz / Leipziger Platz 44.00 38.30Central Station 37.00 29.70Mediaspree 38.50 33.10City West 35.00 26.00City East 38.00 28.90City Margins North 33.00 25.20City Margins South 35.60 28.50Periphery North 23.00 20.20Periphery West 19.50 15.90Periphery South 22.50 16.30Periphery East 31.10 23.00Adlershof 16.00 14.20Schönefeld 12.20 12.20

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Take-up

Activity on the Berlin office leasing mar-

ket continued to boom with a strong end-

of-year rally in 2019. A total of 1 million

sqm of office space was snapped up by

new tenants, marking a new record result

and reflecting a strong 30% yoy increase.

Large-scale leases signed for over 5,000

sqm had a significant impact on take-up

results. 50 new leases were signed in this

space segment, accounting for more than

half of total take-up.

High-volume leases involving the public

sector contributed the largest share to

office take-up in Berlin, accounting for

236,600 sqm and generating a market

share of almost 23%. Notable deals

included BIMA’s lease of more than

30,000 sqm at B:HUB located on Kynast-

straße and around 14,000 sqm at Airport

Bureau Center (Saatwinkler Damm) taken

up by the German Federal Environmental

Agency (Umweltbundesamt). ICT compa-

nies accounted for a number of smaller

deals, coming in 2nd with a 20% market

share and over 130 new leases signed for

around 204,000 sqm.

Market activity once again revolved

around the City East submarket including

the CBD, contributing around 25% to total

take-up. However, neighboring locations

are attracting an increasing demand due

to the ongoing supply bottleneck in central

locations. The City Periphery North and

City Periphery South submarkets both

benefited from current market conditions,

coming in 2nd and 3rd place, respectively,

among the city’s most popular office loca-

tions. Large-scale tenants in particular

can still find available options in these

submarkets. Examples include the lease

signed by Vamed AG for around 9,000

sqm in City Periphery West and the SONY

Music Entertainment lease for roughly

8,000 sqm in City Periphery South.

OFFICE LEaSING

Figure 1: Office Space Take-up in 1,000 sqm Figure 2: Completion Volume in 1,000 sqm

0

200

400

600

800

1,000

1,200

20192018201720162015

Leasing Owner-occupiers thereof Pre-let/Owner-occupiedCompletions

0

200

400

600

800

1,000

1,200

20212020201920182017

790740

837752

989

53123 100

39 41

628

442

117203

309

856

1,154





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rents

Berlin continues to break one record after

the other when it comes to office rents.

Prime rents have increased to €39.90 per

sqm and average rents to €26.30 per sqm,

reflecting yoy increases of around 14%

and 21%, respectively. The area demar-

cated by the city’s inner suburban train

ring saw a particularly steep increase. At

these rates, rents in this area could even

hit levels of between €45 and €50.

Supply and Vacancy

Vacancy was recorded at a new all-time

low of 1.2%. The amount of space availa-

ble for immediate tenancy dropped

58,000 sqm from 2018 levels to a current

246,000 sqm. Vacancy is particularly low

in the submarkets located within the city’s

inner suburban train ring.

key Developments

The market will continue to face a supply

bottleneck at least over coming months.

Property developments generated around

60% of leasing activity in 2019. However,

construction activity has picked up con-

siderably. Roughly 2.0 million sqm of new

office space is scheduled to hit the market

in 2020 and 2021, although around 50%

has already been pre-leased.

Summary and Outlook

We do not see any signs of large compa-

nies or SMEs rethinking their plans to

expand and trust in the economy still high.

Activity on Berlin’s office leasing market

is set to remain lively in 2020, although it

is rather unlikely that results will again

exceed the 1-million-sqm mark.

Figure 3: Vacancy Rate in % and Vacancy in 1,000 sqm Figure 4: Prime and Average Rents in ¤/sqm

Average RentPrime RentVacancy RateVacancy

0

100

200

300

400

500

600

700

800

2019201820172016201510

15

20

25

30

35

40

45

20192018201720162015

24.30

28.5031.30

15.10 16.30

19.15

35.10

21.70

39.90

26.30

3.7 %

3.0 %

2.0 %

1.5 %1.2 %

685

567

390

304246

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Transaction Volume

The Berlin investment market for commer-

cial real estate set a new standard in 2019

with a transaction volume of €12.2bn, up

an incredible 75% yoy and even surpassing

2015’s record result by 50%.

Investment in office assets remained the

main driver behind the city’s strong

results. This asset class alone exceeded

all previous commercial transaction vol-

ume records at just under €9.7bn. Proper-

ty developers have responded to the

ongoing lack of supply over the past few

years by adding new office properties to

the market. The market was dominated by

a number of forward deals as a result,

especially in the Mediaspree submarket.

However, the most notable deal of 2019

involved the FÜRST property develop-

ment situated in the prominent location of

Kurfürstendamm in the City West submar-

ket, which changed hands for over three

quarters of a billion Euros. The EDGE East

Side and Stream office towers were sold

in the Mediaspree submarket for roughly

€1bn combined.

INVESTMENT

Fast Facts

Investment Berlin 2019 2018

Transaction Volume 12,172 million € 6,959 million €




Most Important Property Type Office 79% Office 59%

Prime Yield Office 2.90% 3.10%

Figure 5: Transaction Volume in million € Figure 6: Transaction Volume by Type of Property 2019 share in %

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

20192018201720162015

Industrial &Logistics 1%

Other 5%

Building Site 2%

Retail 9%

Hotel 4%

Office 79%

8,100

4,900

7,5226,959

12,172

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

20192018201720162015


Other 5%

Building Site 2%

Retail 9%

Hotel 4%

Office 79%

8,100

4,900

7,5226,959

12,172





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Supply and Demand

Investors have been focusing on commer-

cial assets in Berlin, particularly office

buildings, for quite some time now. This

high demand, however, has been facing

comparatively low supply in recent years.

Prices have risen significantly as a result

and many investors had no choice but to

postpone their investment plans to 2019.

This strong demand has also been driven

by ongoing low interest rates.

Supply has grown over the past year in

response, providing many investors with

product in the form of property develop-

ments. This trend is also reflected in the

composition of seller groups. Property

developers accounted for more than 40%

of transaction volume in 2019, roughly

four times higher than the volume record-

ed in 2018. Listed property companies

sold properties valued at almost €2bn

while asset/fund managers disposed of

commercial assets located in Berlin for

around €1.7bn. The latter were once again

the most active players when it came to

buying properties, investing more than

double the amount recorded in the previ-

ous year at €5.7bn. Open-ended real

estate funds and insurance companies

trailed behind in 2nd and 3rd place respec-

tively with slightly more than €1bn each.

2019 results once again point to how pop-

ular the Berlin office market is with for-

eign investors, who accounted for 59% of

capital invested. However, less than half

of total transaction volume was generated

by foreign investors sell-side, with a mar-

ket share of 46%.

yields

Berlin experienced ongoing yield com-

pression in 2019, albeit at a slower pace.

Investors have been willing to pay roughly

35x the annual rent for premium office

assets in prime locations. Gross prime

initial yields were down 20 bps yoy to

2.90% as a result. Logistics assets have

continued to experience yield compres-

sion as well. Gross initial yields are

approaching the 4.00% mark due to a lack

Figure 7: Transaction Volume by Buyer Groups in million €, share in %

Figure 8: Transaction Volume by Seller Groups in million €, share in %

0 2,000 4,000 6,000 8,000

Other Investors

Open-ended Real EstateFunds/Special Funds

Banks

Asset Managers/Fund Managersr

Listed PropertyCompanies

Property Developers47%

0 2,000 4,000 6,000 8,000

Other Investors


Property Developers

Insurance Companies



10%

9%

6%

5%

23%

41%

16%

14%

4%

6%

19%

0 2,000 4,000 6,000 8,000

Other Investors


Banks

Asset Managers/Fund Managersr



0 2,000 4,000 6,000 8,000

Other Investors


Property Developers

Insurance Companies



10%

9%

6%

5%

23%

41%

16%

14%

4%

6%

19%

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of product, coming to 4.20% at year-end,

down 30 bps yoy. Hotel assets experi-

enced a similar trend with a 30-bps

decrease in terms of gross initial yields.

Hotel assets in Berlin proved neverthe-

less the most lucrative compared to hotels

in Germany’s other top 7 markets at

4.40%. Retail assets in high-street loca-

tions remained at 3.10%, down only 10 bps

yoy.

Summary and Outlook

Momentum on the Berlin commercial

property market has picked up signifi-

cantly in the past few years. However, it

was impossible to anticipate 2019’s

extraordinary result. Nevertheless, the

favorable general conditions evident in

early 2020 point to the possibility of

another strong annual result in the same

ballpark.

Expectations that new President of the

ECB, Christine Lagarde, would promote a

more restrictive monetary policy were not

fulfilled. Pressure to invest is still high

and real estate assets are attractive com-

pared to other investment products. We

expect demand to remain high in 2020 as

a result. This demand will be met with

considerable supply as the development

pipeline, particularly for office properties,

is well-stocked at least for the next few

years. Because 2019’s record result was

so high, total transaction volume in 2020

will likely fall short of this mark. We nev-

ertheless anticipate another exceptionally

strong year with well above-average

annual results for 2020.

The Berlin investment market reached an all-time high in 2019 and is setting new standards with over €12 billion transaction volume.

CONTACT Margit Lippold Director | Research

+49 30 202993-43, [email protected]





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DÜSSELDORF

CITY FACTS DÜSSELDORFPopulation in 1,000 619


424



Fast Facts

Office Leasing Düsseldorf 2019 Change year-on-year

Office Space Take-up 475,000 sqm 40.5%







Submarket Prime Rent Average RentCBD 28.50 23.40City Center 25.00 19.20Harbour Area 25.00 19.50Kennedydamm 25.00 21.60Left of the Rhine 18.00 13.20Düsseldorf-North 18.00 13.80Airport City 17.50 16.20Grafenberger Allee 16.00 14.00City Center-East 16.00 11.50Düsseldorf-South 12.00 11.00

29DüSSELDOrF

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Take-up

The office leasing market in the Düsseldorf

municipal area recorded a new all-time

high in 2019 with take-up at 475,000 sqm,

finally beating out the previous record

from 2007. This result not only reflects an

impressive yoy 41% increase but also

exceeds the 10-year average by 51%. The

city recorded 9 major deals signed for

over 10,000 sqm. Although the largest

two leases were signed for space at prop-

erty developments, most of the other

transactions signed for more than 5,000

sqm involved stock properties. Space

available for immediate tenancy decreased

significantly as a result. Consulting firms

and public administration played a signifi-

cant role in 2019.

While take-up in the smallest space seg-

ment of 500 sqm remained stable com-

pared to the previous year, larger units of

up to 1,000 sqm experienced a considera-

ble 29% drop in take-up. This trend can be

attributed to the high results posted over

the past few years and the resulting short-

age of space in coveted submarkets. Units

ranging between 1,000 and 5,000 sqm

managed to maintain 2018 take-up levels

for the most part.

In terms of location, the majority of take-up

tended to revolve around three submar-

kets, all of which recorded significant

increases yoy. The City Center claimed

pole position with 95,800 sqm, up 3% yoy

with slightly more than 100 leases signed.

The Left of the Rhine and Harbour sub-

markets followed in the ranks with 88,300

sqm (+90%) and 81,200 sqm (+202%),

respectively. The two submarkets regis-

tered just over 40 deals each.

0

100

200

300

400

500

201920182017201620150

30

60

90

120

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20212020201920182017


357 359322 323

471

347 11 15 4

53

110

89 8692 93

138


OFFICE LEaSING

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100

200

300

400

500

201920182017201620150

30

60

90

120

150

20212020201920182017


357 359322 323

471

347 11 15 4

53

110

89 8692 93

138





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rents

Prime rents in the CBD increased slightly

to €28.50 per sqm at year-end. Looking

ahead, we consider further rental growth

in upcoming quarters realistic due to

shortage of supply. Weighted average

rents also posted a significant increase to

€17.30 per sqm, up 7% yoy.

Supply and Vacancy

The vacancy rate fell by 0.5 percentage

points yoy to 5.9% at year-end due to the

large number of major leases signed for

space at stock properties. Space will con-

tinue to become increasingly hard to come

by in the wake of ongoing high demand,

particularly in central locations. Units of

over 2,000 sqm available for immediate

tenancy are particularly scarce with

smaller units of around 1,000 sqm already

experiencing a similar trend. Companies

on the lookout for space will in many cas-

es be required to start their search for

new office space earlier as a result.

key Developments

Roughly 93,400 sqm is scheduled for com-

pletion in 2020, of which only around 57%

has been pre-leased. That means there is

still opportunity for potential tenants to

snap up space at these property develop-

ments. Another 140,000 sqm is scheduled

to enter the market in 2021, 80% of which

has been pre-leased. Most of this activity

revolves around the Harbour, Düsseldorf

North and Kennedydamm submarkets.

Summary and Outlook

The Düsseldorf office leasing market

posted a record result in 2019, fueled by a

number of major deals. We expect to see

considerably lower take-up in the munici-

pal area of around 360,000 sqm in 2020.

The drop in vacancy is expected to contin-

ue, fostering further moderate rent

increases in popular locations.


0

200

400

600

800

2019201820172016201510

15

20

25

30

35

20192018201720162015

28.0026.00 26.50 27.00

16.20

28.50

17.30

14.40 14.90 15.40


8.5 %

7.5 %7.0 %

5.9 %6.4 %

651

576532

495455

31DüSSELDOrF

| 2019 / 2020 C

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Transaction Volume

The investment market in the Düsseldorf

municipal area posted a new all-time high

of just over €3.8bn in 2019 following a

breathtaking finish to the year. The end-

of-year rally brought in double the trans-

action volume recorded in the first three

quarters of the year. Not only did this

result reflect a 12% increase over the pre-

vious record dating back to 2018, it also

managed to beat out the 5-year average

by 50%. Taking into account the large

number of deals signed in the surrounding

area of Düsseldorf that contributed a total

of €450m, transaction volume in the

Greater Düsseldorf Area even managed to

exceed €4bn for the first time. Ten deals

for over €100m were signed in the munic-

ipal area alone. The segment of between

€50m and €100m also contributed to the

excellent result with 13 deals signed.

Portfolio deals once again achieved a

moderate market share of roughly 21%,

repeating the previous year’s trend. In

addition to traditional single-asset deals

and the acquisition of entire stock portfo-

lios, we also saw increasing activity in

terms of minority-share investment in

companies holding real estate portfolios.


0

1,000

2,000

3,000

4,000

20192018201720162015

Mixed Use 3%

Building Site 9%

Hotel 9%

Other 1%

Retail 14%

Office 64%

2,550

2,180

2,740

3,420

3,840

Fast Facts

Investment Düsseldorf 2019 2018







INVESTMENT

0

1,000

2,000

3,000

4,000

20192018201720162015

Mixed Use 3%

Building Site 9%

Hotel 9%

Other 1%

Retail 14%

Office 64%

2,550

2,180

2,740

3,420

3,840





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This deal structure amassed a total of

almost €400m in the municipal area

alone.

Supply and Demand

Office assets remained the most popular

asset class with a share of 64%, or €2.5bn

in transaction volume, followed by retail

assets with 14%, or €525m. Hotels and

land site deals signed for future property

and district developments were next in the

ranks with a 10% share each. These devel-

opments will make a significant medi-

um-term contribution to transaction vol-

ume estimated at almost €1bn. All other

asset classes accounted for a compara-

tively insignificant share. Investment in

the core and core plus segment accounted

for 73% of transaction volume across all

asset classes.

Activity tended to revolve around the CBD

as well as the City Center, Kennedydamm

and Düsseldorf North submarkets, each of

which posted transaction volumes of more

than €500m. In terms of the number of

deals signed, the City Center submarket

came out on top (25), followed by Düssel-

dorf North (14) and Kennedydamm (12).

Transaction volume reflected a well-diver-

sified breakdown by sector in 2019. Asset/

fund managers generated the highest

transaction volume with just shy of

€740m. Property developers and develop-

ment companies came in second with

around €660m ahead of open-ended real

estate funds and special funds with rough-

ly €640m. Asset/fund managers also gen-

erated the highest transaction volume sell-

side with around €740m. Opportunity

funds and private equity funds, property

developers and open-ended real estate

funds and special funds followed in the

ranks, each contributing just over €500m.

Foreign investors proved less active buy-

side in 2019 compared to the previous

year, accounting for a share in total trans-

action volume of only 24%. Just over half

of the international capital invested in 2019

stemmed from Europe, one third from

American investors and the remaining

share from Asia.

0 500 1,000 1,500

Other Investors



Property Developers



19%

0 500 1,000 1,500

Other Investors

Pension Funds



Property Developers


17%

17%

13%

11%

23%

19%

14%

13%

13%

10%

31%



33DüSSELDOrF

| 2019 / 2020 C

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yields

The ongoing momentum on the invest-

ment market continues to put pressure

on gross initial yields. Prime yields for

premium office assets in top locations

came to 3.30% at year-end, down anoth-

er 20 bps yoy. Retail and mixed-use

assets posted yields of up to 3.20% in the

CBD with some parts of the Königsallee

neighborhood recording even lower yields.

Top locations in the highly sought-after

Kennedydamm and Harbour submarkets

also registered ongoing yield compres-

sion with some prime office assets even

achieving CBD levels.

Summary and Outlook

Demand for Düsseldorf commercial real

estate remained exceptionally strong

across all risk classes with 2019 the third

year in a row to set a new record. Numer-

ous large-scale transactions, particularly

in the office segment, contributed to this

all-time high.

These impressive results would have been

even higher if a number of high-volume

deals in advanced stages had not been

postponed to 2020. We can expect activity

on the Düsseldorf investment market to

remain exceptionally lively in 2020 even

though it will be difficult to match the

record set in 2019. However, taking into

account the large-scale deals currently in

the pipeline, we still consider a transaction

volume of at least €3.0bn realistic. Current

high demand from investors is anchored in

their confidence in the office leasing mar-

ket, which provides a solid foundation

thanks to falling vacancy rates and upward

rent price trends.

The Düsseldorf investment market managed to once again exceed the previous year’s record result, almost reaching the €4bn mark in the municipal area.

CONTACT Lars Zenke Director | Research

+49 211 862062-48, [email protected]





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CITY FACTS FRANKFURTPopulation in 1,000 753


602



Fast Facts

Office Leasing Frankfurt 2019 Change year-on-year

Office Space Take-up 550,500 sqm – 10.9%

Leasing Take-up 533,700 sqm – 12.0%



Vacancy Rate 6.9% 10 bp



Submarket Prime Rent Average RentBanking District 47.00 34.00Westend 35.00 25.00City 36.00 22.50Central Station / Westhafen 24.00 21.00Bockenheim 20.00 17.00Europaviertel / Fair District 22.50 21.00City West 20.00 17.90Frankfurt South 21.00 15.50Airport 27.00 21.50Frankfurt West 15.00 12.50Frankfurt North 12.50 9.00Mertonviertel 14.00 13.00Eastend West 21.00 15.30Eastend East 13.00 10.50Niederrad 16.50 14.50Eschborn 16.00 13.00Kaiserlei 16.50 13.00

35FraNkFUrT

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Take-up

The Frankfurt office leasing market saw

another strong year in 2019 with take-up

at roughly 551,000 sqm. Although this

result managed to surpass both the 5 and

10-year average, it fell short of the previ-

ous year’s result by around 11%. Following

a weak Q3, leasing activity significantly

took off in Q4. Almost 156,000 sqm, or

28%, can be attributed to the banking sec-

tor, which dominated the office leasing

market in 2019.

The city’s Banking District recorded the

highest take-up just ahead of Niederrad,

nevertheless posting a yoy decrease of

25% at roughly 83,000 sqm. Large-scale

leases involving units of over 10,000 sqm

remained scarce in the Banking District

and none of the 5 largest leases of the year

were signed for space in this submarket.

Niederrad came in a close second with

roughly 81,000 sqm. This above-average

result can largely be attributed to the

lease signed by DekaBank for around

46,000 sqm. City West ranked third with

take-up at around 48,000 sqm generated

by only 10 leases. The lease signed by the

City of Frankfurt for around 26,500 sqm

at the new civic center located at

Solmsstrasse 27-37 contributed signifi-

cantly to annual results. This was the sec-

ond-largest deal signed in 2019. The

neighboring Bockenheim submarket also

posted a strong 45,000 sqm, largely

thanks to the lease signed for around

26,500 sqm by ING-DiBa at the develop-

ment Trade.

0

100

200

300

400

500

600

700

800

201920182017201620150

50

100

150

200

250

300

20212020201920182017


348

548

668606

534

424

4212 17

198

111

82 92

125

296

144


OFFICE LEaSING





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rents

Prime rents were up more than 8%, or

€3.50 per sqm, to €45.50 per sqm in 2019.

Average rents also experienced a 5%

increase to €21.30 per sqm thanks to a

large number of leases at higher rent lev-

els.

Supply and Vacancy

Around 794,000 sqm was available for

immediate tenancy at the end of 2019,

reflecting a vacancy rate of 6.9%. In con-

trast to preceding years, the drop in

vacancy appears to have stopped for the

moment. However, we did see notable dif-

ferences between central locations, loca-

tions near the city center and peripheral

areas. Almost 40% of total vacancy could

be found in the submarkets Eschborn,

Eastend East and Mertonviertel. Older

buildings in satellite locations are only

benefiting to a certain degree from the

favorable general conditions on the over-

all market. With additional and, in some

cases, large-scale stock space becoming

available on the market in 2020, we can

expect vacancy rates to remain stable or

increase slightly.

key Developments

Completion volume in 2019 hit the

100,000-sqm mark for the first time

since 2016 at around 125,000 sqm. More

than double that amount is scheduled for

completion in 2020 (roughly 296,000 sqm)

and demand for space at property devel-

opments remains high. 70% of the office

space at developments scheduled for

completion in 2020 has already been

pre-let.

Summary and Outlook

The office leasing market again recorded a

take-up volume of more than 550,000 sqm

for the fourth year in a row, an impressive

indication of the ongoing lively activity in

the office segment. Other indicators such

as vacancy rate, positive rental trend and

pre-leasing rates at property develop-

ments also point to a favorable market

environment. Whether or not the current

trend will continue into the new decade

will strongly depend on the restructuring

of the German banking sector.


0

300

600

900

1,200

1,500

2019201820172016201510

20

30

40

50

20192018201720162015

38.50 37.50

41.00 42.00

19.00 18.70 20.00 20.30

45.50

21.30

Average RentPrime Rent

11.8 %11.2 %

9.6 %

6.8 % 6.9 %

1,3581,289

1,105

784 794

Vacancy RateVacancy

0

300

600

900

1,200

1,500

2019201820172016201510

20

30

40

50

20192018201720162015

38.50 37.50

41.00 42.00

19.00 18.70 20.00 20.30

45.50

21.30

Average RentPrime Rent

11.8 %11.2 %

9.6 %

6.8 % 6.9 %

1,3581,289

1,105

784 794

Vacancy RateVacancy

37FraNkFUrT

| 2019 / 2020 C

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Transaction Volume

The Frankfurt commercial real estate

market posted over €7.8bn in transaction

volume in 2019. Although this result is

down 19% compared to 2018’s record

year, it still surpassed the 5-year-aver-

age by 17%.

Behind this strong performance was an

exceptional end-of-year rally. Almost half

of total annual transaction volume was

generated in Q4 alone with 50 deals

signed for over €3.9bn. High-volume

landmark deals such as the sale of THE

SQUAIRE (over €900m), the Welle

(around €620m) and T8 (€400m) contri-

buted significantly to this result. Follow-

ing investments in a number of high-rise

deals in the Banking District, City and

Westend submarkets in 2018, the share in

transaction volume claimed by the CBD

dropped by around a third in 2019 as activ-

ity shifted towards the other submarkets.

In addition to THE SQUAIRE, notable

deals outside the CBD included the high-

rise deals THE SPIN and 99 West.


0

2,000

4,000

6,000

8,000

10,000

20192018201720162015

Retail 3%

Building Site 2%

Other 1%

Hotel 10%

Office 80%


Mixed Use 2%

5,6876,143

6,912

9,664

7,843

Fast Facts

Investment Frankfurt 2019 2018





Most Important Property Type Office 80% Office 90 %


INVESTMENT

0

2,000

4,000

6,000

8,000

10,000

20192018201720162015

Retail 3%

Building Site 2%

Other 1%

Hotel 10%

Office 80%


Mixed Use 2%

5,6876,143

6,912

9,664

7,843





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Supply and Demand

Office assets once again proved the

strongest asset class on the Frankfurt

market, accounting for roughly 80% of

total transaction volume in 2019. Almost

all of the other asset classes only man-

aged to generate single-digit market

shares due to limited supply. Hotel assets

were the only exception with a 10% share,

or around €795m. These results can pri-

marily be attributed to the two Hilton

hotels at THE SQUAIRE and the NH Col-

lection Hotel under construction at Güter-

platz at THE SPIN.

2019 was also characterized by ongoing

lively activity on the part of foreign inves-

tors who accounted for just shy of €4bn,

or a share of over 50%. Foreign investors

proved even more dominant in terms of

high-volume deals for over €100m,

accounting for a 68% market share in that

segment. Thanks to high liquidity and

favorable market conditions, investors

from South Korea were particularly active

buy-side, preferring core and core+ big

tickets.

Asset/fund managers were the most

active seller group, generating €2.7bn, or

a 35% market share. They managed to

outperform open-ended real estate funds

and special funds, which had come out on

top in the previous year. Listed property

companies claimed third place with a

share of 14%. Asset/fund managers were

the most active sell-side as well, posting

the highest transaction volume of €1.5bn

and almost tripling their transaction vol-

ume yoy. Opportunity funds and private

equity funds came in second with roughly

€1.4bn.

yields

Prices for office assets rose throughout

the market over the course of the year.

Gross prime yields for office assets in

Frankfurt’s top locations came to 3.00%

at the end of 2019, down 30 bps yoy. The

yield gap between prime and secondary

locations continued to close thanks to the

40-bps drop in prime yields to 3.50%

posted in secondary locations. Office

assets saw the steepest price increases

in peripheral locations, with yields post-

ing a low 4.35% at year-end. This reflects

a yoy decrease of 55 bps.

0 1,000 2,000 3,000

Other Investors



Property Developers



35%

0 1,000 2,000 3,000

Other Investors

Insurance Companies





21%

14%

9%

7%

14%

19%

18%

16%

9%

8%

30%



0 1,000 2,000 3,000

Other Investors



Property Developers



35%

0 1,000 2,000 3,000

Other Investors

Insurance Companies





21%

14%

9%

7%

14%

19%

18%

16%

9%

8%

30%

39FraNkFUrT

| 2019 / 2020 C

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Yields for logistics and hotel assets took

another tumble to 4.20% and 3.75%,

respectively, down 30 bps and 25 bps as

at year-end.

Summary and Outlook

Market activity in 2019 reflected the ongo-

ing popularity of the Frankfurt investment

market, which continues to benefit from

economic and political stability. The mar-

ket was able to continue the previous

years’ excellent performance in 2019,

particularly in light of its popularity with

foreign investors and the current upward

price trend.

With the pipeline currently well-stocked

with a number of high-volume deals, we

are likely to see another high transaction

volume in 2020 mainly thanks to the cur-

rently stable economic conditions and a

strong office leasing market. This trend

will also be supported by rising property

prices with the gap between yields for

assets in a variety of locations continuing

to close. Based on these factors, we can

again expect to see above-average trans-

action volume in 2020 at around €7.5bn.

Rising rents and growing scarcity of space in many submarkets have further spurred the already high demand on the Frankfurt investment market.

CONTACT Laura Müller Associate Director | Research






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CITY FACTS HAMBURGPopulation in 1,000 1.841


996



Fast Facts

Office Leasing Hamburg 2019 Change year-on-year








Submarket Prime Rent Average RentCity 29.00 22.50HafenCity 26.00 20.00Harbour Fringe 23.50 21.00Alster West 24.00 18.20Alster East 24.00 17.00St. Georg 20.00 17.20City South 16.00 12.60St. Pauli 23.50 19.50Altona 18.00 14.70Bahrenfeld 16.00 12.90Eimsbüttel 15.50 12.80Eppendorf 16.50 13.50Airport 13.00 10.10City North 16.00 11.20Barmbek 16.50 12.10Wandsbek 15.00 9.40Harburg 15.50 12.00Hamburg East 18.00 12.80Hamburg West 15.00 10.60

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Take-up

Hamburg posted office take-up results of

535,400 sqm in 2019, down 5% yoy but

exceeding the 10-year average by 5%. The

lively activity seen in 2018 continued into

2019 with take-up remaining high thanks

to ongoing strong demand. The result,

however, did slow somewhat in 2019 for

the second year in a row.

This rather average annual result can be

attributed to a modest Q4, which only

posted 104,200 sqm in take-up, combined

with the absence of large-scale leases

signed for over 10,000 sqm of office

space in the second half of the year. Ham-

burg University, the OTTO Group, XING

and Vattenfall signed four large-scale

leases in H1, each for over 10,000 sqm.

The largest deal of H2 was the Lichtblick

lease signed for around 8,400 sqm at the

ConneXion property development.

Despite increasingly scarce supply, the

City submarket remained the most popu-

lar office location with 123,500 sqm in

take-up. The majority of leases signed in

the submarket involved smaller units of

less than 1,000 sqm. Hamburg East came

in second with 70,000 sqm in take-up. ICT

companies claimed the largest share of

take-up with 14%, followed by educational

institutions with 13%.

0

100

200

300

400

500

600

201920182017201620150

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100

150

200

20212020201920182017


460490

584

497 488

8057 39

67 47

132

97100

175

132

190

150


OFFICE LEaSING

0

100

200

300

400

500

600

201920182017201620150

50

100

150

200

20212020201920182017


460490

584

497 488

8057 39

67 47

132

97100

175

132

190

150





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rents

Prime rents in Hamburg came to €29.00 per

sqm at year-end, up 7% yoy. Some leases

were even signed for over €30.00 per sqm

at property developments and refurbish-

ment projects in the city center. Weighted

average rents rose yoy by more than 10% to

€17.30 per sqm. This indicates that rents are

rising even faster than in previous years.

Supply and Vacancy

The vacancy rate dropped 110 bps over the

course of the year, down from 3.6% to a

current 2.5%. Only 345,000 sqm was

available for immediate tenancy on the

Hamburg office market at year-end. Ham-

burg City even posted a lower vacancy

rate of 2.0%.

key Developments

Around 190,000 sqm is currently in the

pipeline for 2020. Development activity is

targeting Hamburg City and the west of

Hamburg (Altona and Bahrenfeld sub-

markets). Around two thirds of the space

scheduled for completion in 2020 has

already been pre-leased, which means we

can expect pending new-build comple-

tions to only ease the tight situation on the

market to a very limited extent.

Summary and Outlook

Rents will continue to rise over the course

of the year, putting prime rents at over

€30.00 per sqm by the end of 2020. The

chances of seeing a new record take-up

result in 2020 are slim as the shortage of

supply that was already palpable in 2019 is

going to intensify in 2020. Companies are

assessing their expansion plans more

carefully in light of the somewhat gloomy

outlook for the global economy. We there-

fore expect to see another drop in take-up

in 2020 with results coming in below the

500,000-sqm mark.


0

100

200

300

400

500

600

700

800

2019201820172016201510

15

20

25

30

35

20192018201720162015

25.0026.00 26.00

14.50 15.10

27.0029.00

15.40 15.70 17.30


5.0 %

4.5 %

3.6 %

2.5 %

5.2 %

698 677625

488

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| 2019 / 2020 C

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Transaction Volume

The Hamburg real estate investment mar-

ket recorded a strong 2019 thanks to an

end-of-year rally driven by a large num-

ber of deals. The Hamburg commercial

real estate market posted €4.3bn in trans-

action volume, down 24% compared to

2018’s record high. However, 2019 results

did manage to surpass the 10-year-aver-

age by almost one third, coming in more or

less in line with the 5-year-average.

Several high-volume deals were signed

particularly towards the end of the year

with Q4 pulling in €1.8bn in transaction

volume, or roughly 42% of total transac-

tion volume. Q4 2019 marked the strong-

est quarterly performance ever recorded

in Hamburg. As such, the overall yoy

decrease can particularly be attributed to

a slower first half of the year.


0

1,000

2,000

3,000

4,000

5,000

6,000

20192018201720162015

Building Site 4%


Other 1%

Mixed Use 7%

Retail 10%

Office 71%

Hotel 4%

4,000

4,910

3,410

5,665

4,293

Fast Facts

Investment Hamburg 2019 2018







INVESTMENT

0

1,000

2,000

3,000

4,000

5,000

6,000

20192018201720162015

Building Site 4%


Other 1%

Mixed Use 7%

Retail 10%

Office 71%

Hotel 4%

4,000

4,910

3,410

5,665

4,293





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Supply and Demand

The fact that 2019 fell short of 2018’s

strong performance of over €5.6bn can

primarily be attributed to ongoing limited

supply. Investor interest remains high,

particularly in light of ongoing low inter-

est rates and financing costs. Office

assets remain a particular favorite,

accounting for over €3bn in 2019 and

claiming pole position with 71% of total

transaction volume. High-volume sin-

gle-asset deals in the office segment

included the sale of Edge HafenCity, the

Euler-Hermes new-build headquarters

and the Economic Quarter in the City

South submarket. Retail assets trailed at

some distance, claiming second place at

just under 10%.

Portfolio transactions boosted their mar-

ket share from 24% in 2018 to 36% in

2019, primarily thanks to Commerz Real’s

acquisition of the Millennium portfolio.

The core deal comprised eight Hamburg

office and retail properties, which

changed hands for well over €400m.

Asset/fund managers were the most

active buy-side in 2019, accounting for

24% of total transaction volume.


funds came in second with roughly 18%.

Property developers and development

companies were the most active sell-

side with a share of 30%, or €1.3 bn in

transaction volume. REITs took second

place, parti cularly benefiting from Black-

stone’s acquisition of REIT Dream Glob-

al’s commercial portfolio.

0 400 800 1,200 1,600

Other Investors


Insurance Companies


REITs


0 400 800 1,200 1,600

Other Investors

Property Developers

Insurance Companies




18%

10%

9%

8%

31%

30%

19%

12%

10%

9%

20%



45H

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| 2019 / 2020 C

ity Survey G

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yields

In the wake of the yield compression seen

across all segments in recent years, yield

levels shifted only slightly in 2019. Gross

prime yields for premium office assets

remained stable at 3.20% throughout the

year, while yields for retail assets were

up slightly by 10 bps to 3.30%. In contrast,

prime logistics experienced further com-

pression from 4.50% to 4.20%. Hotel

assets also saw prime yields drop 25 bps

to 3.75% at year-end. Yields in the office

segment remained flat in 2019 in

response to a shortage of prime assets.

Assuming that assets of this caliber

become available in the CBD in 2020, we

can expect prime yields to again drop 20

to 30 bps in light of the current general

economic environment and the fact that

investors remain under considerable

pressure to invest. 2019 already saw

increasing activity in submarket locations

outside traditional office hubs with the

gap between yields in primary and sec-

ondary locations continuing to close. This

trend is expected to continue into 2020.

Summary and Outlook

The yoy drop in transaction volume to

€4.3bn in 2019 can primarily be attributed

to a modest H1 characterized by limited

supply.

This downward trend is likely to see a

reversal in 2020. A lively Q4 generating

the highest quarterly result ever recorded

at €1.8bn confirmed high investor interest

in Hamburg real estate and gives cause to

be optimistic moving forward into 2020.

We can expect transaction volume to sig-

nificantly exceed the 5-year average of

around €4.3bn and even beat out the €5bn

mark as demand remains strong and the

deal pipeline is currently well-stocked.

There is currently no end in sight to prime

yield compression on the Hamburg

investment market as pressure to invest

remains high.

All signs are pointing to a great year on the Hamburg investment market. Limited availability will continue to dictate activity on the office leasing market in 2020.

CONTACT Simon Gstalter Senior Consultant | Research

+49 40 328701-172, [email protected]





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COLOGNE

CITY FACTS COLOGNEPopulation in 1,000 1,086


583



Fast Facts

Office Leasing Cologne 2019 Change year-on-year








Submarket Prime Rent Average RentCity 25.50 18.50Rheinufer 23.00 16.70Deutz 21.50 16.50Cologne-East 15.50 13.10Ossendorf / Niehl 15.50 14.00Ehrenfeld / Braunsfeld 15.50 12.50Cologne-West 12.00 10.00Cologne-North 9.50 8.00Sülz / Lindenthal / Klettenberg 16.50 12.50Cologne-South 12.50 11.10Airport / Porz 12.00 10.40

47COLOGNE

| 2019 / 2020 C

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Take-up

The Cologne office leasing market

(municipal area) recorded 275,000 sqm

in take-up in 2019, down roughly 5% yoy

as well as compared to the 10-year aver-

age. The city recorded 10 major deals

signed for over 5,000 sqm. Supply of

large-scale adjoining space remains

scarce and is mainly limited to property

developments. Stock buildings account-

ed for only two large-scale transactions

in 2019. As a result, property develop-

ments generated 40% of leasing activity.

Their market share was even higher in

the space segment of over 5,000 sqm

with 84%. The Sparkasse Cologne/Bonn

bank signed the largest-scale lease of

the year for over 17,000 sqm at the “kite”

property development in the Ossendorf/

Niehl submarket, also the only lease

signed for over 10,000 sqm.

Demand once again proved well-diversi-

fied despite the supply bottleneck. The IT

sector claimed pole position with a mar-

ket share of 12%, closely followed by busi-

ness centers and consulting firms with

almost 10% each.

The traditionally strong City submarket

(109,000 sqm) dominated market activity

in terms of take-up with the Ossendorf/

Niehl (39,000 sqm), Airport/Porz

(30,000 sqm) and Ehrenfeld/Braunsfeld

(29,000 sqm) submarkets following at

considerable distance.

The space segment of up to 2,000 sqm

experienced a particularly strong

decrease in take-up. While large-scale

tenants have a fallback option in property

developments, companies needing less

space often have no alternative but to

extend their leases at stock buildings.

0

100

200

300

400

20192018201720162015


0

50

100

150

200

20212020201920182017

265

364

274 275 262

3916 28 15 13

152

31

90

5765

173

107


OFFICE LEaSING





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rents

Prime rents in Cologne were up 11% yoy to

€25.50 per sqm at the end of December.

Weighted average rents also recorded an

increase and came to €15.20 per sqm

(+10%) at year-end 2019. This trend can

be attributed to limited supply in the City

submarket. We do not expect the supply

bottleneck to ease in 2020 and predict

further rental growth.

Supply and Vacancy

Vacancy in Cologne continued to drop in

2019 with total vacancy recorded at 2.2%,

down 0.6 percentage points yoy. Large-

scale adjoining stock space of over 1,000

sqm is currently not available in central

locations, forcing potential tenants to

turn to property developments or other

submarkets closer to the city outskirts.

As a result companies will in many cases

be required to start early with the lookout

for space.

key Developments

Roughly 173,000 sqm is scheduled for

completion in 2020, 88% of which has

already been pre-leased. Another 107,000

sqm of office space will be added to the

market in 2021, 76,000 sqm of which still

available for lease. Key developments

include Butzweilerhof in the Ossendorf/

Niehl submarket, in which several devel-

opments are planned in the coming years,

as well as I/D Cologne in the East sub-

market and Messe-City in Deutz.

Summary and Outlook

Take-up on the Cologne office leasing

market in 2019 fell just short of previ-

ous-year results due to limited supply.

With a number of companies still in the

market for large-scale space, we consid-

er 275,000 sqm in total take-up realistic

for 2020. Potential large-scale tenants

will continue to focus on property devel-

opments and both prime and average

rents will continue to rise as a result.



0

100

200

300

400

500

2019201820172016201510

15

20

25

30

20192018201720162015

21.20 21.00 21.50

11.80 11.8512.90

23.00

13.80

25.50

15.20

5.9 %

5.0 %

4.0 %

2.8 %

2.2 %

460

390

314

220

175

49COLOGNE

| 2019 / 2020 C

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Transaction Volume

The Cologne investment market recorded

€3.2bn in transaction volume thanks to

the end-of-year rally, breaking through

the €3bn-barrier for the very first time.

These results reflect a strong yoy increase

of 74%, outperforming the 10-year aver-

age by an impressive 86%. A total of 8

deals for over €100m each were posted in

the past year alone, claiming more than

half of total transaction volume combined.

Notable deals included the sale of the

Stadthaus property for €500m, the sale of

a portfolio comprised of several assets

located at Technologiepark and the sale of

Wallarkaden at Rudolfplatz square for

€140m. Portfolio deals accounted for 32%,

a slightly higher market share than the

previous year’s 25%.

In addition to these major deals, 19 assets

also changed hands in the mid-priced

segment of between €30m and €100m,

setting the tone for lively market activity.

The growing number of minority-share

investments in companies holding large

property portfolios or in their respective

portfolios also contributed to the strong

annual result.


0

500

1,000

1,500

2,000

2,500

3,000

3,500

20192018201720162015

Building Site 4%

Mixed Use 6%

Industrial & Logistics 3%

Retail 8%

Hotel 10%

Office 68%

Other 1%

1,9401,760

2,0001,860

3,240

Fast Facts

Investment Cologne 2019 2018







INVESTMENT

0

500

1,000

1,500

2,000

2,500

3,000

3,500

20192018201720162015

Building Site 4%

Mixed Use 6%

Industrial & Logistics 3%

Retail 8%

Hotel 10%

Office 68%

Other 1%

1,9401,760

2,0001,860

3,240





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Supply and Demand

Fueled by a number of major deals, the

office segment was able to considerably

expand its position as the most popular

asset class with a share of 68% (€2.21bn),

followed by hotels with 10% (€330m).

Retail assets came in 3rd with 8% (€257m).

More than 80% of transaction volume

was generated by assets in the core and

core+ segment.

In terms of location, transaction activity

was dominated by the established City and

Deutz submarkets, which accounted for

more than half of transaction volume with

€1.8bn combined. Commercial assets val-

ued at almost €900m changed hands in

the Ehrenfeld/Braunsfeld and Ossendorf/

Niehl submarkets.

Foreign investors claimed a buy-side

market share of roughly 41% of transac-

tion volume, down 11 percentage points

yoy. However, this reflects an increase of

€360m in absolute terms. Foreign inves-

tors claimed an even higher market share

sell-side with 56%. As such, Cologne

remains particularly popular among for-

eign investors in the high-volume seg-

ment.

Asset/fund managers dominated market

activity buy-side with a market share of

28% and €915m in transaction volume.


funds with access to particularly high

liquidity from private as well as institu-

tional investors followed in the ranks with

23%, or €750m. Asset managers/fund

managers also claimed pole position sell-

side with 26% or over €850m. Property

developers came in 2nd with roughly

€600m in transaction volume (19%).

0 400 800 1,200

Other Investors

Insurance Companies

REITs


Property Developers


28%

0 400 800 1,200

Other Investors

Pension Funds





23%

19%

8%

6%

16%

26%

19%

15%

12%

6%

22%



0 400 800 1,200

Other Investors

Insurance Companies

REITs


Property Developers


28%

0 400 800 1,200

Other Investors

Pension Funds





23%

19%

8%

6%

16%

26%

19%

15%

12%

6%

22%

51COLOGNE

| 2019 / 2020 C

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yields

Prime office yields were already down

50 bps in 2018. This trend continued in

line with current investment market

dynamics with another drop of 45 bps in

2019 to a current 3.30% for premium

office assets in the City submarket. This

means that prime office properties in

Cologne are currently changing hands at

the same yields as similar assets in Düs-

seldorf. Prime yields nevertheless appear

to have almost bottomed out. Yield com-

pression has also accelerated in locations

outside the City submarket, primarily in

the wake of limited supply of prime

assets. This trend is likely to continue in

2020.

Summary and Outlook

Driven by several large-scale transac-

tions, the Cologne investment market

posted a new all-time high in 2019. Major

deals in the office segment particularly

contributed to this result. Although

asset/fund managers dominated market

activity sell-side as well as buy-side,

Cologne nevertheless continues to boast

a well- diversified supply and demand

structure. Cologne also remained popu-

lar with foreign investors in 2019. The

stable office leasing market with its

upside potential in terms of rents and

low vacancy risk creates a solid basis for

establishing investor trust.

In addition to the traditionally highly popu-

lar City submarket, the submarkets locat-

ed along the right bank of the Rhine River

will see particularly strong activity going

forward due to upcoming property devel-

opments. Despite ongoing high demand,

we do not expect the Cologne investment

market to match this new record result in

2020 in light of limited supply. However,

with the development pipeline full, we

once again expect to see several forward

deals signed in 2020. Combined with a

number of deals already approaching

marketing phase, we expect 2020 to bring

in another above-average transaction vol-

ume of around €2.5bn.

The Cologne investment market exceeded all expectations and posted a new record result with €3.2 bn in transaction volume.

CONTACT Bastian Hallen Consultant | Research

+49 221 986537-31, [email protected]





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CITY FACTS MUNICHPopulation in 1,000 1,472


897



Fast Facts

Office Leasing Munich 2019 Change year-on-year





Vacancy Rate 2.2% 40 bp



Submarket Prime Rent Average RentCenter 42.00 31.50Center NW 36.50 30.60Center NE 35.50 26.80Center SE 31.00 22.70Center SW 30.00 20.50City NW 27.50 20.40City NE 30.00 19.60City SE 26.00 15.60City SW 25.00 17.40Periphery SW 17.70 12.50Periphery NW 14.00 12.00Periphery NE 16.90 12.70Periphery SE 17.50 11.30

53M

UNICH | 2019 / 2020

City S

urvey Germ

any | Colliers International

Take-up

Activity on the Munich office leasing mar-

ket was calmer in 2019 compared to pre-

vious years with take-up down 21% yoy to

770,400 sqm. Take-up results excluding

owner-occupiers fell 34% to 627,200

sqm. Although the economic slowdown in

Germany was reflected in more limited

demand for office space in Munich, take-

up still managed to exceed the 10-year

average. This drop in demand affected all

space segments, particularly the large-

scale segment of over 5,000 sqm where

results were down 30% to 274,300 sqm.

Companies from the IT sector were

involved in the majority of the leases

signed for office space, putting their take-

up results down only slightly from 2018

levels. The IT sector contributed almost

one third to total take-up as a result. Busi-

nesses from the manufacturing industry

came in second, accounting for a share

of 18%. In contrast, consulting firms post-

ed their weakest leasing result since

2003 with their market share down to 9%.

rents

Average rents climbed to €20.10 per sqm

(+6%) over the course of the year,

exceeding €20.00 per sqm for the very

first time. Tenants looking for space with-

in city limits were confronted with rents

of €22.80 per sqm on average, up 10%

yoy. No large-scale leases were signed

for space at new-builds located in the city

outskirts and average rent there fell 4%

to €12.30 per sqm. Prime rents were up

10% yoy in contrast to a current €39.50

per sqm.

Supply and Vacancy

The vacancy rate saw a slight increase

from 1.8% to 2.2% over the course of 2019

with 489,400 sqm available for immediate

tenancy. However, this increase has had

no effect on the overall supply bottleneck

in Munich. Around 218,100 sqm, or 1.3%,

of stock space was vacant within city lim-

its while vacancy in the outskirts came to

4.4% or 271,300 sqm. New-build space

0

200

400

600

800

1,000

20192018201720162015


0

100

200

300

400

500

20212020201920182017

653730

785

944

627

10450

199

35

143

238205

164138

416

309

365


OFFICE LEaSING





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and space in property developments

approaching completion continue to be in

high demand. All of the new office space

that was added to the market in 2019 has

now been almost fully absorbed and even

77% of the space scheduled for comple-

tion in 2020 has already been pre-leased.

key Developments

The east of Munich remains a hot spot for

office development. Bavaria Towers,

which features around 60,000 sqm of

office space, was recently completed and

is now almost fully let. Properties cur-

rently under construction in the Berg am

Laim district include Die Macherei and

New Eastside Munich. Several property

developments are lined up in the Werksvi-

ertel district and are already meeting with

high tenant demand. The Obersendling

district in the south of Munich, which saw

activity slow in recent years, is again

attracting increasing attention from prop-

erty developers. The location will see a

significant upgrade over the next few

years thanks to a number of new-builds

and refurbishments of older stock build-

ings.

Summary and Outlook

Munich remains a landlord’s market even

though activity on the leasing market

slowed somewhat in 2019. We anticipate

further rental growth due to ongoing

scarce supply as construction activity will

not be enough to significantly ease the

current situation on the market. We also

expect companies looking for space to

remain hesitant in the first half of the

year. Despite several large-scale deals

currently in the pipeline, the Munich mar-

ket is likely to see another calm year in

2020 with take-up coming in at around

700,000 sqm.



0

200

400

600

800

1,000

201920182017201620155

15

25

35

45

20192018201720162015

33.3035.00 35.60

16.30 16.00 17.30

36.00

19.00

39.50

20.10

3.8 %

3.0 %

2.4 %2.2 %

1.8 %

874

688

536

411489

55M

UNICH | 2019 / 2020

City S

urvey Germ


Transaction Volume

The Munich market posted a new record

result in commercial transaction volume

at roughly €10.9bn. Q4 alone accounted

for more than half of total transaction vol-

ume, with commercial properties chang-

ing hands for €5.6bn. Overall, transaction

activity outperformed the previous year’s

already strong result by 67% and exceed-

ed the 10-year average by an impressive

140%. High-volume single-asset deals,

some of which went for significantly more

than €300m, and large-scale portfolio

deals were the main drivers behind this

strong take-up result. As such, Munich

remains one of the most sought-after

European markets among real estate

investors and will maintain its popularity

in 2020. Although investors would have

been willing to pour more capital into the

market, the supply bottleneck prevented

them from doing so. We can expect

increased construction activity to bring

more investment opportunities involving

new-builds and property developments to

the market.


0

2,000

4,000

6,000

8,000

10,000

12,000

20192018201720162015

Mixed Use 6%

Industrie/Logistik 5%

Retail 4%

Building Site 5%

Hotel 6%

Office 74%

5,850

6,8606,170 6,531

10,904

Fast Facts

Investment Munich 2019 2018







INVESTMENT

0

2,000

4,000

6,000

8,000

10,000

12,000

20192018201720162015

Mixed Use 6%

Industrie/Logistik 5%

Retail 4%

Building Site 5%

Hotel 6%

Office 74%

5,850

6,8606,170 6,531

10,904





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Supply and Demand

Demand for office properties remains

particularly high, with this asset class

claiming 74% of total volume and sur-

passing other usage types by a significant

margin. Mixed-use properties and hotels

trailed behind with €660m and €640m in

transaction volume, respectively. More

than 20 office deals were signed for over

€100m, including 4 single-asset deals for

more than €300m each. The highest-vol-

ume properties to change hands in 2019

included Tucherpark, the Die Macherei

new-build business district and Kuster-

mann Park close to the Werksviertel

district. The exclusive Lenbach Gärten

property went for somewhere in the mid-

9-figure range close to year-end. H1 saw

the sale of the LUDWIG stock building in

the city center to a private investor. The

city outskirts also set the stage for sever-

al high-volume deals. The sale of Agrob

Medienpark in Ismaning and Sky head-

quarters in Unterföhring both reflect

growing demand in locations outside the

city center.

Almost 25% of the transaction volume

buy-side was generated by open-ended

real estate funds and special funds, which

continue to benefit from access to large

amounts of capital. Asset/fund managers

followed in the ranks with around 15% and

opportunistic investors and pension

funds claimed roughly 11% each.

Foreign investors posted a slight yoy

increase in market share to a current

39%. The sources of capital among for-

eign investors proved highly diversified

as well. The US (39%) and the UK (16%)

contributed the lion’s share to the trans-

action volume generated by foreign inves-

tors. Asian investors accounted for 14%,

closely followed by investors from the

Middle East with 13%.

yields

The combination of high liquidity, easy

access to cash, negative interest rates

and sustainable rental growth contributed

to a further drop in yields. Prime yields

decreased by another 25 bps over the

0 1,000 2,000 3,000 4,000

Other Investors


Banks

Insurance Companies



0 1,000 2,000 3,000 4,000

Other Investors

Property Developers

Pension Funds




15%

11%

11%

10%

28%

23%

13%

12%

11%

9%

32%



0 1,000 2,000 3,000 4,000

Other Investors


Banks

Insurance Companies



0 1,000 2,000 3,000 4,000

Other Investors

Property Developers

Pension Funds




15%

11%

11%

10%

28%

23%

13%

12%

11%

9%

32%

57M

UNICH | 2019 / 2020

City S

urvey Germ


course of the year to 2.75% at year-end

with further compression possible. Prime

yields were not only recorded in the city

center but also at high-end property

developments in established locations

along the Mittlerer Ring central ring road.

Yield compression has also reached the

Munich outskirts with some high-end and

well-let office buildings going for less

than 4.50%.

Other asset classes are also seeing ongo-

ing yield compression. Industrial and

logistics recorded prime yields of 4.30%

and hotels registered another drop in

prime yields, down 5 bps to 3.70%.

Summary and Outlook

Munich remains Germany’s most expen-

sive office market with the lowest yields.

As long as yields for real estate assets

remain favorable compared to secure

investment options, further yield com-

pression to low levels would come as no

surprise. Despite the office leasing mar-

ket posting a weaker result due to unfa-

vorable economic conditions, we do not

see signs of the boom on the Munich mar-

ket faltering as we enter the new decade.

Inspired by the overall conditions on the

capital and investment markets, investors

are increasingly placing their focus on

yield-generating real estate investments

and Munich continues to be a popular des-

tination. However, the lack of supply will

prove a limiting factor despite increasing

development activity and may prevent the

market from reaching another all-time

record take-up result. We nevertheless

expect numerous high-volume invest-

ment opportunities to materialize and

new products to enter the market, with

transaction volume finishing out 2020 in

the realm of €7bn, once again significant-

ly exceeding the long-term average.

We expect activity on the leasing market to pick up in the second half of the year and the boom on the investment market to continue unabated.

CONTACT Tobias Seiler Director | Research






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CITY FACTS STUTTGARTPopulation in 1,000 635


426



Fast Facts

Office Leasing Stuttgart 2019 Change year-on-year

Office Space Take-up 312,100 sqm 44.4%







Submarket Prime Rent Average RentCity 24.00 19.70Center 20.00 16.80Zuffenhausen / Feuerbach 16.50 16.20Weilimdorf 15.50 15.30Bad Cannstatt / Wangen 19.00 16.20Vaihingen 17.50 15.30Degerloch 19.90 19.90Möhringen 15.00 14.10Fasanenhof 16.00 13.70Leinfelden-Echterdingen 17.00 13.30

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Take-up

The Stuttgart office leasing market

(including Leinfelden-Echterdingen) was

once again characterized by high demand,

exceeding the previous year’s result by

roughly 44% with 312,100 sqm in take-up.

This reflects the second-highest result

ever recorded in the capital of Baden-

Wurttemberg, also taking into account the

strong previous years. This impressive

result can mainly be attributed to a num-

ber of large-scale deals, almost exclu-

sively limited to peripheral city districts.

In Q3 the State of Baden-Wurttemberg

acquired a building encompassing 27,200

sqm in the Stuttgart-Feuerbach district

as an owner-occupier. Vector Informatik

signed a lease for around 25,000 sqm in

the Stuttgart-Weilimdorf district and Sie-

mens took up another 20,000 sqm at the

Campus Urbanic property development in

Stuttgart-Zuffenhausen. Owner- occupiers

claimed a relatively low market share at

around 32,900 sqm, putting take-up

excluding owner-occupiers at 279,200

sqm, just shy of 2016’s record result of

297,900 sqm. With a total of 214 leases

signed, activity levels remained average

as in the previous year. Consulting firms

were particularly active in 2019 with 44

leases signed, primarily for smaller units

near the city center. IT firms were next in

line with 27 leases signed. For the first

time since 2012, companies from the

manufacturing sector failed to claim pole

position in terms of take-up, registering a

total 65,400 sqm. Public administration

snatched 1st place in the ranks instead,

achieving a new record take-up result for

the sector at 82,500 sqm.

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OFFICE LEaSING

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rents

Rents continued their upward trend in

2019. Average rents climbed to a new all-

time high of €16.60 per sqm. Overall, the

lion’s share of leases signed (133,800

sqm) featured rents ranging from €15.00

per sqm to €20.00 per sqm. Prime rents

could not quite keep up with the trend

seen in average rents, maxing out at

€24.00 per sqm at year-end. This result

can primarily be attributed to limited sup-

ply of high-priced rental space.

Supply and Vacancy

While vacancy leveled out in the past two

years at a rate of just over 2%, it dropped

below this threshold in 2019 for the first

time in 18 years to 1.9% at year-end 2019.

With stock at roughly 8 million sqm, only

149,600 sqm of space was available as at

31 December 2019.

key Developments

Property developments did little to ease

the situation supply-side in 2019. Although

a total of more than 88,000 sqm of office

space was completed, the majority of it

had already been pre-leased. Most of the

space at property developments sched-

uled for completion in the next couple of

years has already be pre-leased as well.

As in previous years, development activi-

ty will continue to focus peripheral sub-

markets where developers are able to find

space to build.

Summary and Outlook

The past year was characterized by sig-

nificant excess demand for office space.

This can particularly be seen in the cur-

rent rent trend, with rents at record levels

in most submarkets. We do not expect the

tight supply situation to ease anytime

soon, particularly in light of high pre-leas-

ing rates at property developments. This

trend will continue to boost rents in 2020.



0

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400

2019201820172016201510

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20192018201720162015

22.80 23.0024.30

12.1013.00 13.40

23.0024.00

14.00

16.603.5 %

2.8 %

2.1 % 2.3 %1.9 %

270

219

165185

150

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Transaction Volume

The Stuttgart real estate investment mar-

ket once again recorded above-average

results, generating a commercial transac-

tion volume of almost €1.8bn in 2019.

Investments in residential assets

accounted for an additional €160m. This

excellent result can be attributed to

numerous high-volume single-asset

deals and a large number of transactions

(72), almost on par with the above-aver-

age transaction activity seen in the previ-

ous year (75 deals signed). Q4 contribut-

ed the lion’s share with more than half a

billion euros in transaction volume. How-

ever, 2019 commercial transaction vol-

ume still fell short of the previous year’s

record high of over €2.2bn due to limited

supply.

Supply and Demand

Investor demand was high across most

asset and risk classes with office (50%)

claiming by far the largest share in terms

of transaction volume. Demand on the

office market continues to be boosted by

rising rents. The Stuttgart office market is

also currently undergoing a transitional

phase in terms of layout preferences and


0

500

1,000

1,500

2,000

2,500

20192018201720162015

Mixed Use 13%

Building Site 4%

Retail 22%

Hotel 11%

Office 50%

1,695

1,913

1,200

2,206

1,755

Fast Facts

Investment Stuttgart 2019 2018







INVESTMENT GEWErBEIMMOBILIEN

0

500

1,000

1,500

2,000

2,500

20192018201720162015

Mixed Use 13%

Building Site 4%

Retail 22%

Hotel 11%

Office 50%

1,695

1,913

1,200

2,206

1,755





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higher fitout standards. As a result,

value-add investments have become

highly sought-after by German and for-

eign investors alike in addition to the

already popular and less risky core and

core+ assets.

Investment activity in retail assets over

the past year can be described as selec-

tive and hesitant compared to the office

segment. Nevertheless, retail still man-

aged to contribute a relatively high share

to transaction volume with 20% thanks to

the high-volume acquisition of the down-

town shopping center Königsbau-Passa-

gen. The deal was the largest recorded in

2019 with a purchase price of around

€280m. Hotel assets also claimed a con-

siderable share in total transaction vol-

ume with seven 3-star and 4-star hotels

changing hands for a total of €190m,

including the brands Ibis Styles, Niu and

AcomHotels.

2019 was characterized by above-aver-

age foreign investor activity with a market

share of over 50%, which can be attribut-

ed to the high volume generated by sin-

gle-asset deals involving this investor

group. A total of 3 deals involving com-

mercial properties were signed in the

9-figure range.

The core and core+ segments in particu-

lar have been seeing a trend toward loca-

tions outside of Stuttgart for some time

now. This focus on cities such as Lein-

felden-Echterdingen, Böblingen, Essling-

en and Ludwigsburg can be traced back to

the severe shortage of suitable invest-

ment opportunities on the Stuttgart mar-

ket. Many German and foreign investors

consider the Stuttgart region a strong

economic center and therefore an attrac-

tive investment location. Examples

include the recent acquisition of the Ger-

man Thales headquarters in Ditzingen by

Italian investor Antirion for just shy of

€245m in Q4 2019. The price on the deal

was raised several times and the deal rep-

resents this investor’s second high-vol-

ume transaction of the year. In total,

Antirion invested more than €500m in the

region in 2019.

0 200 400 600

Other Investors

Property Developers


Insurance Companies


REITs19%

0 200 400 600

Other Investors

Property Developers




Insurance Companies

18%

18%

10%

8%

27%

20%

18%

14%

9%

8%

31%



0 200 400 600

Other Investors

Property Developers


Insurance Companies


REITs19%

0 200 400 600

Other Investors

Property Developers




Insurance Companies

18%

18%

10%

8%

27%

20%

18%

14%

9%

8%

31%

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yields

Ongoing high demand on the Stuttgart

real estate investment market across all

asset and risk classes combined with

insufficient supply caused yields to

remain low over the past twelve months.

At year-end 2019, prime yields were

recorded at 3.30% for office assets and

downtown buildings featuring a retail-of-

fice mix and at 4.20% for modern logistics

assets.

Summary and Outlook

With the financial markets and, therefore,

the investment market continuing to enjoy

favorable overall conditions, we can par-

ticularly expect the office segment to

remain a seller’s market and for yields for

premium properties to remain low. The

potential negative effects of the economic

slowdown in the manufacturing sector on

the office leasing markets will not have a

significant impact on the investment mar-

ket in light of the lack of investment

options, historically low office vacancy

and ongoing office demand from multiple

sectors established in the region. The drop

in demand for office space coming from

the industrial sector in 2019 was more

than compensated by demand from public

administration and the IT sector. With a

high share of older stock properties com-

pared to the German average, the Stuttgart

office market continues to hold attractive

investment opportunities, also in the val-

ue-add segment. We expect 2020 transac-

tion volume to match the previous year’s

result.

Strong excess demand on the Stuttgart office leasing market has created a favorable investment environment.

CONTACT Alexander Rutsch Senior Consultant | Research

+49 711 22733-395, [email protected]





64

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Take-up of SpaceTake-up of space is the sum of all spaces

either newly let, sold to owner-occupiers,

or built for or by an owner-occupier with-

in the period under consideration. The

salient date is that on which the lease or

purchase agreement is signed. The

renewal of an existing lease is not count-

ed in the take-up of space.

Leasing PerformanceLeasing performance reflects take-up

excluding owner-occupied space.

Prime RentThe premium rent represents the median

of the top 3 % of new lets (not counting

owner-occupiers) during the 12 months

just ended.

Average RentThe average rent is calculated by taking

the individual rents agreed to in all new

leases, weighting them by the amount

of space rented and computing the mean

value.

VacancyVacancy is defined as all office

space available for occupation within

three months.

Prime YieldsPrime yields are the best return that can

be realized for a property of highest

quality and in the best location when

leased under usual market conditions

(highly solvent tenant). The figures here

are gross yields.

CompletionsNew-build space and space listed on

the market after a renovation period of

at least 12 months is included in total

available office space for the quarter in

which the development or renovation

was completed. In regards to expansion

or the addition of floors, only the amount

of new additional space is included.

GLOSSARY

67CONTaCTS / LOCaTIONS

| 2019 / 2020 C

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BerlinBudapester Straße 50

10787 Berlin

Phone +49 30 202993-0

DüsseldorfKönigsallee 60 C

(Entrance Grünstraße)

40212 Düsseldorf

Phone +49 211 862062-0

FrankfurtThurn-und-Taxis-Platz 6

60313 Frankfurt am Main

Phone +49 69 719192-0

HamburgBurchardstraße 17

20095 Hamburg

Phone +49 40 328701-0

CologneKaiser-Wilhelm-Ring 15

50672 Köln

Phone +49 221 986537-0

LeipzigMarkgrafenstraße 2

04109 Leipzig

Phone +49 341 2182990-0

MunichDachauer Straße 63

80335 München

Phone +49 89 624294-0

NurembergAm Tullnaupark 15

90402 Nürnberg

Phone +49 911 462795-0

StuttgartKönigstraße 5

70173 Stuttgart

Phone +49 711 22733-0

Photo credits

Front page : Nextower, Getty Images International

Berlin : Mediaspree, Colliers International, Thomas Rosenthal

Düsseldorf : Medienhafen, Fotolia

Frankfurt : EZB, Jannik Selz on Unsplash

Hamburg : Speicherstadt, Cristina Gottardi on Unsplash

Cologne : Kranhäuser, shutterstock – r.classen

Munich : Altstadt, Thinkstock, Michael Abid

Stuttgart : Königstraße, Getty Images – Westend61

CONTACTS / LOCATIONSMatthias Leube MRICSCHIEF EXECUTIVE OFFICER

[email protected]

Ulf Buhlemann FRICSHEAD OF PORTFOLIO

INVESTMENT & ADVISORY

[email protected]

Dirk Hoenig-OhnsorgHEAD OF RETAIL INVESTMENT

[email protected]

Christian Kadel FRICSHEAD OF CAPITAL MARKETS

[email protected]

Susanne KieseHEAD OF RESEARCH

[email protected]

Peter Kunz FRICSHEAD OF INDUSTRIAL &

LOGISTICS

[email protected]

René-P. SchappnerHEAD OF HOTEL

[email protected]

Wolfgang SpeerHEAD OF OFFICE &

OCCUPIER SERVICES

[email protected]





Colliers InternationalDeutschland GmbHThurn-und-Taxis-Platz 660313 Frankfurt

CONTACT

RESEARCH

Susanne KieseHead of Research | Germany+49 211 86 20 [email protected]

Copyright © 2020 Colliers International Deutschland GmbH

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