Stuttgart Investment Market 2016/2017

PRIVATBANK
PRIVATE IMMOBILIEN
REAL ESTATE
FUNDS & ASSET
The Stuttgart Investment Market
2016/2017.
With Market Trends for Munich.

Contents.
Stuttgart
Market Trends .............................................................................................3
Key Figures....................................................................................................4
Outlook for 2017..........................................................................................6
Your Contact Partners..................................................................................7
Munich
Market Trends..............................................................................................8
ELLWANGER & GEIGER Real Estate........................................................10
German Property Partners.......................................................................11
Photo Source Cover: Stefan Schilling

New Record High in Stuttgart.
Top-3-deals
SchwabenGalerie: Swiss life has acquired this shopping centre from Deutsche Fonds
Holding (DFH) for a purchase price between 120 and 130 million euros.
CityGate: As part of a share deal, Eastern Property Holding (EPH) acquired 94% of the
property company for around 110 million euros.
Telekom-Areal: J.P. Morgan Asset management paid around 95 million euros to New
Star for this office complex in Stuttgart.
Photo Source: Stefan Schilling
Investor Focus on Office Property.
With a transaction volume of 2 billion
euros in 2016, the property investment
market in Stuttgart has surpassed
the record year 2015. Regarding
transaction volume, 2016 has actually
been the strongest year ever. Only in
2007 and 2015 could similar results
be achieved. In fact, the transaction
volume of 2015 was exceeded by 200
million euros or 11.1 per cent. With
this new record high, the 1 billion
euro mark has been broken for the
fifth consecutive year. While the first
three quarters in 2016 were rather balanced
with a volume of around 350
million euros, the final quarter came
to be the most successful ever with
about 900 million euros in transaction
volume.
In total, 80 transactions were concluded
in 2016. Around 40 per cent of
the prices ranged in the single-digit
millions.
During the reporting period, investors
showed an increased interest in
office property. This asset class alone
accounted for around 65 per cent of
the total investment volume – not
least due to the top sales of “City
Gate”, “Europe Plaza” and “City Plaza”.
Retail property achieved a share of
ca. 11 per cent, followed by plots and
development projects and residential
property with around 9 per cent each.
Buyers were predominantly open-ended
funds and German Special Funds
with around 36 per cent, as well as
opportunity funds and equity funds
with about 24 per cent of the total
transaction volume. Private investors
and family offices, as well as insurances
and pension funds accounted for
8 per cent of transactions in 2016,
followed by property developers and
asset managers each generating 7 per
cent of the transaction volume.
On the vendor side, project developers
dominated the market with a
share of 33 per cent.
REITs (Immobilien-AG´s) were also
very active on the market creating a
turnover of 15 per cent. They were
followed by private vendors and family
offices accounting for 10 per cent
and closed funds with around 9 per
cent of the transaction activities in
2016.
While the share of foreign investors
had been relatively low in 2015 with
only 16 per cent, this figure rose on
the buyer side to around 49 per cent –
mainly as a result of the selling of the
IVG subsidiary Officefirst to Blackstone.
As vendors foreign market players
made a relatively small contribution
with just 17 per cent of the property
sold in 2016.
Fully let office property at inner city
locations reached multipliers of up to
26.0, which corresponds to a gross initial
yield of ca. 3.8 per cent. For high
street property, multipliers of up to
28.5 (3.5% gross initial yield) could be
achieved. Long-term, fully let office
property in city fringe and peripheral
locations gained multipliers between
17 and 21 (approx. 5.9 to 4.75 % gross
initial yield).
The Stuttgart property investment
market continues to perform on a
very high level. Initial forecasts from
the beginning of 2016, calling for
roughly 1.5 billion euros in transaction
volume, were clearly surpassed. A
major factor for the record result was
the fact that the sale of Officefirst to
Blackstone included three large scale
commercial properties in Stuttgart.
I 3

Transaktionsvolumen/Renditenüberlick I 4
Key Figures.
Transaction Volume Stuttgart* in bn euros
0.50
1.00
1.15
1.20/1.60**
2.00
1.80/2.45**
2010 2011 2012 2013 2014
2011
2012
2013
2014
2015
2016
* included Leinfelden-Echterdingen
** including residential portfolios
Top Yields for Commercial Property in Stuttgart in %
4.60 5.50 7.50
7.50
5.25
4.60
4.60 5.25 7.00 7.50
4.25 5.00 6.80 7.25
4.25 4.50 5.70 6.25
3.50 3.80 5.50 5.80
8.00
Logistics
Retail Centres
Office
Highstreet
2011 2012
2013
2014
2015 2016
Source of both illustrations: Research ELLWANGER & GEIGER Real Estate GmbH ©, 31.12.2016
4 I

9 %
5 %
1 %
5 I Nutzungsarten/Käufer-/Verkäufergruppen
Key Figures.
Photo Source: Stefan Schilling
Transaction Volume by Asset Class in %
Hotel
Others
Residential
Plots/ Development
Projects
9 %
65 %
Office
Retail
11 %
Transaction Volume by Buyer in %
Pensions Funds/Insurances
Opportunity Funds/
Equity Funds
24 %
8 %
8 %
Private Investors/
Family Offices
7 %
Property Developers
Open-ended Funds/
Special Funds
36 %
3 %
4 %
5 %
Corporates/Owner-Occupiers/
Non-Properties
Banks
Transaction Volume by Vendor in %
1 %
2 %
2 %
Closed Funds
Property Holders
REITs
Public Institutions
Corporates/Owner-Occupiers/
Non-Properties
Pensions Funds/Insurances
Open-ended Funds/Special Funds
Property Holders
8 %
8 %
5 %
Opportunity Funds/
Equity Funds
Public Institutions
Others
2 %
4 %
2 %
4 %
9 %
10 %
Closed Funds
Private Investoren/Family Offices
Property Developers
33 %
15 %
REITs
Source of all illustrations: Research ELLWANGER & GEIGER Real Estate GmbH ©, 31.12.2016
I 5

Outlook for 2017.
For the year 2017, continuing high dynamics
can be expected on the property
investment market in Stuttgart. As the
economic environment in the Stuttgart
region remains very positive, Stuttgart
will continue to be an attractive location
for property investments in the future.
The Stuttgart property market stands for
a low volatility in one of the strongest
economic regions in Europe. Therefore,
it comes as no surprise that the willingness
to invest here is undiminished. As
a result of this high demand, returns on
property investments are expected to
consolidate on a rather low level. The
limited supply of Core property will trigger
an increased demand for Core-plus
and Value-added products.
In consideration of these market conditions,
a comparable transaction volume
as in 2016 cannot be assumed again
for 2017. Nonetheless, we expect a
high level of transaction activity on the
Stuttgart property market and an overall
transaction volume of 1.5 billion euros.
6 I
Photo Source: Stefan Schilling

Your Contact Partners.
In the property investment business,
long-standing experience, strategic
thinking and utmost discretion are indispensable
assets. When it comes to
commercial property in Germany, you
can count on our own market research,
our professional transaction management
and our deep market knowledge.
Our team in Stuttgart looks forward to
your call or visit.
You can reach us at:
Phone +49 711/2148-286
or Fax +49 711/2148-290.
Find us on the internet:
www.ellwanger-geiger.com
Björn Holzwarth
Managing Director
Phone +49 711/2148-192
Bjoern.Holzwarth@ellwanger-geiger.de
Simone Wiedmann
Consultant Investment
Phone +49 711/2148-375
Simone.Wiedmann@ellwanger-geiger.de
Michael Linden
Consultant Investment
Phone +49 711/2148-205
Michael.Linden@ellwanger-geiger.de
Tobias Schneider
Consultant Investment
Phone +49 711/2148-105
Tobias.Schneider@ellwanger-geiger.de
Stefan Knödler
Consultant Investment
Phone +49 711/2148-196
Stefan.Knoedler@ellwanger-geiger.de
Penelope Vlahu
Sales Assistent
Phone +49 711/2148-286
Penelope.Vlahu@ellwanger-geiger.de
Limitation of liability
This study has been drawn up with the greatest care. We must however ask you to be understanding of the fact that we cannot admit any liability for the
correctness of the estimates given here.
I 7

Market Trends - Munich.
Top-3-deals
HighLight Towers: In the fourth quarter, CommerzReal acquired the office landmark
from a fund subsidiary of KanAm for around 500 million euros.
Campeon: Ganeba sold this office campus to Infineon for approx. 300 million euros.
Baywa.Tower: WealthCap paid ca. 280 million euros to Baywa/Competo for this office
highrise.
A superb final spurt facilitated a record
year on the Munich investment market.
The very high turnover of the previous
year could be surpassed again in 2016. In
sum, commercial property to the value
of around 6.4 billion euros has been
transferred in the Bavarian state capital.
Compared to 2015, this corresponds to
an increase in sales of just under 19 per
cent. 17 larger scale deals with a selling
volume of more than 100 million euros
each, some of them significantly higher,
accounted for a share of approximately
54 per cent of the total transaction volume.
Office property has remained the most
sought-after asset class in 2016, contributing
to circa 74 per cent of the turnover
on the Munich investment market.
Compared with the second half of
2016, the first two quarters were rather
held back. The most significant property
transactions in the first six months were
the sale of BayWA Tower at Arabellenstrasse
for around 280 million euros to
Wealthcap, as well as the former Siemens
areal at Richard-Strauss-Strasse
for around 120 million euros to Bayerische
Versorgungskammer. During the
fulminant fourth quarter of 2016, ten
out of the seventeen transactions above
the 100 million euro mark were signed.
The disposal of Highlight Tower at Parkstadt
Schwabing was by far the largest
single asset deal on the Munich investment
market. CommerzReal sold this
office twin tower for over 500 million
euros shortly before the end of the year.
This deal plus the Munich share of the
Officefirst portfolio, accounting for more
than 700 million euros, were one-off effects
with a major positive impact on the
record result in 2016.
Top yields for office property remained
under pressure over the course of the
year ranging at 3.35 per cent by the end
of 2016.
While a significant demand for property
investments could be observed for all
asset classes, especially Core property
continues to be highly sought after. Due
to a diminishing supply, products in this
asset class are achieving respectively
high multipliers.
Transaction Volume München in bn euros
2.85
6.40
3.70
4.15
4.97
5.45
2011
2012
2013
2014
2015
2016
Source: Research Ellwanger & Geiger Real Estate GmbH ©, 31.12.2015
8 I

Vendors & Buyers
With a share of more than 70 per cent,
German investors remained the principal
players on the Munich investment
market in 2016. On the vendor
and on the buyer side alike, especially
open-ended funds, Special Funds and
pension funds continued to dominate
the market.
Outlook for 2017
Also in 2017, the lights are all green
for investments in commercial property.
Sustainable changes to the currently
low interest rates are not to be
expected, and alternative investment
opportunities have not yet become
attractive enough again. In combination
with a high level of liquidity on
the market, a continuing high demand
for property investments can be
expected. Only the supply of suitable
products will get ever tighter. Also the
extraordinary transaction activities of
the last few years will have an impact
on the market and could slow down
the transaction turnover in 2017. Despite
these market conditions, we expect
a continuously high volume of
transactions ranging at around 5 billion
euros.
Ihre Ansprechpartner.
Björn Holzwarth
Managing Director
Fon +49 89/179594-10
Fon +49 711/2148-192
Bjoern.Holzwarth@ellwanger-geiger.de
Alexander Zigan
Branch Manager Munich
Fon +49 89/179594-20
Alexander.Zigan@ellwanger-geiger.de
Stefan Knödler
Consultant Investment
Fon +49 89/179594-11
Fon +49 711/2148-196
Stefan.Knoedler@ellwanger-geiger.de
I 9

Entwicklungen 2015/2016 I 15
ELLWANGER & GEIGER Real Estate.
ELLWANGER & GEIGER Real Estate offers you a one-stop shop for a comprehensive range of services
relating ro the asset class of real estate. With the very highest discretion and integrity, we enable
you to keep your bearings in rapidly changing markets. Our success is founded aboce all on excellent
knowledge of the market and decades of experience in real estate business.
Real Estate
Funds & Asset Management
Our offices
Systematic research form the basis for
our analyses of location, portfolios and
cost-effectiveness that reflect market
conditions. From these, we derive strategies
aimed at capitalising on potentials
for earnings and efficiencies. In
addition to comprehensive leasing
services, our core expertise includes
project consulting and transaction business.
We adopt a hostic approach in
consulting on real estate: we partner
you all the way - from the development
of marketing strategies to the
preparation of data on properties and
the implementation of marketing processes.
Our services
Research
Investment analyses and consulting
Transactions, renting and leasing of
office, retail, industrial and logistics
space
We develop, plan and manage customised
real estate investment products
and special funds for institutional and
professional private investors. We
select different investment vehicles
depending on the needs
and product preferences of each investor:
Domestic special AIFs pursuant to
the German investment Code
Closed-ended public AIFs pursuant
to the German Investment Code
Luxembourg security funds and
special funds (SICAV, SIF)
individual schemes for offshore
investors
We select investment volumes that
permit niche investments and individual
mandates. We also limit the
number of investors so that we can
provide individualised support throughout
the investment period. Our service
naturally includes transparent reporting
with detailed reports on funds,
monthly financial reports and status
reports on real estate investments.
Stuttgart
Börsenplatz 1
70174 Stuttgart
Phone +49 711/2148-300
Fax +49 711/2148-290
Munich
Herzog-Rudolf-Straße 1
80539 München
Phone +49 89/17 95 94-0
Fax +49 89/17 95 94-55
Our further publications
Stuttgart Industrial & Logistics Market Report
Stuttgart Office Market Report
Munich Office Market Report
and other information materials may be obtained free of charge from:
gewerbeimmobilien@ellwanger-geiger.de or www.ellwanger-geiger.de.
10 I

GERMAN PROPERTY PARTNERS:
LOCAL COMPETENCE NATIONWIDE.
German Property Partners - or GPP is a
nationwide network for commercial real
estate in Germany. GPP bundles the expertise
of leading commercial property
companies in a nationwide alliance for
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face to the customer and from the local
expertise of our partners. In short: one
contact partner for all Big 7 property
markets in Germany.
Your high performance portfolio
for commercial Real Estate
Our services range from property investments
to commercial lettings. For investors,
we buy and sell industrial and
logistics property all over Germany - as
single asset or entire property portfolio.
Due to the banking background of the
founding members ELLWANGER & GEI-
GER (Stuttgart/Munich) and Grossmann
& Berger (Hamburg/Berlin), we are able
to support your project developments
also in financial aspects.
No matter is you are looking for office,
retail, industrial, or logistics space - with
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partner at your side.
Find out more about the top 7 commercial
real estate locations in our
free-of-charge GPP Commercial Market
Reports at:
http://www.germanpropertypartners.
de/en/market-survey/
Munich • Stuttgart • Frankfurt • Cologne • Düsseldorf • Berlin • Hamburg
I 11

ELLWANGER & GEIGER Real Estate GmbH
Unternehmensgruppe ELLWANGER & GEIGER Privatbankiers
Börsenplatz 1, 70174 Stuttgart
Phone +49 711/2148-300, Fax: +49 711/2148-290
www.ellwanger-geiger.de
Amtsgericht Stuttgart, HRB 733293, Geschäftsführer: Mario Caroli, Björn Holzwarth