Market Report 2011 GerMany - Europe Real Estate

IVG office market scoring: attractiveness of
locations for office investments
In the following section, IVG Research compares 70 selected major cities on the basis
of a scoring model to determine their attractiveness for office investments. The cities
are evaluated according to a variety of characteristics that fall under the three
categories of market size, market risk and future prospects (refer to the Notes containing
explanations of the methodology used). You can see how the locations performed
in the comparison from the table on the right, which presents the overall results and
from the map of Germany provided further below, which highlights the results in the
individual categories. In this context, a score of 1 represents a very poor result and
a score of 5 a very good result.
Category Weighting Indicators Period
Market size
33,3 %
Market risk
33,4 %
Future
prospects
33,3 %
Overall score 100.0
11.1 Office stock (in million m²) 2010
11.1 SID employees (in million) 2010
11.1 Gross value added (in € million) 2008
11.1 Market transparency (index) 2010
5.6 Volatility of gross value added (in %) 2000-2010
5.6 Volatility of rental trends (in %) 2000-2010
11.1 Vacancy rate (in %) 2010/2011
11.1 Growth of gross value added (in %) 2001-2010
11.1 Population growth 2025 (in %) 2009
11.1 Prognos future opportunities (index) 2010
Source: IVG Research, SID = subject to social insurance deductions
Market size: guarantees a good score, but …
Since market size is generally a reflection of a city‘s economic importance, the first
10 places in the ranking consist entirely of major conurbations with high populations,
established labour markets, large numbers of commuters and their own universities.
It therefore comes as no surprise to see Munich and Hamburg take first and second
place respectively – a result that is not solely attributable to the market size. In reality,
both cities score highly due to their solid economic development and their high
level of transparency regarding market risk. Added to this are numerous soft factors
that enable Munich and Hamburg to exert a strong attraction to people, coupled with
a modern, diversified and dynamic economic structure. This contributes to the significant
lead enjoyed by both cities with regard to future prospects.
Good rankings were also secured by the smallest two of Germany‘s seven major office
capitals, Stuttgart (3rd place) and Cologne (5th place). Virtually ignored by investors
for many years, both cities have succeeded in making up for lost ground over the
past few years. Although smaller than Cologne, Stuttgart has proved to be significantly
more dynamic than its counterpart on the Rhine thanks to a flexible and innovative
medium-sized entrepreneurial base. For this reason, Stuttgart comes in at eleventh
place nationwide with regard to its future prospects (Cologne ranks 18th). The Stuttgart
office market has also established a reliable reputation over the past decade with
low rent volatility, low vacancies, stable economic growth and a high level of market
transparency. Accordingly, Stuttgart tops the table in Germany in terms of market risk.
Office Market Scoring – overall score
Munich
Hamburg
Stuttgart
Frankfurt/Main
Cologne
Berlin
Dusseldorf
Hanover
Nuremberg
Bonn
Dresden
Ingolstadt
Wiesbaden
Münster
Erlangen
Karlsruhe
Essen
Bremen
Potsdam
Mainz
Mannheim
Ulm
Dortmund
Regensburg
Freiburg
Aschaffenburg
Duisburg
Leipzig
Augsburg
Heidelberg
Ludwigshafen
Neuss
Bochum
Gütersloh
Constance
Kiel
Darmstadt
Aachen
Paderborn
Bielefeld
Wuppertal
Braunschweig
Mönchengladbach
Leverkusen
Saarbrücken
Ratingen
Worms
Lübeck
Offenbach/Main
Osnabrück
Marburg
Bamberg
Kassel
Kaiserslautern
Hagen
Koblenz
Hamm
Jena
Trier
Fürth
Heilbronn
Würzburg
Solingen
Rostock
Erfurt
Salzgitter
Magdeburg
Weimar
Schwerin
Krefeld
Chemnitz
Siegen
Cottbus
Gera
Halle (Saale)
Source: IVG Research
4. 4 27
4 . 18
3 . 86
3 . 84
3 . 83
3 . 83
3 . 66
3 . 45
3 . 25
3 . 19
3 . 13
3 . 05
2 . 98
2 . 98
2 . 93
2 . 91
2 . 90
2 . 89
2 . 89
2 . 84
2 . 82
2 . 82
2 . 80
2 . 74
2 . 74 74
2 . 74
2 . 71
2 . 70
2 . 63
2 . 62
2 . 60
2 . 55
2 . 53
2 . 53
2 . 52
2 . 51
2 . 51
2 . 50
2 . 46
2 . 44
2 . 44
2 . 36
2 . 33
2 . 32
2 . 30
2 . 30
2 . 30
2 . 29
2 . 29
2 . 29
2 . 27
2 . 27
2 . 26
2 . 23
2 . 22
2 . 22
2 . 22
2 . 20
2 . 19
2 . 15
2 . 15
2 . 14
2 . 07
2 . 07
2 . 05
2 . 04
2 . 03
2 . 02
1 . 97
1 . 96
6
1 . 87
1 . 79
1 . 65
1 . 57
1 . 56
Score 1 2 3 4 5
17