GPP Commercial Property Market Germany´s top7 cities 2017/Q1-4

LOCAL EXPERTISE – ACROSS GERMANY
MARKET SURVEY INVESTMENT/OFFICE LETTING 2017/Q1-4
INVESTMENT
DÜSSELDORF
A new record result was posted for Düsseldorf in 2017.
The year closed with sales of commercial real estate
valued at some €3.0bn. The volume of transactions
surpassed the previous two best marks, beating last
year’s figure by 13 % and the previous record of 2015
by 8 %. The biggest transaction of the year involved the
Vodafone Campus, which AGC Equity Partners sold in
the 4th quarter to Mirae Asset Global Investments for
some €280m. Over the course of the year the prime net
yields in Düsseldorf softened further, slipping to 3.40 %
on office properties and 3.50 % on commercial buildings.
INVESTMENT PROPERTIES
Office properties were the most popular investments in
Düsseldorf, where they accounted for a share of 81 % and
a total of some €2.4bn. Building land followed with 5 %
(about €154m), retail properties with 5 % (about €136m)
and mixed use properties accounted for 4 % (about
€133m). Hotels comprised 3 % of the market (about €77m).
OUTLOOK
It is to be assumed that investor demand for properties
in Düsseldorf will remain high, even if the low yields are
unlikely to encourage record levels of trading. Some new
developments will come onto the market in 2018, offering
potential buyers the opportunity to sign forward deals or
make commitments. Portfolio adjustments provide other
investment alternatives; in 2017 transactions of this kind
comprised an appreciable slice of total turnover. As in previous
years, the two options just named will probably drive
investment turnover in 2018 to similarly high levels.
Transaction volume Düsseldorf
OFFICE LETTING
DÜSSELDORF
In 2017 the office market in Düsseldorf continued its
upward trajectory. Over the past twelve months lettings
rose to a total of 358,700 m². The result is some 8 %
higher than in 2016, when about 330,800 m² of space was
let to new tenants.
TAKE-UP OF SPACE
Once again, the most popular sub-market was City, where
82,200 m² of space was taken up. The left bank district
Linksrheinisch/Seestern was a close second with about
78,800 m². Third-placed Kennedydamm/Derendorf submarket
totalled around 43,900 m².
Industrial and trading firms were the biggest single group
of clients for Düsseldorf office space in 2017, renting
about 44,700 m². Two agreements for large amounts of
space in new developments brought the total for banks
and financial services to about 39,700 m².
RENTS
Compared with the prior year the average rent rose by
95 cents to €15.35/m²/month. The premium rent, which
had appeared settled at a high level, actually increased
slightly. From €26.50/m²/month at the end of 2016 it has
crept up to €27.00/m²/month.
AVAILABLE AND VACANT SPACE
Year on year the amount of space standing empty fell by
about 120,000 m² to some 630,000 m². This translates into
a vacancy rate of 8.4 % based on a slightly reduced total
stock of office space of around 7.5m m².
New building developments in 2017 totalled 105,000 m²,
but most of the space has already been let. The new offices
are spread over 11 development projects. Eight new
build projects are in the pipeline for 2018 (74,000 m²) and
the same number is due in 2019 (127,000 m²); here too
future tenants have reserved a large proportion of the
space.
OUTLOOK
Düsseldorf continues to be a very popular city for office
users. Good economic growth will be reflected in the
take-up of space in 2018. Some clients are still in the
market for more than 10,000 m² of office premises, so that
the total letting result for 2018 could well be similar to that
returned in 2017.
TOP 3 SUB-MARKETS (take-up of space / average rent)
CITY / 82,200 m² / €15.10/m²/month
SEESTERN/LEFT BANK OF THE RHINE/ 78,800 m² / €14.20/m²/month
KENNEDYDAMM/DERENDORF / 43,900 m² / €17.90/m²/month
TOP 3 CONTRACTS
Take-up of space Düsseldorf Rents Düsseldorf
1. HSBC TRANSACTION SERVICES GMBH
Hansaallee 1-3 / ca. 20,100 m²
2. BANKHAUS LAMPE
Schwannstrasse 10 / ca. 13,000 m²
3. BERUFSGENOSSENSCHAFT HOLZ UND METALL
Arcadiapark / ca. 11,200 m²
INVESTORS AND VENDORS
Opportunity and equity funds were the biggest vendors
of the year as they took advantage of the fact that investors
were willing to pay high prices to sell properties
for €806m, which translated into 27 % of the transaction
volume. Asset managers were the most active group of
buyers. They spent about €911m on properties. That is
equivalent to 31 % of the market. Last year foreign investors
remained very much in evidence in Düsseldorf. By
the end of the year their share of total trades had reached
€1.4bn (49 %).
(in €bn)
5-year average (2013-2017):
ca. €2.4bn
1.8 1.9 2.7 2.6 3.0 2.5
(in 000s m 2 , incl. owner-occupiers) (net in €/m 2 /mth)
5-year average (2013-2017):
ca. 338,900 m 2
347 238 420 331 359 400
26.00
14.10
27.50
14.90
26.00 26.00
13.80
15.25
premium rent
26.50
27.00
average rent
15.35
14.40
2013 2014 2015 2016 2017 2018
2013 2014 2015 2016 2017 2018
2012
2013
2014 2015 2016 2017
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