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

LOCAL EXPERTISE – ACROSS GERMANY
MARKET SURVEY INVESTMENT/OFFICE LETTING 2017/Q1-4
INVESTMENT
STUTTGART
Some €1.2bn were invested in commercial real estate
in Stuttgart in 2017. The total fell far short of the prior
year’s - contracting by €600m or 34 %.
INVESTMENT PROPERTIES
The following transactions accounted for some €320m
in total. The “Mercedes-Benz-Bank” (Siemensstrasse 7)
was bought by the Baden-Würtemmberg Stiftung gGmbH,
a foundation, and the “City Plaza” (Rotebühlplatz) was
sold again. The building at Mittlerer Pfad 13-15 in Stuttgart-Weilimdorf,
also changed hands. Altogether, 65
transactions were completed in the past twelve months,
about 50 % of them priced in the two or three-figure millions.
Once again, the focus of investment activity - partly
as a result of the three large sales noted in the foregoing
- lay on office properties, which accounted for around
78 % of the total volume of transactions. Other sectors
such as building sites, retail and hotel properties did not
play a significant role this year. Portfolio trades accounted
for some 10 % (by value) of properties sold. The prime net
yield on office assets was 3.50 %, as it was in the prior
year. Research showed a prime net yield on commercial
buildings of 3.10 % and 4.50 % on logistics properties.
INVESTORS AND VENDORS
Amounting to 24 % of the total, open-end/specialist funds
were the predominant buyers. Private investors/family offices
followed with a share of 13 % and insurance companies
with 11 %. Public administration and opportunity
funds each accounted for a share of some 10 %.
opportunity funds with some 13 % each. Foreign investors
made up some 50 % of the total.
OUTLOOK
It is expected that several outstanding transactions will
be completed in the 1st half of 2018, so that the final tally
for the year should be comparable with the total in 2017.
Transaction volume Stuttgart
(in €bn)
5-year average (2013-2017):
ca. €1.3bn
OFFICE LETTING
STUTTGART
2017 closed with take-up of office space in Stuttgart at
about 270,000 m². The result was thus some 38 % lower
than the prior year’s.
TAKE-UP OF SPACE
In what remained the biggest single transaction of 2017,
Daimler AG decided in the 1st quarter to have a new
building erected in Leinfelden-Echterdingen that will
provide over 50,000 m² of space. The two biggest rental
agreements were signed in the 3rd quarter. Daimler AG
took about 11,500 m² in the industrial estate Stuttgart Vaihingen.
And the law firm CMS Hasche Siegle took a lease
for some 11,300 m² in a new build under development on
Rotebühlplatz, Stuttgart City district. Strongly influenced
by the Daimler AG development, Leinfelden-Echterdingen
was the strongest sub-market with 61,300 m² of take-up.
Around 52,000 m² of office space was let in the Vaihingen/
Möhringen sub-market. Stuttgart City followed with
51,600 m² of space newly taken up. Once again industrial
firms formed the biggest group of new office occupants
in 2017.
RENTS
The premium rent rose by 6 % year on year to €24.30/m²/
month. The average rent for the entire city area including
Leinfelden-Echterdingen was about €13.70/m²/month,
likewise a year on year increase of some 6 %.
5-year average (2013-2017):
ca. 305,600 m 2
AVAILABLE AND VACANT SPACE
By the end of 2017 the vacancy rate had reached 2.1 %,
the lowest level for 16 years. The total space available at
short notice stood at a mere 167,000 m². Meanwhile the
shortage of space has spread beyond the City and central
area. Peripheral locations likewise have little to offer.
OUTLOOK
In the next two years no significant increase in the meagre
amount of space available in the City and central areas
is expected. Those who need large amounts of space will
increasingly look to the periphery, as the less central locations
offer far more opportunities for new developments.
This will lead to further price rises in such locations.
Take-up of space in 2018 will probably be between
230,000 m² and 250,000 m².
TOP 3 SUB-MARKETS (take-up of space / average rent)
LEINENFELDEN-ECHTERDINGEN / 61,300 m² / €12.20/m²/month
VAIHINGEN/MÖHRINGEN / 52,000 m² / €12.30/m²/month
CITY / 51,600 m² / €18.50/m²/month
TOP 3 CONTRACTS
1. DAIMLER AG (OWNER-OCCUPIER)
Meisenweg / ca. 50,000 m²
2. DAIMLER AG
Industriestrasse / ca. 11,500 m²
3. CMS HASCHE SIEGLE
Rotebühlplatz / ca. 11,300 m²
Take-up of space Stuttgart Rents Stuttgart
(in 000s m 2 , incl. owner-occupiers) (net in €/m 2 /mth)
20.00 20.00
21.50
22.80
premium rent
23.00
24.30
average rent
Sales were very evenly distributed. Private sellers/family
offices comprised about 14 % of the total traded, followed
by corporates, project developers/builders and
0.9 1.0 1.7 1.8 1.2 1.5
2013 2014 2015 2016 2017 2018
258 278 290 432 270 250
2013 2014 2015 2016 2017 2018
12.40
2012
12.00
2013
13.70
12.50 12.50
12.90
2014 2015 2016 2017
18 19
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