E & G Investment market report 2017-2018

Stuttgart – economy with visions.
Investment market report 2017/2018.

Contents.
Stuttgart
Market trends...............................................................................................3
Key figures....................................................................................................4
Outlook for 2018..........................................................................................6
Your contact partners..................................................................................7
All about real estate.....................................................................................8
E & G Real Estate.........................................................................................9
German Property Partners......................................................................10

The Stuttgart property market.
Top-3-deals
Merceces-Benz Bank: The State Foundation of Baden-Württemberg has acquired this
office trophy with long-term lease from Hines for around 120 million euros.
City Plaza: Zurich Group Germany bought this office and business property from a
Spanish family office for ca. 105 million euros.
Mittlerer Pfad 13-15, Weilimdorf: Ceberus receives around 95 million euros from La
Francaise Real Estate Partners for this office property rented by Porsche.
Transaction volume breaks the billion barrier again.
With a transaction volume of 1.42
billion euros in 2017, the investment
turnover in Stuttgart was significantly
lower than in the previous years.
While 2016 was hailed as a record
year, the transaction volume slumped
in 2017 by 580 million euros or 29 per
cent. Despite this decline, the billion-euro
mark has been exceeded for
the sixth time in succession.
The first quarter of 2017 kicked the
year off with a rather moderate
investment volume of 190 million
euros. Thanks to upbeat activities
in the second quarter (EUR 580 m)
and the third quarter (EUR 360 m),
the property investment market
was catching up with the extraordinary
run of the previous year. With a
turnover of 330 million euros, the
fourth quarter could unfortunately
not keep pace with the strong finish
in recent years, as several double- and
triple-digit million transactions were
not brought to a close before the end
of the year.
In the reporting period, a total of 65
property transactions were concluded,
of which half ranged at double-
and triple-digit million volumes.
Investors were showing a keen interest
in office property. This asset
class alone accounted for around
67 per cent of the total investment
volume – not least due to the top
sales of “Mercedes Bank”, “City Plaza”
and “Porsche Haus”. Residential property
achieved a share of 14 per cent
of the turnover, followed by plots and
development projects with around
8 per cent.
Buyers were predominantly openended
funds/German special funds
with around 23 per cent, as well as
insurances with a 16 per cent share
in the total transaction volume.
11 per cent of the transactions was
generated by private investors/
family offices, while property owners,
opportunity funds and public
investors accounted for 9 per cent of
the transaction volume.
On the vendor side, project and property
developers were the most active
players on the Stuttgart investment
market achieving a total share of 21 per
cent. They were followed by private
vendors and family offices with
15 per cent, and opportunity funds, as
well as the vendor group corporates/
owner-occupiers/non-properties -
each with around 11 per cent of the
overall transaction volume.
Compared with 2016, the share of
foreign investors buying property
has decreased moderately, ranging at
around 37 per cent. As vendors,
foreign market players have generated
40 per cent of the transaction volume,
a significantly higher share than in
2016.
Fully let office property at inner city
locations reached comparable multipliers
as in the previous year. Top
yields with a multiplier of up to 26.0
corresponded to a gross initial yield
of ca. 3.8 per cent. Also for high
street property, yields have remained
stable on a high level with multipliers
of up to 29.0 (3.4 per cent gross
initial yield). Long-term, fully let
office property in city fringe and
peripheral locations gained multipliers
between 18 and 22 (approx.
5.5 to 4.5 per cent gross initial yield).
In the reporting period, the property
investment market in Stuttgart
has continued to perform on an
above-average level. By the end of
the year, the projected transaction
volume of 1.5 billion euros was nearly
achieved.
I 3

Transaktionsvolumen/Renditenüberlick I 4
Key figures.
Transaction Volume Stuttgart* in bn euros
1.00
1.15
1.20/1.60**
2.00
1.42
1.80/2.45**
2010 2011 2012 2013 2014
2012
2013
2014
2015
2016
2017
* including Leinfelden-Echterdingen
** including residential portfolios
Top Yields for Commercial Property in Stuttgart in %
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 5.70
5.00 5.50
3.40 3.80
Retail Centres
Logistics
Office
Highstreet
2012 2013
2014
2015
2016 2017
Source of both illustrations: Research E & G Real Estate GmbH ©, Stand: 31.12.2017
4 I

Key figures.
Transaction Volume by Asset Class in %
Residential
14.4 %
Plots/Development
Projects
7.5 %
Mixed-use
4.6%
66.9 %
Office
Hotel
Retail
Others
4.1 %
2.0 %
0.5 %
Transaction Volume by Buyer Group in %
REITs
Opportunity Funds
7.5 %
Asset Managers
Property
Developers
Corporates/Owner-Occupiers/
Non-Properties
Immobilien AGs
Others
5.3 %
2.9 %
1.8 %
0.1 %
6.1 %
8.5 %
8.6 %
Public Institutions
9.2 %
Property Holders
11.4 %
22.7 %
Private Investors/
Family Offices
15.9 %
Transaction Volume by Vendor Group in %
Open-ended Funds/
Special Funds
Insurances
Property Developers
20.7 %
14.5 %
Private Investors/
Family Offices
Others
Pension Funds
Insurances
Property Holders
Public Institutions
Asset Managers
Closed Funds
Immobilien AGs
1.3 %
1.4 %
1.6 %
1.6 %
2.1 %
2.5 %
2.9 %
4.3 %
7.6 %
10.8 %
10.9 %
Opportunity Funds
Corporates/Owner-Occupiers/
Non-Properties
8.9 %
Banks
8.9 %
REITs
Open-ended Funds/German Special Funds
Source of all illustrations: Research E & G Real Estate GmbH © Stand: 31.12.2017
I 5

Outlook for 2018.
A decline in demand is not to be
expected in 2018, as the economic
environment in the Stuttgart Region
and the investment climate on
the property market remain highly
positive.
With its low volatility and strategic
situation in one of the strongest economic
regions in Europe, the Stuttgart
property market continues to be
attractive for national as well as international
investors. Despite a limited
supply of investment products, yields
are likely to consolidate on a rather
low level in all asset classes.
Due to the fact that many property
deals from 2017 are still in the
pipeline, the first quarter of 2018 will
be starting with a high transaction
volume. In consideration of the supply
side, we expect a comparable result
to 2017 and an overall transaction
volume of 1.5 billion euros.
6 I

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 +49 711/2148-300
or Fax +49 711/2148-290.
Find us on the internet:
www.eug-immobilien.com
Björn Holzwarth
Managing Director
Phone +49 711/2148-192
Bjoern.Holzwarth@eug-re.de
Simone Wiedmann
Consultant Investment
Phone +49 711/2148-375
Simone.Wiedmann@eug-re.de
Michael Linden
Consultant Investment
Phone +49 711/2148-205
Michael.Linden@eug-re.de
Tobias Schneider
Consultant Investment
Phone +49 711/2148-105
Tobias.Schneider@eug-re.de
Stefan Knödler
Consultant Investment
Phone +49 711/2148-196
Stefan.Knoedler@eug-re.de
Katja Siemer
Sales Assistent
Phone +49 711/2148-252
Katja.Siemer@eug-re.de
I 7

All about real estate.
We are your competent partners for property transactions in all asset classes. From
office, retail and high street products to hotels, project developments and industrial and
logistics real estate – we know what counts when it comes to property investments in
southern Germany.
You will profit from:
Individual support in your property transaction projects
The deep market knowledge of our experienced property experts
An accurate valuation of your property according to national and international
standard
On-going market research and real estate proficiency
Our investment team looks forward to meeting your individual real estate requirements.
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.
8 I

Entwicklungen 2015/2016 I 15
E & G Real Estate.
E & G Real Estate offers you a one-stop-shop in commercial real estate services. We handle property
matters with a high level of discretion and integrity. With our deep market knowledge and decades of
experience, we are able to provide an outstanding quality of service in real estate.
Commercial Real Estate.
At E & G Real Estate, we take good care
of all your property needs. From
tailor-made project consulting and
property valuation to smooth transaction
management and letting
services, we are your trusted partner
all the way. On the basis of our inhouse
research, we provide a realistic
assessment of a property´s market potentials.
This knowledge together with
our excellent networks enables us to
achieve best practice yields for your
real estate product – not only on a
regional, but also on a national level.
Our team of experienced property
professionals will support your
property transaction with expertise
and due diligence. Your property needs
are first choice for us. And that is why
E & G Real Estate is first choice for
commercial real estate in southern
Germany.
Our services.
Market research
Property valuation
Investment analysis and consulting
Transaction management
Letting services
Residential Real Estate.
As leading real estate agents in the
Stuttgart Region, we know the residential
property market inside out.
Our success is based on the professional
competence, commitment and
experience of our property experts.
They will take their time to understand
your individual property needs
and wishes.
With our long-standing experience
in residential real estate, we are able
to provide an accurate valuation of
your property as well as a detailed
analysis of the potential target buyer
group. On this basis, we strive to
achieve the best market value for
your property.
Our services.
Market-relevant property valuation
Close analysis of target buyer group
Professional support with contract
negotiations and notarizations
Nationwide network of regional
property companies
Strong market presence through our
local shops
Our offices.
Stuttgart, Börsenplatz 1
Phone +49 711/2148-300
München, Herzog-Rudolf-Straße 1
Phone +49 89/17 95 94-0
Esslingen, Pliensaustraße 7
Phone +49 711/310 5939-0
Sindelfingen, Planiestraße 15
Phone +49 7031/73 44 68-0
Waiblingen, Lange Straße 49
Phone +49 7151/98 243-0
Our further publications
Stuttgart Office Market Report
Munich Office & Investment Market Report
Stuttgart Industrial & Logistics Market Report
Immobilienmarktbericht Stuttgart & Region
Our market reports and further information may be obtained free of charge at:
info@eug-re.com or www.eug-immobilien.com
I 9

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
regional competence. National and international
clients can profit from one
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
GPP you will always have a competent
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 10

E & G Real Estate GmbH
Börsenplatz 1, 70174 Stuttgart
Phone +49 711/2148-300,
stuttgart@eug-re.de
www.eug-immobilien.com
Amtsgericht Stuttgart, HRB 733293, Geschäftsführer: Mario Caroli, Björn Holzwarth