1. style and fashion
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3. cologne

REAL ESTATE MARKET
GERMANY 2014 | 2015
A RESEARCH PuBLICATION BY DG HYP
RETAIL, OFFICE AND RESIDENTIAL
PROPERTY: POSITIVE OuTLOOK
WITH SLOWING MOMENTuM
OCTOBER 2014
Real Estate Market Germany 2014 | 2015
Table of Contents
Preface ____________________________________________________________________
2
Summary __________________________________________________________________
3
Economic Conditions in Germany _____________________________________________
5
Germany’s Major Cities – The Place to be _____________________________________
6
Retail Properties ____________________________________________________________
8
Office Properties ___________________________________________________________
23
Residential Properties _______________________________________________________
35
Overview of Forecasts ______________________________________________________
39
Imprint ____________________________________________________________________
40
Disclaimer __________________________________________________________________
40
DG HYP Offices _____________________________________________________________
41
1
Real Estate Market Germany 2014 | 2015
Preface
As a commercial real estate bank, we support our business divisions and risk management teams with their credit and lending decisions through regular analysis of the
markets we actively cover. We publish the results of our analyses in commercial real
estate market reports, targeting investors as well as our partners within the Cooperative Financial Services Network: these are German cooperative banks, with whom we
jointly originate financings in the various regions. The present report continues our
series of studies concerning the German real estate market, published in the autumn
of each year. This research study looks at market developments for retail, office and
residential real estate during 2014, and provides an outlook for 2015.
The real estate market for retail, office and residential property in the prime locations
the report covers – Hamburg, Berlin, Cologne, Dusseldorf, Frankfurt, Stuttgart and
Munich – has benefited from continued investor demand, even though the momentum is likely to fade somewhat, given high prevailing valuation levels. Thanks to strong
consumer sentiment and rising sales, the uptrend in top rents for good retail locations in the German metropolitan areas continues unabated, supported by ongoing
demand for high-quality retail floorspace. The outlook for the office market is positive
as well. However, increased office construction activity is likely to widen supply, which
would slightly slow down the increase in top rents. The residential real estate market
shows similar prospects, even though the situation for this market segment remains
tense. This is due to the marked increase in maintenance costs, which represent an
additional burden for tenants. On top of this, the low interest rate environment makes
buying a flat an attractive alternative. Hence, rent increases expected for 2014 are
likely to be somewhat subdued.
The German real estate market report is of course also available in German. All
­pre­viously published DG HYP market reports can be downloaded from our website
(on www.dghyp.de/en/unternehmen/market-research); contact us if you prefer a hard
copy.
Deutsche Genossenschafts-Hypothekenbank AG
October 2014
2
Real Estate Market Germany 2014 | 2015
SUMMARY
»
»
»
»
The commercial property markets in the top seven German locations - Berlin,
Dusseldorf, Frankfurt, Hamburg, Cologne, Munich and Stuttgart – have performed very well in the last two years. Rents in the market segments covered in
this report - office, retail and residential - have increased sharply. And this has
been achieved against the background of macroeconomic growth of only slightly
above zero.
There are many reasons why demand for offices, retail space and homes remains buoyant: the urbanisation trend is drawing people into the cities. The retail sector, as well as many companies from other sectors, are following potential customers and the staff they need. However, the robust labour market, rising
wages, a positive consumer climate and the prospect of Germany gaining
strong momentum again as the engine of economic growth in Europe, have
stimulated demand.
By the summer of this year, it also looked as if German economic output would
grow strongly in 2014 and 2015. However, geopolitical risks, for example relating to the crisis in Ukraine, are currently having a very adverse impact, causing
growth expectations to be slashed by almost half.
This is removing some of the momentum from demand for commercial properties. The visible increase in, and in some cases already high rents are in any
case having a dampening effect. The supply of space is also increasing, because an increasing number of new construction projects were initiated under
prosperous market conditions. However, below the line, the prospects are not
bad at all; in principle, the upward movement remains intact. Rents should
therefore generally increase further, albeit at a slightly more moderate pace.
FORECAST FOR RETAIL PROPERTIES
Change in rents
in % y-o-y
Retail sector: trend for
shopping in the city
Rents prime locations
in EUR pro m²
2013
2014e
2015e
2013
2014e
2015e
12.5
0.0
1.9
270
270
275
Cologne
2.1
1.3
1.2
240
243
246
Dusseldorf
9.1
1.3
1.6
240
243
247
Frankfurt
5.7
1.1
1.8
280
283
288
270
Berlin
Hamburg
6.1
1.9
1.9
260
265
Munich
3.3
1.6
1.6
315
320
325
Stuttgart
4.4
0.0
0.0
235
235
235
Average for top locations
7.8
0.9
1.6
268
270
274
Source: BulwienGesa. Feri. DZ BANK Research forecast
»
»
Retail sales - which had been stagnating for a long time - are growing, the consumer climate is positive despite the recent setback, and shopping in the high
streets of large cities and city centre shopping centres is a very popular pastime
for consumers. The number of high-spending visitors from abroad is also increasing. Sound economic conditions are also attracting international chain
stores to Germany, mainly to prime locations.
The demand for first-class sales space is correspondingly high. This is increasing almost everywhere due to projects under development, however the supply
is not sufficiently large. There are nevertheless signs that tenants are becoming
3
Real Estate Market Germany 2014 | 2015
less willing to accept even higher prime rents; these have increased by more
than 40 per cent to an average of almost EUR 270 per sqm within ten years. A
deterioration in economic prospects could also lead to a more cautious approach. We therefore expect only slight growth in prime rents in 2014 and 2015.
FORECAST FOR OFFICE PROPERTIES
Change in rents
in % y-o-y
Office: Positive job market leading
to high demand
Vacancy rate in %
2013
2014e
2015e
2013
2014e
Berlin
2.3
2.2
1.3
8.0
7.8
2015e
7.7
Cologne
2.9
1.2
1.4
7.5
7.2
7.0
Dusseldorf
6.4
0.0
1.0
10.8
10.9
11.0
Frankfurt
6.1
0.0
1.4
12.5
12.3
12.3
7.3
Hamburg
0.0
1.3
1.6
7.6
7.4
Munich
5.0
4.8
1.5
6.8
6.4
6.2
Stuttgart
-1.1
2.7
1.6
5.2
4.9
4.7
3.4
2.0
1.5
8.4
8.2
8.1
Average for top locations
Source: BulwienGesa, Feri, DZ BANK Research forecast
»
»
The positive trend in employment figures supports the high demand for firstclass office space in the major cities. In addition, virtually no new projects were
started as a result of the recent economic crisis. Consequently, the volume of
available space is in increasingly short supply. Prime rents have increased visibly, while vacancy rates have fallen sharply.
However, the pace is likely to slacken over the rest of this year. On the one
hand, more office space is now coming onto the market, and on the other hand,
the economic prospects have deteriorated. The upward movement in prime
rents should therefore slow this year and next year.
FORECAST FOR RESIDENTIAL PROPERTIES
Average first occupancy
rents in % y-o-y
Average first occupancy
rents in EUR pro m²
2013
2014e
2015e
2013
2014e
2015e
Berlin
8.0
3.7
1.8
10.8
11.2
11.4
Cologne
1.8
1.8
1.8
11.2
11.4
11.6
Dusseldorf
2.6
2.5
1.6
12.0
12.3
12.5
Frankfurt
5.4
2.0
2.3
12.8
13.0
13.3
Hamburg
0.8
2.3
1.5
13.0
13.3
13.5
Munich
3.7
5.0
2.0
14.0
14.7
15.0
Stuttgart
2.9
1.9
1.8
10.8
11.0
11.2
Average for top locations
4.3
3.1
1.8
11.9
12.3
12.5
Source: BulwienGesa, Feri, DZ BANK Research forecast
»
»
Housing markets in prime locations remain under pressure. Although more construction is taking place, it will not be sufficient to meet the demands of strong
population growth in the major cities. A substantial supply shortfall has also accumulated in recent years. However, rent growth is likely to slow further. This
trend has already been evident since 2013.
Finally, tenants are carrying the additional burden of a visible increase in additional housing costs. Budget restrictions on households are likely to force people to relocate to cheaper districts of cities or to the surrounding area. Buying a
home is often still an attractive alternative to renting due to low interest rates.
4
Residential: Housing shortage in
major cities, markets remain under
pressure
Real Estate Market Germany 2014 | 2015
ECONOMIC CONDITIONS IN GERMANY
ECONOMIC FORECAST GERMANY
2012
in % y-o-y
2013
2014
2015
GDP
0.4
0.1
1.5
1.3
Private consumption
0.8
0.9
1.2
1.4
Public consumption
1.0
0.2
1.0
1.3
-2.1
-0.9
5.3
4.3
Exports
3.2
0.9
5.1
6.7
Imports
1.4
1.5
6.7
7.3
Inflation rate (HICP)
2.1
1.6
0.9
1.9
Unemployment rate (in %)
6.8
6.9
6.7
6.7
Public budget balance (in % of GDP)
0.1
0.0
-0.2
-0.1
Investment
Source: DZ BANK Research
After a very good start to the year for the German economy, growth contracted
slightly by 0.2 per cent in the second quarter. Both foreign trade and investment
were responsible for this trend. Good weather in the first quarter led to some of the
construction investment planned for the second quarter being brought forward. The
export-oriented German industry was also affected to some degree by the crisis in
the Ukraine.
German economy contracted
by 0.2 per cent in Q2
A slight increase in consumption has prevented an even weaker result. Both the
government and private households have continued to increase their consumer
spending. Consumption has thus once again acted as a stabilising factor for the
German economy.
The economy will continue to revive slightly in the second half. However, growth of
only 1.5 per cent is likely to be achieved in 2014. The pace of growth will weaken
further slightly next year. Consumer spending is robust. However, negative factors
associated with foreign trade will prevent a better result.
GDP GROWTH VS. PREVIOUS YEAR IN PER CENT
Robust domestic demand supports
growth in 2014 and 2015
UNEMPLOYMENT RATE IN PER CENT
6
13
12
4
11
2
10
0
9
8
-2
-6
2003
7
Germany
-4
2005
2007
Germany
6
Eurozone
2009
2011
2013
5
2003
2015e
Source: DZ BANK
Eurozone
2005
Source: DZ BANK
5
2007
2009
2011
2013
2015e
Real Estate Market Germany 2014 | 2015
GERMANY'S MAJOR CITIES – THE PLACE TO BE
One of the global developments which trend researchers have identified for the future is urbanisation. The renaissance of cities is also evident in many places in Germany. It is not very long since the "depopulation of city centres" was often a subject
of discussion. Anyone who could afford to do so, bought a property in the countryside. Shoppers flocked to the spacious new shopping centres which were springing
up outside city boundaries. In the cities themselves, there was little activity after office hours. Deserted towns and cities are today often located in so-called migration
regions. "Rural migration" has already clearly left its mark on many structurally weak
regions - not only in East Germany; populations are ageing because young people
are moving away, no buyers are being found for houses, and kindergartens and
schools are closing their doors. One example of this is the Werra-Meißner district in
North Hessen, where the population has declined by almost 1 per cent annually in
the last decade.
Cities on trend: benefiting from
rural migration
In contrast, many major cities are being literally overrun. The populations of all the
prime locations have increased significantly in recent years. Anyone who can afford
to do so now moves into districts of cities which are "IN". Often these are former "alternative" residential areas, where it was possible only a few years ago to live in an
old building at low cost: for example Prenzlauer Berg in Berlin, the Schanzenviertel
in Hamburg or Bockenheim in Frankfurt. There are increasing protests in these
"neighbourhoods" because longstanding residents feel they are being dislodged by
the process of "gentrification". They often cannot afford the high rents and purchase
prices, which have been driven up by demand from the high-earning new residents
of the area.
Who does the city belong to?
PRIME LOCATIONS: POPULATION GROWING STEADILY …
… AT THE EXPENSE OF THE REST OF THE COUNTRY
106
14%
1993=100
105
104
103
9%
4%
102
6%
5%
5%
101
5%
100
99
596
620
703
1.030
Dusseldorf Stuttgart Frankfurt Cologne
population in thousand
1.401
1.815
3.547
98
Munich
Hamburg
Berlin
97
1993
growth rate from 2003 to 2013
1997
2001
Top-7
Source: Feri, own calculations
2005
2009
Germany
2013
Source: Feri, own calculations
It is not the case that Germans no longer want to live in their own houses or in a rural idyll. This is evident from the major success of many magazines based around
the theme of "country life". However, when selecting a property becomes a reality,
the advantages of the city prevail. And people who definitely want to live in the city,
as well as those for whom the advantages predominate, are therefore responsible
for the continuing high demand for houses and apartments in conurbations. And, in
6
Romantic image of country life
not borne out by reality
Real Estate Market Germany 2014 | 2015
contrast to the situation only a few years ago, many people who moved to the city
when they were young, stay there, even after they have had a family.
There are many reasons in favour of living in cities. Examples are a good public sector infrastructure, good shopping opportunities and a wide range of cultural activities,
a favourable job market, with only a short journey to work, or better medical care.
There is often also a more generous supply of childcare and a greater variety of different types of schools which, given the major importance of a good education today, is very important to many parents. The divergence between the attractions of
the city and the countryside will increase further over time, because as migration increases, rural areas will have even less to offer.
Cities have much to
recommend them …
On the other hand, the growth of major cities also has disadvantages and negative
effects. Housing markets are under increasing pressure and rents are high. Transport infrastructures are also often overburdened. Negative environmental factors
such as air and noise pollution also play a part.
… but there are disadvantages too:
high prices, traffic congestion, noise
and exhaust fumes
The urbanisation trend also has far-reaching consequences for the economy. There
is a direct impact on the retail sector, which follows the shift in purchasing power.
The pace of growth in city centre retail is correspondingly high. High demand for attractive sales space is ensuring strong growth in rents and the construction of new
shopping centres, which for some years have been opened almost exclusively in cities. However, for companies in many other sectors too, locations in growing cities
are increasingly important. Here they can still most easily hire the staff they need. As
a result of population growth and the flourishing economy, the sales potential is
greater here too. Customers outside the conurbation may also be reached rapidly
via good transport infrastructure. For the growing number of globally active companies, major cities with an international airport are particularly interesting in order to
shorten travel times to customers or foreign locations.
Business and retail also moving
into cities
Urbanisation in conjunction with migration from rural areas is having far-reaching
consequences for the property market: opportunities in growth regions are offsetting
risks in areas which are contracting. While demand for properties in many conurbations exceeds supply, in other places there is insufficient demand. In the worst case
scenario, existing properties cannot be sold or rented even with major price concessions.
Far-reaching consequences for
the property market: risks in rural
regions …
In contrast, the prime locations on which we focus in this report, with their future potential, are on the winning side. The opposing trends in regions are likely to intensify,
if the demographic trend leads to a decline in the population as forecast. The conurbations will probably remain largely unaffected by this negative trend. Property demand will therefore be concentrated on these "focal points". The expected aboveaverage growth is resulting in massive demand from investors which has clearly
driven up the prices of office and retail properties in the core sector, and of apartments. However, the achievable returns have fallen sharply as a consequence despite growth in rents.
… offsetting opportunities in
conurbations
7
Real Estate Market Germany 2014 | 2015
RETAIL PROPERTIES
Market development, trends and outlook
The EHI Retail Institute has written that "The retail sector follows its customers and
they have re-discovered the city centre", thus summing up in a nutshell the retail
trend of recent years. It is not therefore surprising that two thirds of the shopping
centres built since the new millennium have been located in city centres, and from
2011 to 2013 the figure even exceeded three quarters. Conversely, only individual
green field projects have been initiated. This is where the success story began for
what are currently around 450 German shopping centres, since the opening, exactly
50 years ago, of the first German shopping centre - the Main-Taunus Centre - at the
entrance to the city gates of Frankfurt.
Everyone wants to move
into the city!
The "back to the city" trend seems to be so sustainable that IKEA has opened its
first city branch this year in Hamburg-Altona. The Swedish furniture giant's business
model is in fact based on the availability of spacious greenfield sites needed for
large-scale sales and parking space to display furniture, and for customers to transport their purchases themselves by car. However, habits change. Young people in
large cities are potential customers for IKEA, however they regard having their own
car as less important than was the case in the past. This makes it more difficult to
transport heavy flat-pack furniture. On the other hand, online shopping and comfortable home delivery are very popular. IKEA has reacted to this trend. Other retailers,
for example furniture or DIY stores, whose concepts are also based on "customers
with cars", are likely to follow developments in Hamburg-Altona very closely. Even
pure online retailers such as Zalando obviously regard it as beneficial to have a
presence in the city. The online fashion retailer now operates two outlet stores in
Berlin and Frankfurt.
This even applies to those who
didn't really intend to do so
CITY CENTRE SHOPPING CENTRES MEET THE TREND
PRIME RETAIL RENTS ARE ONLY RISING IN CITY CENTRES
300
250
200
150
64%
47%
68%
76%
100
45%
50
25%
0
1993
1964-1990 1991-1995 1996-2000 2001-2005 2006-2010 2011-2013
greenfield site
outside city center
1997
city center
Source: EHI Retail Institute
2001
2005
2009
prime rent: city center in EUR/sqm
prime rent: outside city center in EUR/sqm
2013
Source: BulwienGesa, own calculations
The two examples above of companies which - in a move away from their original
business models - have decided to set up branches in the city, each selected a city
district. This may of course change again, since the attractions of prime locations
remain undiminished. Ultimately only 1A sales space has benefited so far from the
8
Success of large cities has little impact on city districts
Real Estate Market Germany 2014 | 2015
boom in large cities with their ongoing strong demographic growth. Essentially,
growth in the retail sector is focused on shopping streets several hundred metres
long and on stylish new shopping centres. This is evident from the trend in rents
shown overleaf. While prime rents in city districts have been stagnating for 20 years,
they have been rising almost continuously in the 1A locations of city centres since
the end of the last millennium.
However, city districts and secondary locations could be given a boost if retail giants
such as IKEA and Zalando open branches there, thus leading to an increase in footfall. The "run" on city centre sales space is so great that the formerly strict geographic division between 1A and secondary locations seems to be gradually eroding.
In the major cities there are various examples involving either an extension of prime
locations - e.g. Goethestraße in Frankfurt - or an upgrading of formerly secondary or
city district sites -e.g. Hackescher Markt in Berlin. This can happen, for example, by
means of skilful project development on the edges of prime locations, or simply by
opening a branch of a popular label in a sidestreet. However, space is in increasingly short supply in 1A locations, not only because the number of national and international chains and brand producers seeking outlets here is increasing. Even supermarkets and drugstores are no longer being deterred by the high rents and are
moving into attractive city centre locations with city concepts. Examples are the Aldi
on the "Kö" in Dusseldorf and the dm-Markt in the new "Zeil 123" building. Both outlets were opened in June this year.
RETAIL SPACE AND THE NUMBER OF …
140
130
retail space in sqm m
… SHOPPING CENTRES CONTINUE TO GROW
retail space in sqm m
18
16
110
15
100
14
90
13
80
12
70
11
40
1993
1997
2001
2005
2009
2013
change in units (rhs)
12
200
8
100
4
0
Source: Feri, own calculations
16
300
9
8
20
number (lhs)
400
10
Germany (lhs)
Top-7 (rhs)
50
500
17
120
60
1A locations expanding
363
372
384
399
414
428
435
444
453
460
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e
Source: Statistica, own calculations
While sales space in 1A locations is currently increasing as a result of stylish new
shopping centres, project developments and the upgrading of sites, the structure of
demand may alter in future. The most promising prospects in the city recently have
been hybrid concepts consisting of a combination of first-class goods presentation
in-store and an attractive online shop. This provides an opportunity to more successfully integrate a "live" shopping experience with an internet shop and mail order logistics, and to operate from much smaller stores than the large-scale space often
used in the past. Such "accessible online shops" which offer mainly bestselling
products from a range, would result in a decline in rented space on the back of a
static number of rental agreements.
9
Is demand increasing for smaller
shops in the city centre?
0
Real Estate Market Germany 2014 | 2015
RETAIL SALES (EXCL VEHICLES) INCREASING
115
RETAIL: CONSUMER AND BUSINESS CLIMATE DETERIORATING
2000 = 1000
12
in points
balance of replies
10
110
20
8
10
6
105
0
4
100
90
2000
-10
2
-20
0
95
-2
real
nominal
(6-month-average)
2002
2004
2006
2008
2010
2012
-4
2007
2014
Source: Bundesbank, own calculations
2008
2009
70
8
30
20
6
50
5
40
4
2014
-40
10
2010
2012
2014e
Amazon: net turnover in USD bn
20
2
2008
Stable trends: Increasing sales,
good consumer climate, growing
online retail
30
3
2006
2013
60
7
2004
2012
80
9
40
2002
2011
AMAZON'S SALES CONTINUING TO GROW STRONGLY
10
retail sales in EUR bn (lhs)
share of total retail sales in % (rhs)
2000
2010
Source: ifo, GfK
ONLINE SHOPPING NOW ACCOUNTS FOR ALMOST 10% OF SALES
0
-30
GfK consumer climate (lhs)
ifo business climate retail (rhs)
In addition to the "city" trend, three important developments for the German retail
sector - growing retail sales, a good consumer climate and growing online retail - are
continuing. Retail sales, which had been stagnating for many years in both nominal
and real terms, have maintained the upward trend which started in 2010 in 2014.
Given the positive labour market conditions and solid wage agreements, this is likely
to continue. Private consumers are thus continuing to support economic growth in
Germany to a greater extent than the export sector which has been adversely affected by geopolitical crises. However, it is not possible for the retail trade to remain
unaffected by the negative impact of international crises. This is evident from the
graph above on the right. At the moment, the longstanding strong upward movement
in the GfK consumer climate has however suffered a minor setback - at a high level.
The ifo business climate had already shown a slight deterioration at an earlier stage.
50
30
1
10
0
0
Source: HDE, RHI Retail Institute
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
Source: Amazon, EHI Retail Institute
However, high street retail can only benefit to a limited extent because an ever increasing proportion of total retail sales is being generated by rapid growth in online
shopping. At the moment, around 9 per cent of total sales of approximately EUR
450bn is generated online. However, the proportion of internet sales is likely to reach
10
Online sales making life difficult for
high street retail
Real Estate Market Germany 2014 | 2015
double-digit percentages soon. For many product groups, such as telecommunications or media, the proportion of sales generated via the internet already exceeds
high street retail. The ongoing growth in retail sales space is not therefore ultimately
underpinned by corresponding sales growth. Assuming constant rents, the average
proportion of costs relative to rental costs is thus already increasing, and is denting
profitability. The fact that rents in 1A sites in prime locations are nevertheless increasing underpins their major attractions and the desire to have a physical presence in shopping streets. Even major cities which rank below the prime locations cities with a maximum population of 500,000 - are showing a marked decline in the
pace of rent growth.
ONLY THE TOP LOCATIONS1 HEAD THE RETAIL STAKES
300
FOREIGN VISITORS ARE OFTEN HIGH-SPENDING
average amount of TaxFree-purchases in EUR (2013)
prime rent in EUR/sqm
280
Top-7
Regional-12
260
240
220
200
180
160
140
120
100
80
1995
1999
2003
2007
2011
2015e
Source: BulwienGesa, own calculations
287
327
Stuttgart
Berlin
362
376
Cologne Hamburg
428
463
Munich Dusseldorf Frankfurt
Source: Global Blue
The "multi-class" society in the retail sector is also partly attributable to the large
number of visitors from home and abroad. Foreign guests in particular, who are of
course mainly interested in the capital city and the other most important cities in a
country, spend large amounts. The highest levels relate to average tax free purchases by the Chinese, which reached around EUR 580 in 2013. US Americans
spent on average EUR 317, and Russians a slightly higher amount of EUR 336.
More than 40 per cent of tax free purchases relate to clothing and fashion goods,
and around 25 per cent to watches and jewellery. Of the seven prime locations, tax
free purchases are highest in Frankfurt thanks to the airport, with travellers tending
to spend large amounts at the end of a trip, before flying home.
1
Top 7: Index of cities of Berlin, Dusseldorf, Frankfurt, Hamburg, Cologne, Munich and Stuttgart; Regional 12: Index of cities Augsburg, Bremen, Darmstadt, Dresden, Essen, Hannover,
Karlsruhe, Leipzig, Mainz, Mannheim, Munster and Nuremberg
11
562
International guests are good
retail customers
Real Estate Market Germany 2014 | 2015
Retail: Comparison of prime locations
The longstanding strong upward trend in prime rents remains intact in all seven locations. The trend is being driven by steady demand for first-class sales space in 1A
locations. The growth rate is so high that even the recession in the German economy in 2008 and 2009 did not lead to a decline in rents, but only a temporary stagnation. However, the overall picture has altered slightly in recent years: in the past,
Munich occupied peak position alone, and was followed by a "close-run pack". Today Munich is still well ahead with prime rents of EUR 320 per sqm, but the line-up
of locations which follows has divided into two. While Berlin, Frankfurt and Hamburg
show average prime rents of around EUR 270 per sqm, Dusseldorf, Cologne and
Stuttgart come in at around EUR 240.
PRIME RENTS CONTINUE TO RISE …
… BUT UPWARD TREND LIKELY TO SLOW
prime rent in EUR/sqm
Berlin
340
320
Cologne
300
320
Dusseldorf
340
280
280
Hamburg
240
260
Munich
220
200
Stuttgart
180
Top-7
240
220
160
200
140
1999
2003
2007
2011
prime rent in EUR/sqm
300
Frankfurt
260
120
1995
Upward trend in prime rents
remains unbroken
Berlin Cologne Dussel- Frankdorf
furt
2012
2015e
Source: BulwienGesa, own calculations
2013
Hamburg
2014e
Munich
Stuttgart
Top-7
2015e
Source: BulwienGesa, own calculations
The high expansion rate in the retail sector in Berlin has been the main factor driving
the strong growth in space-weighted average prime rents in the last two years; however, prime rents in Dusseldorf, Frankfurt and Hamburg have also increased sharply.
The upward trend should continue this year, although the first-half trend indicates
that the growth rate is likely to be significantly lower. At the levels now achieved,
prime rents are obviously now more often reaching the pain threshold of what tenants are prepared to pay.
12
Berlin the best "performer" in
2012 and 2013
Forecast: Signs of subdued rent
growth in 2014 and 2015
Real Estate Market Germany 2014 | 2015
PRIME RENTS Y-O-Y IN PER CENT
CHANGE IN PRIME RENTS SINCE 2003 IN PER CENT
13
9
8
7
4
2
0
Berlin
4
4
2
11 1
12
Cologne Dusseldorf
2012
33
6
6
1
2
Frankfurt
2013
33
22
22
0
Hamburg
Munich
2014e
00
Stuttgart
1
17
Stuttgart
15 14
48
26
17
9
Munich Dussel- Cologne
dorf
from 2003 to 2008
Source: BulwienGesa, own calculations
21 21 22
19 20 19
20
7
2015e
47
44
28
2
Top-7
40
37
24
5
4
34
43
Top-7
from 2008 to 2013
Hamburg
Frankfurt
Berlin
from 2003 bis 2013
Source: BulwienGesa, own calculations
However, on closer scrutiny, the major differences in rent trends between the various locations in individual years have been largely balanced out. On average, prime
rents have risen by just over 40 per cent in the last ten years. The growth rate is
marginally higher in Berlin and Frankfurt, but slightly lower in Dusseldorf and Cologne. The upward trend in Munich and Stuttgart is slightly slower. Very high rents in
Munich are likely to dampen the upward momentum. In Stuttgart, as in Cologne,
rents have shown virtually no growth in the last five years, thus leading to a slightly
more negative overall result. Conversely, rent trends in the other five locations have
been broadly similar in the five-year periods from 2003 to 2008 and from 2008 to
2013.
Fairly homogenous long-term
trend in locations
Total retail space in the seven top locations ranges from just over one million sqm in
Stuttgart to just over six million sqm in Berlin. The proportion of city centre sales
space ranges from just over 10 per cent to almost 40 per cent. Overall, total sales
space has expanded by around 30 per cent in the last ten years. In Dusseldorf and
Frankfurt the figure has exceeded 40 per cent. In contrast, Cologne has shown
growth of less than 10 per cent. It is therefore surprising that the growth in prime
rents in Cologne has not been more marked. On average for the seven locations, total sales space has grown by around 2.5 per cent annually. In the last three years
the growth in space has however been visibly weaker than in the previous decade.
Sales space continues to grow, but
has slowed consistently
13
Real Estate Market Germany 2014 | 2015
RETAIL SPACE IN THE SEVEN TOP LOCATIONS …
…CONTINUES TO GROW (GROWTH OVER THREE YEARS IN PER
CENT)
70
7.000
retail space in thousand sqm (lhs)
6.000
60
thereof inner-city-area (lhs)
share of inner-city retail space in % (rhs)
5.000
40
3.000
30
2.000
20
1.000
10
Stuttgart
Dussel- Cologne Frankdorf
furt
Munich
Hamburg
Berlin
1011 9
8
5
3
11
101010
5
5
5
0
4
2
56
10
99
6
5
4
2
0
Berlin
0
Cologne Dusseldorf
2002-2004
Source: Feri, Comfort, own calculations
Frankfurt
2005-2007
Hamburg
Munich
2008-2010
Stuttgart
Top-7
2011-2013
Source: Feri, own calculations
One important factor which adds to the major attractions of the top locations for retailers is high purchasing power. With the exception of Berlin - where the purchasing
power indicator is below the average of 100 for Germany as a whole - the locations
show very good levels of purchasing power, ranging from 10 (Hamburg) to 30 per
cent (Munich), thus exceeding the German "benchmark". City dwellers can afford to
purchase "special" items more often in addition to everyday necessities, and are
keen to do so in the 1A locations. In addition to the top locations, very few major cities show such positive levels of purchasing power. The above-average "centrality" of
the attractive cities is not surprising. However, levels fall short of the significantly
higher figures reported for some major regional centres. This nevertheless seems
logical because everyday necessities, which account for a large proportion of consumer spending, are purchased directly where people live.
ABOVE-AVERAGE FIGURES FOR PURCHASING POWER …
… AND CENTRALITY
140
140
120
120
100
100
1A locations benefit from high
purchasing power of Top 7
80
80
60
60
40
40
20
0
15
13
15
12
11
50
4.000
0
21
Berlin
Hamburg
Cologne
purchasing power
20
German average
0
Stuttgart
Frankfurt
Dusseldorf
Munich
Source: Comfort, own calculations
centrality
German average
Berlin
Frankfurt
Hamburg
Source: Comfort, own calculations
14
Munich
Dusseldorf
Stuttgart
Cologne
Real Estate Market Germany 2014 | 2015
European retail - comparison of top locations
On a European comparison, prime rents in top German locations are higher than
average. However, there is a major divergence from the most expensive cities - relative to retail rents. In Zurich, prime rents are almost double the level in Munich as
Germany's most expensive major city. However, even Zurich lags far behind the
European frontrunners London and Paris.
Prime rents in top locations slightly
above European average
PRIME RETAIL RENTS IN EUROPE IN EUR PER SQM - TOP GERMAN LOCATIONS ARE SLIGHTLY ABOVE-AVERAGE
1.000
average
800
600
400
200
0
Source: CBRE, own calculations
Per: Q2/2014
15
Real Estate Market Germany 2014 | 2015
Berlin: Retail properties
PRIME RETAIL RENTS IN EURO PER SQM
PER CAPITA RETAIL SPACE IN SQM
300
2,2
250
2,0
200
1,8
150
1,6
100
1,4
50
2005
Berlin
2007
Top-7
2009
Berlin
Regional-12
2011
2013
1,2
2015e
Source: BulwienGesa, Feri, DZ BANK Research forecast
2005
Top-7
2007
2009
2011
Regional-12
2013
2015e
Source: Feri
Berlin has developed very positively, both in overall terms and as a shopping destination, and is attracting growing interest from retailers and investors. As a result of
the stable economic trend in Germany, the focus has shifted more strongly to the
capital city of the largest economy in Europe. There is also a positive trend in the
fairly under-developed economy of Berlin, and a high and growing number of visitors, who contribute a quarter of retail sales - thus balancing out the below-average
purchasing power of the local population. The Berlin retail sector can thus extend its
role as a test market for the German retail sector and draw benefit from the international retail chains which are surging into the German market. The most recent example is the Japanese fashion chain Uniqlo, which has opened a large store of
2,700 sqm in Tauentzienstraße. As a result of buoyant demand, trendy locations
such as Hackesher Markt are developing into 1A locations. And prime rents have
risen at the fastest rate among the top 7 since 2009, by almost 5 per cent annually.
However, there is little scope for further growth this year based on the fact that levels
have risen to EUR 270 per sqm and given the strong expansion of space. Despite
the existence of more than 60 shopping centres already, another 120,000 sqm will
be added by Bikini Berlin and the Mall of Berlin.
Berlin has developed very
successfully as a location
Test market for Germany
After dynamic rent growth, space
expansion limits further rises
RETAIL PROPERTIES IN BERLIN
2012
2013
2014e
2015e
Demand
Per capita disp. income
in EUR/month
1,193
1,204
1,219
Per capita disp. income
in % y-o-y
0.7
0.9
1.3
1,234
1.2
Unemployment rate (BA)
In %
12.3
11.7
11.1
10.8
Retail sales
in % y-o-y
1.9
2.4
2.6
1.6
Retail space
in million m²
6.0
6.1
6.3
6.4
Retail space
in % y-o-y
1.6
2.8
2.5
2.5
Prime / secondary locations in EUR/m²
240
/
14.0
270
/
14.0
270
/
14.0
275
/
14.0
Prime / secondary locations in % y-o-y
6.7
/
0.0
12.5
/
0.0
0.0
/
0.0
1.9
/
0.0
Supply
Retail rents
Source: Feri. BulwienGesa, DZ BANK Research forecast
16
Real Estate Market Germany 2014 | 2015
Cologne: Retail properties
PRIME RETAIL RENTS IN EURO PER SQM
PER CAPITA RETAIL SPACE IN SQM
300
2,4
250
2,2
Cologne
Top-7
Regional-12
2,0
200
1,8
150
1,6
100
Cologne
50
2005
2007
Top-7
2009
1,4
Regional-12
2011
2013
1,2
2015e
Source: BulwienGesa, Feri, DZ BANK Research forecast
2005
2007
2009
2011
2013
2015e
Source: Feri
The city of Cologne, which has a population of one million, is the second major international shopping destination in the West. While the luxury segment is more significant in Dusseldorf, Cologne is geared more to "mainstream consumption". The
city has two of the German consumer locations with the highest footfall. However,
many trendy shops are also situated in the city, particularly in Ehrenstraße. The
supply is rounded off with the luxury location at Wallraffplatz. In conjunction with
population growth, the large hinterland and high number of tourists from all over the
world, Cologne is an interesting location for the retail trade. This ensures good demand for space in 1A locations, although the rate at which rents have increased in
recent years has been weaker than in most other top locations. The willingness of
customers seeking retail space to pay seems to have largely reached its limits at the
current level. We anticipate at best further moderate growth in rents. However, positive demand could lead to an upgrading of secondary locations. The low per capita
sales space is striking. This is unlikely to change much in the top locations for the
time being. No large projects are planned in the city of Cologne following the completed revitalisation of the Neumarkt-Galerie. Following the opening of a 8,000 sqm
Primark flagship store here in 2014, the location is now benefiting from this "crowd
puller".
Consumer-oriented shopping
destination in the West
Potential for prime rents seems
limited
RETAIL PROPERTIES IN COLOGNE
2012
2013
2014e
2015e
Demand
Per capita disp. income
in EUR/month
1,557
1,570
1,587
Per capita disp. income
in % y-o-y
1.5
0.8
1.1
1,604
1.1
Unemployment rate (BA)
in %
9.5
9.4
9.8
9.5
Retail sales
in % y-o-y
2.8
2.4
2.4
1.6
Retail space
in million m²
1.4
1.4
1.4
1.4
Retail space
in % y-o-y
0.0
0.2
0.4
0.3
Prime / secondary locations in EUR/m²
235
/
12.0
240
/
12.5
243
/
0.0
246
/
0.0
Prime / secondary locations in % y-o-y
4.4
/
0.0
2.1
/
4.2
1.3
/
0.0
1.2
/
0.0
Supply
Retail rents
Source: Feri, BulwienGesa, DZ BANK Research forecast
17
Real Estate Market Germany 2014 | 2015
Dusseldorf: Retail properties
PRIME RETAIL RENTS IN EURO PER SQM
PER CAPITA RETAIL SPACE IN SQM
300
2,2
250
2,0
200
1,8
150
1,6
100
1,4
50
2005
Dusseldorf
2007
Top-7
2009
Dusseldorf
Regional-12
2011
2013
1,2
2015e
Source: BulwienGesa, Feri, DZ BANK Research forecast
2005
2007
Top-7
2009
2011
Regional-12
2013
2015e
Source: Feri
Dusseldorf is in demand as a retail location due to its high purchasing power and the
large population of the Rhine-Ruhr region. The luxury shopping street "Kö" is also
well known as a shopping destination outside the region. The sales space in 1A locations in Dusseldorf, which include Schadowstraße and Flingerstraße, has been
extended with the architecturally successful and recently completed Kö-Bogen. The
city has also become more attractive as a shopping destination due to the revitalisation and linking up of Sevens and the Kö-Galerie. The progress with the western
side of the Königsallee, for example as a result of the reconstruction of the TrinkausPassage, is also positive. There is also a prospect of the location's attractions being
enhanced by urban development measures, such as the demolition of the "Tausendfüßler" elevated road, the new car tunnel, and the U-Bahn link to Schadowstraße.
However, at the moment, retail activity in the city centre is still being adversely affected by the construction work. In conjunction with the growth in sales space and
the 20 per cent increase in rents between 2008 and 2013, prime rents are likely to
stagnate this year. Nor are any major surges expected in 2015. However, sooner or
later, there will be "upward" potential as the location is upgraded, and based on the
generally positive demand for first-class retail space. Dusseldorf remains well positioned in terms of competing with other large cities and centres in the vicinity.
Urban development measures,
revitalisation of centres and new
build projects make locations
even more attractive
However, construction work
currently hitting retail sector
RETAIL PROPERTIES IN DUSSELDORF
2012
2013
2014e
2015e
Demand
Per capita disp. income
in EUR/month
1,745
1,770
1,796
Per capita disp. income
in % y-o-y
1.7
1.4
1.5
1,821
1.4
Unemployment rate (BA)
in %
8.9
8.8
9.0
8.7
Retail sales
in % y-o-y
3.1
3.5
3.1
2.1
Retail space
in million m²
1.2
1.2
1.2
1.3
Retail space
in % y-o-y
0.3
2.4
1.2
1.3
Prime / secondary locations in EUR/m²
220
/
13.5
240
/
14.0
243
/
0.0
247
/
0.0
Prime / secondary locations in % y-o-y
1.4
/
0.0
9.1
/
3.7
1.3
/
0.0
1.6
/
0.0
Supply
Retail rents
Source: Feri, BulwienGesa, DZ BANK Research forecast
18
Real Estate Market Germany 2014 | 2015
Frankfurt: Retail properties
PRIME RETAIL RENTS IN EURO PER SQM
PER CAPITA RETAIL SPACE IN SQM
300
2,2
250
2,0
200
1,8
150
1,6
100
1,4
Frankfurt
50
2005
2007
Top-7
2009
Frankfurt
Regional-12
2011
2013
1,2
2015e
Source: BulwienGesa, Feri, DZ BANK Research forecast
2005
2007
Top-7
2009
2011
Regional-12
2013
2015e
Source: Feri
Frankfurt is growing strongly: for years the numbers of inhabitants, the working
population, and visitors from elsewhere in Germany and abroad have been increasing. The city is also becoming more attractive as a shopping destination, and is
drawing in both retailers and investors alike. As a result of the buoyant demand, the
significant expansion of sales space has been absorbed without any problem. 2013
saw the opening of the Skyline Plaza, a large city centre shopping centre with 170
shops. It was followed this year by One Goethe Plaza, which has increased the
sales space in the luxury location of Goethestraße by 5,000 sqm. The shortage of
1A sales space is also now benefiting secondary locations: the Italian label Brioni
has opened an outlet in Alte Rothofstraße, which is a side street of Goethestraße.
The range of products on offer is also becoming more diverse. Last year a store was
opened by the smaller MA*, whose trendy shops successfully complement the city's
chain stores. There is also a new development on Zeil: a new building is replacing
the former Hako-Haus near the Hauptwache. However, despite a successful upgrade, the fortunes of the Zeilgalerie opposite have still not been reversed. The
search for a successful concept for the narrow, seven-floor building therefore continues. Following the expansion of space and a sharp rise in rents in recent years,
prime rents are however likely to increase more slowly this year and next year.
Frankfurt is growing and attracting
retailers and investors alike
Space expansion and sharp rent
rise likely to dampen growth in
prime rents
RETAIL PROPERTIES IN FRANKFURT
2012
2013
2014e
2015e
Demand
Per capita disp. income
in EUR/month
1,478
1,501
1,528
Per capita disp. income
in % y-o-y
1.4
1.5
1.8
1,554
1.7
Unemployment rate (BA)
in %
7.4
7.5
7.2
7.0
Retail sales
in % y-o-y
2.7
1.4
1.7
2.4
Retail space
in million m²
1.4
1.5
1.5
1.5
Retail space
in % y-o-y
0.7
4.3
2.3
1.2
Prime / secondary locations in EUR/m²
265
/
18.0
280
/
18.0
283
/
0.0
288
/
0.0
Prime / secondary locations in % y-o-y
3.9
/
0.0
5.7
/
0.0
1.1
/
0.0
1.8
/
0.0
Supply
Retail rents
Source: Feri, BulwienGesa, DZ BANK Research forecast
19
Real Estate Market Germany 2014 | 2015
Hamburg: Retail properties
PRIME RETAIL RENTS IN EURO PER SQM
PER CAPITA RETAIL SPACE IN SQM
300
2,4
Hamburg
Top-7
Regional-12
2,2
250
2,0
200
1,8
150
1,6
100
50
2005
1,4
Hamburg
2007
Top-7
2009
Regional-12
2011
2013
1,2
2015e
Source: BulwienGesa, Feri, DZ BANK Research forecast
2005
2007
2009
2011
2013
2015e
Source: Feri
Hamburg, with its population of 1.8 million, is the second largest city in Germany and
is also an outstanding shopping destination in the North of the country. The high
purchasing power of the city's population is enhanced significantly by the large hinterland of Lower Saxony and Schleswig-Holstein. There is also a high volume of
tourists and business travellers. This major purchasing potential makes Hamburg a
sought-after location. Its broad supply structure - extending from classic shopping
locations such as Spitalerstraße to distinctly luxury locations such as Neuer Wall - is
also favourable. The city on the Elbe is thus interesting in terms of the expansion
strategies of national and international chains, and demand for space is correspondingly high. Due to the small proportion of city centre sales space, 1A space is in
short supply, and is far from sufficient to meet demand. The last major expansion of
space was in 2006 with the opening of the Europa Passage. Accordingly, prime
rents have risen sharply in recent years. From 2008 to 2013 they rose by more than
20 per cent. Project developments in the top locations will create further sales
space. However, 1A locations are also likely to grow as a result of the upgrading of
what are currently secondary locations. The gradual expansion of space is likely to
be accompanied by more moderate rent rises. We expect prime rents to increase by
around 2 per cent respectively in 2014 and 2015.
Outstanding shopping destination
in North Germany …
… is of major interest to national
and international chains
Prime rents likely to rise by
around 2 per cent in 2014 and
2015 respectively
RETAIL PROPERTIES IN HAMBURG
2012
2013
2014e
2015e
Demand
Per capita disp. income
in EUR/month
1,866
1,896
1,930
1,959
Per capita disp. income
in % y-o-y
1.4
1.6
1.8
1.5
Unemployment rate (BA)
in %
7.5
7.3
7.7
7.4
Retail sales
in % y-o-y
1.8
2.4
2.6
2.5
Retail space
in million m²
2.9
3.0
3.0
3.0
Retail space
in % y-o-y
0.7
1.3
1.5
1.4
Prime / secondary locations in EUR/m²
245
/
40.0
260
/
40.0
265
/
0.0
270
/
0.0
Prime / secondary locations in % y-o-y
4.3
/
0.0
6.1
/
0.0
1.9
/
0.0
1.9
/
0.0
Supply
Retail rents
Source: Feri, BulwienGesa, DZ BANK Research forecast
20
Real Estate Market Germany 2014 | 2015
Munich: Retail properties
PRIME RETAIL RENTS IN EURO PER SQM
PER CAPITA RETAIL SPACE IN SQM
350
2,4
300
2,2
250
2,0
200
1,8
150
1,6
100
1,4
50
2005
Munich
2007
Top-7
2009
Regional-12
2011
2013
1,2
2015e
Source: BulwienGesa, Feri, DZ BANK Research forecast
Munich
2005
Top-7
2007
2009
2011
Regional-12
2013
2015e
Source: Feri
The Bavarian capital is by far the most expensive shopping destination in Germany.
Prime rents are 20 per cent above average for the Top 7. There are good reasons
for this: the economically strong and high-earning area of Greater Munich, together
with the very large number of visitors from Germany and abroad, result in exceptionally high purchasing power. The city's attractions as a shopping destination also
benefit from the very diverse range of goods on offer. Munich stands out positively
from other 1A locations which have a high volume of chain stores with a large number of shops managed by the owners themselves. And sales floor productivity in the
city centre is the highest among the top locations at EUR 6,500 per sqm. Munich
thus tops the list of desirable locations for virtually all chain stores. High demand for
1A space ensures that new retail projects - recent examples include the HofstattPassage and the Palais an der Oper - can be absorbed by the market quickly and
without any problem. However, retail activity in Munich also has its limits, although
these are ultimately based on its own success. The already high level of prime rents
of currently EUR 320 per sqm is slowing the growth rate: in Berlin, Dusseldorf,
Frankfurt and Hamburg prime rents have risen faster in the last five years. This trend
is likely to persist. We expect the level of rents in Munich to increase further, but at a
more moderate pace.
Munich's retail sector still unique
in Germany
Weaker growth momentum based
on already very high rents
RETAIL PROPERTIES IN MUNICH
2012
2013
2014e
2015e
Demand
Per capita disp. income
in EUR/month
1,808
1,827
1,850
1,875
Per capita disp. income
in % y-o-y
1.3
1.1
1.3
1.3
Unemployment rate (BA)
in %
5.0
5.2
5.4
5.2
Retail sales
in % y-o-y
2.4
1.8
2.0
2.6
Retail space
in million m²
2.0
2.0
2.0
2.1
Retail space
in % y-o-y
2.5
2.2
2.0
1.9
Prime / secondary locations in EUR/m²
305
/
35.0
315
/
35.0
320
/
0.1
325
/
0.1
Prime / secondary locations in % y-o-y
3.4
/
0.0
3.3
/
0.0
1.6
/
0.0
1.6
/
0.0
Supply
Retail rents
Source: Feri, BulwienGesa, DZ BANK Research forecast
21
Real Estate Market Germany 2014 | 2015
Stuttgart: Retail properties
PRIME RETAIL RENTS IN EURO PER SQM
PER CAPITA RETAIL SPACE IN SQM
300
2,4
250
2,2
Stuttgart
Top-7
Regional-12
2,0
200
1,8
150
1,6
100
50
2005
1,4
Stuttgart
2007
Top-7
2009
Regional-12
2011
2013
1,2
2015e
Source: BulwienGesa, Feri, DZ BANK Research forecast
2005
2007
2009
2011
2013
2015e
Source: Feri
Retail activity in the sixth largest German city benefits from a population of 2.5 million and an economically strong hinterland. Many successful companies are based
in the region - for example the automotive sector has a strong presence there. Purchasing power is higher than average. Similar to Munich and Cologne, the proportion of chain stores is slightly lower, which has a positive impact on the diversity of
supply. The city's major attractions as a retail destination are reflected in buoyant
demand for 1A space, which cannot be covered by supply. However, in contrast to
the top locations as a whole, the demand overhang has not led to a sharp rise in
prime rents. The growth of 7 per cent over five years represents only a good third of
the average for the Top 7. The political infighting concerning Stuttgart 21 may have
had a negative impact here. The scope for rent growth is however likely to be severely limited this year and in the following years. The reason for this is three major
retail projects which are extending sales space in the city by a total of 100,000 sqm
within a relatively short period of time. These are the Gerber, which opens in September 2014 and is the smallest of the three projects with 25,000 sqm. A month later
this will be followed by the much larger Milaneo with 43,000 sqm. The DorotheenQuartier should then follow in 2016 with 38,000 sqm and a direct link with the pedestrian zone.
Attractive shopping location in
economically strong region
Three large retail projects will cap
rent growth in future years
RETAIL PROPERTIES IN STUTTGART
2012
2013
2014e
2015e
Demand
Per capita disp. income
in EUR/month
1,731
1,749
1,767
Per capita disp. income
in % y-o-y
1.4
1.0
1.1
1,786
1.1
Unemployment rate (BA)
in %
5.6
6.2
5.4
5.3
Retail sales
in % y-o-y
2.0
1.8
1.7
1.7
Retail space
in million m²
1.0
1.0
1.0
1.1
Retail space
in % y-o-y
-0.1
1.7
2.8
4.2
Prime / secondary locations in EUR/m²
225
/
14.0
235
/
14.0
235
/
0.0
235
/
0.0
Prime / secondary locations in % y-o-y
0.0
/
0.0
4.4
/
0.0
0.0
/
0.0
0.0
/
0.0
Supply
Retail rents
Source: Feri, BulwienGesa, DZ BANK Research forecast
22
Real Estate Market Germany 2014 | 2015
OFFICE PROPERTIES
Market development, trends and outlook
The German market for office properties has survived difficult times in the recent
past as a result of two severe economic crises. The first was triggered by the bursting of the dot-com-bubble in 2000, which was compounded by the 9/11 terrorist attacks. The second followed not quite ten years later in the wake of the global financial market crisis caused by the collapse of Lehman. Conversely, the current situation is much improved. The economy is likely to show solid growth of around 2 per
cent this year. And the number of people in work has climbed to a record level of
more than 42 million. The unemployment rate has almost halved within a decade.
The continuing favourable conditions in the labour market are having a particularly
positive impact on demand for office space.
General conditions for the German
office market are currently good
However, the steady growth in employment since 2005 is not reflected in any visible
expansion of the supply of office space in the top seven locations. While the volume
of new office space relative to the existing supply increased sharply by an average
of more than 2 per cent from 1995 to 2004, since 2005 the figure has been less than
half this level at 1 per cent per year. The recent expansion in activity with the development of new office projects this year will however at least ensure that the volume
of new space will increase by more than 1 per cent again after three years.
New office space has more than
halved since 2005
DESPITE SOLID ECONOMIC GROWTH AND A POSITIVE LABOUR
MARKET, OFFICE SPACE IS INCREASING ONLY MODERATELY
THE RATIO OF OFFICE SPACE AND OFFICE EMPLOYMENT IS BACK
AT THE LEVEL RECORDED TOWARDS THE END OF THE 1990S
5
12
130
4
10
125
3
8
120
2
6
115
1
4
0
-1
1995
1998
2001
2004
2007
2010
2013
Top 7: office space, 2000=100
110
2
effective -5,1%
Top 7: office workers, 2000=100
105
0
100
GDP YOY in % (lhs)
Top7: growth of office space in % of the total office space (lhs)
unemployment rate in % (rhs)
95
1995
Source: BulwienGesa, Feri, DZ BANK
1998
2001
2004
2007
2010
2013
Source: Feri
The moderate growth in office space and the much more dynamic expansion of office employment have converged again closely - from a joint starting point in 1995.
The widest divergence between the two figures occurred in 2005, when the construction of new office space fuelled by the dot-com-boom coincided with the peak of
job-shedding caused by the recession. This led to a sharp increase in vacancy rates
in the office market. In 2010 - after the next crisis - the vacancy rate was even
higher. Prime rents fell below their 1995 levels. However, how does the situation
look today? Have vacancy rates and prime rents - adjusted for inflation - also moved
back towards the more positive levels of 1995?
23
Relative divergence between office
employment and office space has
contracted sharply
Real Estate Market Germany 2014 | 2015
TOP LOCATIONS: PRIME RENTS AND VACANCY RATES SINCE 1995
33
11
30
10
27
9
24
8
21
7
18
6
15
5
12
4
9
3
6
0
1998
2001
2004
2007
2010
36
35
34
33
office space per office worker without
vacant office space in sqm
1
Top-7: vacancy rate in % (rhs)
1995
37
2
Top-7: prime rent in EUR/sqm (lhs)
3
OFFICE SPACE PER EMPLOYEE DECLINING
32
0
2013
Source: BulwienGesa, Feri, own calculations
1995
1998
IFO BUSINESS CLIMATE INDEX FALLING
120
6
115
4
110
2
105
0
100
-2
95
-4
90
-10
2000
2002
2004
2006
2008
2010
2013
Office space per job has slipped
back to the 1995 level
2010
2012
2014
4
4
2
2
0
-2
0
-4
-2
-4
80
index (rhs)
6
6
85
IFO business climate index
index points MOM (lhs)
2007
ECONOMIC UPTURN IN EUROZONE SLOWING
8
-8
2004
Source: Feri, own calculations
The vacancy rate averaged 6.6 per cent in this top location in 1995, while prime
rents were slightly below EUR 25 per sqm. Adjusted for devaluation in the last 20
years, in current terms this would correspond to almost EUR 34 per sqm. Current
prime rents are however some 20 per cent lower at just below EUR 27 per sqm.
Relatively speaking, the divergence in the vacancy rate, which is currently just over
8 per cent, is of a similar magnitude. On the other hand, space per office job, calculated on the basis of the actual volume of office space let, is almost back at its 1995
level at around 33.5 sqm.
-6
2001
75
EMU-GDP
-6
Euro indicator
-8
-6
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Source: IFO Institute
Source: DZ BANK
A brief glance at the past shows that - based on positive conditions - prime rents and
vacancy rates have not reached a particularly high or low level. Accordingly, there
should certainly still be potential for improvement. However, this presupposes that
companies, as well as the public sector, continue to generate buoyant demand for
24
-10
Figures vs. previous year in %
Economic risks:
Companies becoming more cautious
Real Estate Market Germany 2014 | 2015
office space. However, there are question marks over this. Despite high tax revenue,
public sector coffers are not well filled, and generous spending is therefore not very
likely. Companies are also expected to act more cautiously. On the one hand, the
economies of many eurozone countries are still struggling with weak growth. On the
other hand, the many international flash points carry the potential for economic setbacks which should not be underestimated. These include, for example, the crises in
Ukraine, Israel/Gaza and Iraq. The ifo business climate index reflects the situation
faced by companies: although the level of the index remains fairly high at well above
100 points, it has nevertheless fallen visibly.
Below the line, the economies of the top locations are likely to remain robust. However, the pace of job creation will tend to slow. The growth in the construction of new
office space will also lead to growth in the supply. Viewed overall, prime rents in the
top locations are therefore likely to continue to show positive rates of change. However, in contrast to previous years, we anticipate more subdued growth. The scaling
down of the vacancy rate is also likely to lose momentum.
PRIME RENTS - CHANGE VERSUS PREVIOUS YEAR IN PER CENT
12
VACANCY RATE - IN PER CENT OF SUPPLY OF SPACE
12
Regional-12
Top-7
8
10
4
8
0
6
-4
4
-8
2
-12
-16
1995
However, demand for office
space is likely to remain robust in
top locations
1999
2003
2007
2011
0
1995
2015e
Source: Feri, own calculations, DZ BANK Research forecast
Regional-12
1999
2003
2007
2011
Top-7
2015e
Source: DZ BANK Research forecast
Overall, prime rents should show reasonable growth of just under 3 per cent this
year, but will fall short of the 2013 level of 3.4 per cent. For the reasons referred to
above, we expect a further slight weakening next year. We expect the average
growth in prime rents to fall to just below 2 per cent. However, the weakest increase
since 2011 is still almost twice as high as the average of the last ten years. The vacancy rate is likely to fall slightly again this year and next year. The rapid downward
pace of recent years will not however be repeated.
25
Forecast for 2014 and 2015: slightly
worse than 2013 but still good
Real Estate Market Germany 2014 | 2015
Office: Comparison of top locations
Office markets continue to grow at different rates
The office markets in all seven top locations have consistently performed well after
the recession-driven downturn of the years 2009 and 2010. From 2011 to 2013,
prime rents increased by a good 10 per cent on a cumulative basis. However, there
are major differences between the locations. While Frankfurt, Hamburg and Cologne
"managed" growth of only 6 per cent over the three-year period, benchmark rents in
Dusseldorf, Munich and Stuttgart grew more than twice as fast by 14 to 16 per cent.
In Berlin, Germany's largest location for office space, the rent growth was precisely
in line with the average level. While the gap between the most expensive and the
cheapest locations - Frankfurt and Stuttgart - remains relatively stable at around
EUR 15 per sqm, the divergence from Munich, the second most expensive office location, has narrowed visibly. For many years prime rents in Frankfurt exceeded
those in Munich by EUR 5 per sqm. At the moment this figure is only EUR 2. The
Frankfurt office market - which is dominated by banks - has therefore survived the financial market crisis largely unscathed, but has however lost at least some of its
edge over Munich.
PRIME RENTS: IN EURO PER SQM
PRIME RENTS: CHANGE VERSUS PREVIOUS YEAR IN PER CENT
50
8
Berlin
45
Cologne
40
Dusseldorf
Stuttgart
20
Top-7
2
1
2003
2007
2011
11
2015e
Source: BulwienGesa, own calculations, DZ BANK forecast
2013
1
1
0
2012
-2
1999
3
0
15
10
1995
2
222
Munich
25
6
55
4
Hamburg
30
8
6
6
Frankfurt
35
7
2
1
0 0
2014e
2 2
2
2
2
2
Hamburg
-1
Munich
Stuttgart
Top-7
Source: BulwienGesa, own calculations, DZ BANK forecast
Ultimately, the generally positive trend is attributable to a crisis-related moderate increase in office space on the back of growth in the number of office jobs. 12 per cent
more people are currently employed in offices in the top locations than ten years
ago. This growth has fuelled demand and led to an increasing shortage of available
attractive office space. This has resulted in the abovementioned increase in rents
and also the visible decline in vacancy rates. On average for the seven locations, the
vacancy rate has fallen by almost 2 percentage points between 2010 and today. In
Berlin and Dusseldorf, and in Stuttgart, the decline has been weakest at less than 1
percentage point. However, the trend in Stuttgart is relative to the fact that it has by
far the lowest vacancy rate of the top locations at just over 5 per cent. The steepest
decline in the vacancy rate - 3 percentage points in Munich - is in keeping with the
strongest rent growth. Vacancy rates in Hamburg and Frankfurt have also fallen
sharply. Although the banking centre does still show the highest vacancy rate of
more than 12 per cent, the divergence compared to Dusseldorf, the location with the
26
1
0
2015e
Berlin Cologne Dussel- Frankdorf
furt
3
3
Good demand for space leads to
sharp reduction in vacancies
Real Estate Market Germany 2014 | 2015
second largest proportion of unlet office space, has contracted from 5 to 2 percentage points.
TOP LOCATIONS: MAJOR DIFFERENCES IN GROWTH IN OFFICE
SPACE AND JOBS
VACANCY RATE NOT FALLING EVERYWHERE
18
16
16
14,7
14
14
11,3 11,0
12
12
10 8,6
10
8
8
6
8,9
7,7
12,3
2010
2011
2012
2013
2014e
2015e
7,3
7,0
6
4
10,0
9,8
9,6
8,1
6,25,9
4,7
4
2
0
Berlin Cologne Dussel- Frankdorf
furt
office space 2003-2013 in %
Hamburg
Munich
Stuttgart
2
Top-7
0
office workers 2003-2013 in %
Source: Feri, own calculations
Berlin Cologne Dussel- Frankdorf
furt
Hamburg
Munich
Stuttgart
Top-7
Source: Feri, calculations
Comparison of top European locations
While prime rents in top retail locations are slightly above-average by European
standards - see graph on page 15 - a comparison of office markets shows that only
Frankfurt, the most expensive German office location, reaches the average rent
level. This is surprising given the major economic importance of the Federal Republic of Germany and the positive demand for office space. The reason is that, unlike
many European countries, Germany does not have a dominant economic location
such as London in the UK or Paris in France; the leading German office markets are
spread over several major cities - the top locations. By European standards, prime
rents in Germany therefore fall far short of the levels in these economic centres.
There are no leading economic cities
in Germany - consequently office
rents are relatively cheap by European standards
PRIME OFFICE RENTS IN EUROPE IN EURO PER SQM - GERMAN TOP LOCATIONS ARE AT BEST AVERAGE
125
100
75
50
average
25
0
Source: CBRE, own calculations
Per: Q2/2014
27
Real Estate Market Germany 2014 | 2015
Berlin: Office properties
PRIME RENTS IN PER CENT COMPARED TO PREVIOUS YEAR
VACANCY RATE IN PER CENT
8
11
10
4
9
0
8
-4
7
-8
6
Berlin
-12
2005
2007
Top-7
2009
Regional-12
2011
2013
5
2005
2015e
Source: BulwienGesa, DZ BANK Research forecast
Berlin
2007
Top-7
2009
Regional-12
2011
2013
2015e
Source: Feri, DZ BANK Research forecast
The economic upturn in Berlin continued in the first half. It is being driven by young
companies with internet or E-commerce activities such as the online fashion company Zalando, but also by established companies. The positive trend led to a peak
result for the office market in the first half - its highest half-year adjusted take-up in
the last ten years of 295,000 sqm. The positive demand related to segments of all
sizes equally. Many factors suggest that the solid market trend is continuing in the
second half, leading to annual take-up of more than 600,000 sqm, i.e. significantly
more than the figure of around 520,000 sqm in the previous year. Prime rents have
been moving sideways since last autumn at EUR 22.50 per sqm. However, this is
also the highest level since 2003. The positive market trend in Berlin is also reflected
in its attractions for development projects and increasing construction activity. The
volume of new space forecast for 2014 and 2015 of 180,000 sqm and 290,000 sqm
respectively is thus well above the ten-year average of 140,000 sqm. Prime rents
could increase further in the second half. Thereafter they are likely to initially stabilise given the level reached and the growth in supply.
Office market achieves peak result
in first half 2014
Prime rents could increase further in
2014, growth in supply could act as
a brake in 2015
OFFICE PROPERTIES IN BERLIN
2012
2013
2014e
2015e
Demand
GDP
in % y-o-y
2.0
1.9
1.6
1.5
Per capita GDP
in EUR '000
23.9
24.1
24.4
24.7
Per capita GDP
in % y-o-y
0.8
1.1
1.0
1.3
Office employees
in % y-o-y
2.7
1.4
1.5
1.5
Office space
in m m²
17.5
17.5
17.6
17.8
Office space
in % y-o-y
-0.1
0.3
0.6
1.2
Vacancy rate
in %
7.5
8.0
7.8
7.7
Prime/secondary locations
in EUR/m²
22.0
/
6.8
22.5
/
7.5
23.0
/
7.5
23.3
/
7.5
Prime/secondary locations
in % y-o-y
2.3
/
4.6
2.3
/
10.3
2.2
/
0.0
1.3
/
0.0
Supply
Office rents
Source: Feri, BulwienGesa, DZ BANK Research forecast
28
Real Estate Market Germany 2014 | 2015
Cologne: Office properties
PRIME RENTS IN PER CENT COMPARED TO PREVIOUS YEAR
VACANCY RATE IN PER CENT
8
11
6
10
4
9
2
8
0
-2
7
-4
-6
-8
2005
6
Cologne
2007
Top-7
2009
Regional-12
2011
2013
5
2005
2015e
Source: BulwienGesa, DZ BANK Research forecast
Cologne
2007
Top-7
2009
Regional-12
2011
2013
2015e
Source: Feri, DZ BANK Research forecast
Based on the size of its population, the Cologne office market of 7 million sqm is on
the small side. Even the much smaller Dusseldorf has more office space. In terms of
rental income in the first half, Cologne has slipped down into seventh position
among the top locations with 112,000 sqm. As evident elsewhere, major transactions have been a rarity. In Cologne this is partly attributable to the lack of large interconnecting space. About a third of transactions were of a public sector nature.
The declining trend in vacant properties evident since 2010 is continuing, but is
gradually slowing. Prime rents, which climbed to EUR 21 at the end of last year,
have since stabilised at this level. Completed space will probably only reach a third
of the ten-year average this year. Construction activity could be stronger next year,
but has remained far behind average historical levels. The second half should also
therefore be better than the first half. Negotiations are also still ongoing concerning
some large-scale office space. Prime rents could increase further over the course of
the year, thus exceeding their pre-crisis levels. If the economic environment does
not deteriorate, prime rents could also increase next year, as indicated by the modest growth in supply.
City of one million has a relatively
small office market
Lowest space take-up of the
7 top locations
Prime rents could increase slightly
in 2014 and 2015
OFFICE PROPERTIES IN COLOGNE
2012
2013
2014e
2015e
Demand
GDP
in % y-o-y
1.9
1.9
1.9
1.9
Per capita GDP
in EUR '000
40.2
40.6
41.2
41.8
Per capita GDP
in % y-o-y
0.8
1.1
1.4
1.6
Office employees
in % y-o-y
1.3
1.1
1.7
1.6
Office space
in m m²
7.1
7.2
7.3
7.3
Office space
in % y-o-y
0.7
0.9
0.8
0.9
Vacancy rate
in %
8.1
7.5
7.2
7.0
Prime/secondary locations
in EUR/m²
20.5
/
8.0
21.1
/
8.0
21.4
/
8.0
21.7
/
8.0
Prime/secondary locations
in % y-o-y
2.5
/
0.0
2.9
/
0.0
1.2
/
0.0
1.4
/
0.0
Supply
Office rents
Source: Feri, BulwienGesa, DZ BANK Research forecast
29
Real Estate Market Germany 2014 | 2015
Dusseldorf: Office properties
PRIME RENTS IN PER CENT COMPARED TO PREVIOUS YEAR
VACANCY RATE IN PER CENT
12
8
11
4
10
0
9
8
-4
7
-8
Dusseldorf
-12
2005
2007
Top-7
2009
6
Regional-12
2011
2013
5
2005
2015e
Source: BulwienGesa, DZ BANK Research forecast
Dusseldorf
2007
Top-7
2009
2011
Regional-12
2013
2015e
Source: Feri, DZ BANK Research forecast
Based on space take-up, the Dusseldorf office market showed slightly weaker
growth in the first half. Half-year sales of around 120,000 sqm were 18 per cent below the fairly positive level of the previous year and 12 per cent lower than the tenyear average. The reason is a relatively low volume of major transactions. In contrast, demand in the medium-sized segment is fairly good. In order to achieve the
positive level of the previous year of a total of 340,000 sqm, some major transactions would have to be booked, and there is no sign of this happening as yet. The
declining trend in the vacancy rate, which had fallen to slightly below 11 per cent in
2013, is unlikely to continue for the time being. Since the volume of new office space
is likely to be fairly moderate in 2014 and 2015 at a probable total of 150,000 sqm,
the amount of space which becomes available in the near future due to relocations is
likely to be fairly marginal. Prime rents, which have risen by 16 per cent to EUR 25
per sqm since 2010, are likely to remain stable under current market conditions.
They have also therefore almost regained their level at the new millennium. However, growth could be slightly lower next year partly due to the manageable volume
of additional space on offer.
First-half 2014 was fairly muted
Prime rents likely to consolidate
at a high level in 2014
OFFICE PROPERTIES IN DUSSELDORF
2012
2013
2014e
2015e
Demand
GDP
in % y-o-y
2.4
2.5
2.1
2.0
Per capita GDP
in EUR '000
67.0
68.3
69.6
70.9
Per capita GDP
in % y-o-y
1.8
2.0
1.9
1.9
Office employees
in % y-o-y
1.7
1.4
1.5
1.4
Office space
in m m²
7.5
7.5
7.6
7.7
Office space
in % y-o-y
1.4
0.4
1.3
1.5
Vacancy rate
in %
11.3
10.8
10.9
11.0
Prime/secondary locations
in EUR/m²
23.5
/
9.2
25.0
/
9.3
25.0
/
9.3
25.3
/
9.3
Prime/secondary locations
in % y-o-y
6.8
/
-1.1
6.4
/
1.1
0.0
/
0.0
1.0
/
0.0
Supply
Office rents
Source: Feri, BulwienGesa, DZ BANK Research forecast
30
Real Estate Market Germany 2014 | 2015
Frankfurt: Office properties
PRIME RENTS IN PER CENT COMPARED TO PREVIOUS YEAR
VACANCY RATE IN PER CENT
12
16
8
14
4
12
0
10
-4
8
-8
-12
2005
6
Frankfurt
2007
Top-7
2009
Regional-12
2011
2013
4
2005
2015e
Source: BulwienGesa, DZ BANK Research forecast
Frankfurt
2007
Top-7
2009
2011
Regional-12
2013
2015e
Source: Feri, DZ BANK Research forecast
In terms of the relative trend in space take-up, the Frankfurt office market has shown
the weakest performance of the top 7. Compared to the previous half-year, rented
space declined by 23 per cent to 155,000 sqm. Compared to the ten-year average,
the figure has fallen by a fifth. The reason for this is the broad absence of major
transactions which are otherwise very important for the market. In the segment
above 5,000 sqm, only Deutsche Bank was active, completing contracts for around
30,000 sqm in two properties. Given the solid economic environment and growing
number of office employees - including 1,000 new bank regulators - there is a high
probability that market growth will gain momentum in the second half. The current
prime rental figure of around EUR 35 per sqm could then increase again slightly.
The volume of space completed this year will be high due to the new ECB building.
Conversely, the volume completed will be lower than average. Given continuing
buoyant demand, prime rents could reach EUR 36 per sqm in 2015, thus exceeding
their pre-crisis level. The vacancy rate is likely to fall again slightly, but without
matching the sharp reduction in vacancies in the last two years.
Lack of major transactions
"hampers" first half in Frankfurt
office market
Office space needed for 1,000 bank
regulators
Prime rents likely to top pre-crisis
level in 2015
OFFICE PROPERTIES IN FRANKFURT
2012
2013
2014e
2015e
Demand
GDP
in % y-o-y
2.6
2.4
2.1
2.1
Per capita GDP
in EUR '000
71.4
72.6
73.8
75.1
Per capita GDP
in % y-o-y
0.7
1.6
1.7
1.8
Office employees
in % y-o-y
1.2
1.1
1.3
1.3
Office space
in m m²
12.0
12.1
12.4
12.6
Office space
in % y-o-y
0.3
1.0
2.0
1.4
Vacancy rate
in %
13.7
12.5
12.3
12.3
Prime/secondary locations
in EUR/m²
33.0
/
9.5
35.0
/
9.4
35.0
/
9.5
35.5
/
9.5
Prime/secondary locations
in % y-o-y
0.0
/
0.0
6.1
/
-1.1
0.0
/
1.1
1.4
/
0.0
Supply
Office rents
Source: Feri, BulwienGesa, DZ BANK Research forecast
31
Real Estate Market Germany 2014 | 2015
Hamburg: Office properties
PRIME RENTS IN PER CENT COMPARED TO PREVIOUS YEAR
VACANCY RATE IN PER CENT
8
11
10
4
9
8
0
7
-4
Hamburg
6
Top-7
-8
2005
Regional-12
2007
2009
2011
2013
5
2005
2015e
Source: BulwienGesa, DZ BANK Research forecast
Hamburg
2007
Top-7
2009
2011
Regional-12
2013
2015e
Source: Feri, DZ BANK Research forecast
In 2013, rental income in Hamburg was almost exactly in line with the longstanding
average level in the first half, and this year the result was about 3 per cent higher at
225,000 sqm. However, the size of properties in demand has shifted. A number of
transactions from 10,000 sqm - Telekom 32,000, Marquard & Bahls 15,000 and
Jungheinrich 10,000 - were offset in the first half by a decline in medium-sized office
space. The vacancy rate fell towards 7 per cent, which is 2 percentage points down
on 2010. However, the rate at which vacancies are being reduced has slowed. So
far, the declining volume of empty office space has not however been reflected in
growth in prime rents, which have been EUR 24 per sqm since mid-2012. The prospects for the Hamburg office market are good in the second half, and also for 2015.
On the one hand, the domestic economy is likely to grow more strongly in 2014 and
2015 than in the two previous years, and on the other hand, this important logistics
location with the third largest European sea port is benefiting as the global economy
gains momentum. Space completed this year is slightly lower than the long-term average, and only two thirds of this level is expected to be achieved in 2015. There is a
good chance of prime rents now increasing again given the positive conditions for
Hamburg.
First half slightly above average
Further upward potential for prime
rents which have been stable since
2012: they could increase in 2014
and 2015
OFFICE PROPERTIES IN HAMBURG
2012
2013
2014e
2015e
Demand
GDP
in % y-o-y
1.5
2.3
2.4
2.2
Per capita GDP
in EUR '000
45.2
45.9
46.8
47.7
Per capita GDP
in % y-o-y
0.7
1.7
1.9
1.9
Office employees
in % y-o-y
1.8
1.9
1.6
1.5
Office space
in m m²
13.6
13.7
13.8
14.0
Office space
in % y-o-y
1.2
0.8
0.7
1.0
Vacancy rate
in %
7.8
7.6
7.4
7.3
Prime/secondary locations
in EUR/m²
24.0
/
9.0
24.0
/
9.5
24.3
/
9.5
24.7
/
9.5
Prime/secondary locations
in % y-o-y
2.1
/
9.8
0.0
/
5.6
1.3
/
0.0
1.6
/
0.0
Supply
Office rents
Source: Feri, BulwienGesa, DZ BANK Research forecast
32
Real Estate Market Germany 2014 | 2015
Munich: Office properties
PRIME RENTS IN PER CENT COMPARED TO PREVIOUS YEAR
VACANCY RATE IN PER CENT
8
11
10
4
9
0
8
-4
7
-8
6
Munich
-12
2005
2007
Top-7
2009
Regional-12
2011
2013
5
2005
2015e
Source: BulwienGesa, DZ BANK Research forecast
Munich
2007
Top-7
2009
Regional-12
2011
2013
2015e
Source: Feri, DZ BANK Research forecast
Space take-up of 240,000 sqm in the Munich office market in the first half was
broadly in line with the ten-year average. In contrast to previous years, there were
few major transactions; the two largest were 19,000 sqm respectively for Brainlab
and BayWa. The supply shortage is the main factor which is hampering market
growth. Further transactions, also of a large-scale nature, would be possible if sufficient space were available. The high demand has led to a marked reduction in vacancy rates in recent years. Among the top locations, only Stuttgart shows a slightly
lower vacancy rate. As a result of the high demand for space in the dynamic location
of Munich, the volume of new office space completions is increasing. However, the
probable volume of around 130,000 sqm this year and next year respectively falls
short of the average figure of 160,000 sqm reported in the last ten years. Against
this background, prime rents are likely to increase to well above EUR 33 per sqm,
i.e. a good EUR 2 more than at the end of 2013. The positive trend in rents should
also continue next year. The Munich rental market has aready exceeded its precrisis levels. And Frankfurt's edge as the most expensive office market has been
eroded.
Supply shortage brakes market
growth
Munich - with its high rate of rent
growth - hot on the heels of
Frankfurt as the most expensive
office location
OFFICE PROPERTIES IN MUNICH
2012
2013
2014e
2015e
Demand
GDP
in % y-o-y
1.3
1.9
2.1
1.9
Per capita GDP
in EUR '000
51.9
52.4
53.2
54.0
Per capita GDP
in % y-o-y
-0.5
1.0
1.4
1.5
Office employees
in % y-o-y
1.0
0.9
1.2
1.2
Office space
in m m²
13.0
13.1
13.3
13.5
Office space
in % y-o-y
0.6
0.9
1.5
1.2
Vacancy rate
in %
7.9
6.8
6.4
6.2
Prime/secondary locations
in EUR/m²
30.0
/
11.3
31.5
/
12.0
33.0
/
12.0
33.5
/
12.0
Prime/secondary locations
in % y-o-y
1.7
/
2.7
5.0
/
6.2
4.8
/
0.0
1.5
/
0.0
Supply
Office rents
Source: Feri, BulwienGesa, DZ BANK Research forecast
33
Real Estate Market Germany 2014 | 2015
Stuttgart: Office properties
PRIME RENTS IN PER CENT COMPARED TO PREVIOUS YEAR
VACANCY RATE IN PER CENT
10
11
8
10
6
9
4
2
8
0
7
-2
6
-4
-6
-8
2005
5
Stuttgart
2007
Top-7
2009
Regional-12
2011
2013
4
2005
2015e
Source: BulwienGesa, DZ BANK Research forecast
Stuttgart
2007
Top-7
2009
2011
Regional-12
2013
2015e
Source: Feri, DZ BANK Research forecast
The smallest office market among the top 7 continues to show dynamic growth. In
the first half, office space rentals in Stuttgart scored their third best result so far - after the peak years of 2011 and 2012 - at 116,000 sqm. Space take-up was thus one
third above the ten-year first-half average of 85,000 sqm. Some large transactions in
excess of 10,000 sqm - for example for Daimler Financial Services and the Land of
Baden-Württemberg - also contributed to the positive result. The already low vacancy rate continues to decline, and is likely to fall below 5 per cent this year on the
back of likely continuing positive market growth. The comparatively low level of
prime rents should thus also increase, having fallen slightly in 2013 after the strong
growth of previous years. There are no signs of strong growth in supply. In 2014 and
2015 jointly, the probable volume of completed office space could be slightly below
the ten-year average at 110,000 sqm. Prime rents could therefore increase again
next year, approaching a level of EUR 20 per sqm.
Positive market trend in
first-half 2014
Prime rents likely to be in the region
of EUR 20 per sqm in 2015
OFFICE PROPERTIES IN STUTTGART
2012
2013
2014e
2015e
Demand
GDP
in % y-o-y
2.0
2.0
1.9
1.8
Per capita GDP
in EUR '000
52.2
52.9
53.6
54.5
Per capita GDP
in % y-o-y
0.8
1.3
1.4
1.6
Office employees
in % y-o-y
1.4
1.0
1.6
1.4
Office space
in m m²
7.1
7.1
7.2
7.2
Office space
in % y-o-y
0.4
0.6
0.7
0.7
Vacancy rate
in %
5.5
5.2
4.9
4.7
Prime/secondary locations
in EUR/m²
18.9
/
8.8
18.7
/
8.7
19.2
/
8.7
19.5
/
8.7
Prime/secondary locations
in % y-o-y
8.0
/
1.1
-1.1
/
-1.1
2.7
/
0.0
1.6
/
0.0
Supply
Office rents
Source: Feri, BulwienGesa, DZ BANK Research forecast
34
Real Estate Market Germany 2014 | 2015
RESIDENTIAL PROPERTIES
"Beggars can't be choosers" - in any case conditions in the housing markets of the
major cities are resulting in developments which virtually no-one would have anticipated some years ago. Although housebuilding has picked up sharply, the volume of
units being completed is not sufficient to meet the high demand for housing in rapidly
growing large cities. Prefabricated housing, which was not previously regarded as an
acceptable option, is thus in demand again. Some years ago, high-rise buildings in
large housing estates were struggling with persistent vacancy rates. However, investment was often made here, improving the quality of the housing and the dreary
character of high-rise buildings. Another example is the creation of low-cost housing.
Because this is now virtually impossible to achieve in Frankfurt, the city administration is building social housing in Offenbach - a location which is much maligned by
Frankfurters. However, the Frankfurt housing company ABG is also active in other
districts in the surrounding area, for example Friedberg and Mörfelden-Walldorf.
TOP LOCATIONS: HOUSEBUILDING HAS GROWN STRONGLY. …
7
… BUT STILL LAGS FAR BEHIND DEMAND
completed dwellings per thousand inhabitants
80
70
6
60
5
50
40
4
30
3
20
10
2
0
1
0
Conditions remain strained in the
housing markets in major cities
-10
Berlin Cologne Dussel- Frankdorf
furt
2006/2007
2008/2009
Hamburg
2010/2011
Munich
2012/2013
Stuttgart
-20
Top-7
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014e
annual change of the number of households in thousand (3Y-average)
dwelling permits in thousand
2014/2015e
Source: Feri, own calculations, DZ BANK Research forecast
Source: Feri, own calculations
cumulative data for top locations
Why is more construction simply not taking place? Ultimately, investors are seeking
solid alternatives to low capital market yields such as those provided by housebuilding in major cities. There is a shortage of suitable building land. Large areas are required to resolve the five-digit housing shortage - and virtually none is available. And
in areas where space is becoming available or where "housing density is to be increased", there are often vigorous protests by residents anxious to preserve both the
value of their homes and also green space in the city. A more recent example is the
development of the site of the former Tempelhof airport, which was rejected by Berliners in a referendum. The shortage of building land means that the number of
building permits - which had continued to rise sharply in prime locations since 2011 is likely to fall again this year. Housebuilding will not therefore increase either and
the housing shortage will thus remain virtually unchanged.
Virtually no building land available
Current conditions in the housing market are also likely to be due to the miscalculation of trends in the past when the issue of housebuilding was not given a very high
priority. After the construction boom of the 1990s, conditions in the housing markets
of major cities were fairly comfortable. The number of private households stagnated
Problem underestimated in the past
35
Real Estate Market Germany 2014 | 2015
or fell, and the supply/demand ratio thus permitted virtually no rent increases up to
2005. After the new millennium, the number of private households increased and
demand for housing thus also grew: as a result of demographic change - leading to
the dominance of single households - demand for housing is increasing faster than
the size of the population. This led to a gradual shortage of housing, which had initially still been in good supply, causing rents to increase sharply since the middle of
the last decade. Today the issue of "affordable housing" is of major importance.
However, as a delayed reaction to the trend in the housing market, a housing shortage has now been created - in contrast to the housing surplus of the 1990s - and
this is likely to increase further given the number of newly constructed units and
demographic growth.
HOUSING RENTS CONTINUE TO RISE. …
18
… BUT PACE IS SLACKENING
rent in EUR/sqm
7
6
16
5
14
4
12
3
10
2
1
8
0
6
4
2
1993
rent YOY in %
first time use maximum
first time use average
1997
2001
-1
existing flats maximum
existing flats average
2005
2009
-2
-3
2013
Source: BulwienGesa
first time use maximum
first time use average
market trend
existing flats maximum
existing flats average
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: BulwienGesa, own calculations
However, the growth in rents has slowed. This trend is likely to continue in 2014 and
2015, even though rent growth is currently still significantly higher than the low inflation rate of around 1 per cent. The fact that high demand is not leading to higher rent
growth on the back of a supply shortage, is likely to be mainly attributable to the high
level of rents and budget restrictions on households, which are limiting the scope for
rent payments. Also, as a result of low interest rates, buying a property is often the
more favourable option in terms of the ongoing cost, and a proportion of rental demand is therefore shifting toward property purchases. This is leading to local overvaluations in the conurbations, which are increasingly being held up as proof of a
German property bubble.
Growth in rents slowing
Tenants are also not only being negatively affected by the sharp rise in "cold" rents.
The additional costs of housing - the "second rent" - have also risen considerably in
recent years: for increases in the cost of heating, electricity, water, waste disposal
and local rates are accumulating. This is compounded by an increasing number of
new regulations, which although they certainly make sense, also generate costs
which are passed on to tenants and which make housing even more expensive. Examples are the monitoring of water pipes for legionella, energy consumption certificates, and smoke detectors.
Tenants adversely affected by
rising rents, but also by spiralling
additional costs
36
Real Estate Market Germany 2014 | 2015
TOP LOCATIONS: ARE TENANTS MOVING TO CHEAPER …
…NEIGHBOURING CITIES?
existing flats: rent in EUR/sqm
13
13
existing flats: rent in EUR/sqm
12
Frankfurt
12
Munich
11
Offenbach
11
Augsburg
10
10
9
9
8
8
7
7
6
6
5
5
4
4
3
1993
1997
2001
2005
2009
3
1993
2013
Source: BulwienGesa
1997
2001
CHANGE IN AVERAGE FIRST OCCUPANCY RENTS SINCE 2003
IN PER CENT
46
45
22
2
Stuttgart
7
27
27
17
4
Cologne Munich
from 2003 to 2008
4
7
Frankfurt
Top-7
8
from 2008 to 2013
Berlin
33
2
Hamburg
Berlin
Cologne Dusseldorf
2011
from 2003 to 2013
Source: BulwienGesa, own calculations
2012
4 4
3
22
2
1
0
5
Dusseldorf
7
55
222
2
8
7
5
16
0
9
8
38
33
28
14
Some demand is shifting to
surrounding areas
11
10
10
48
8
28
14
2013
AVERAGE FIRST OCCUPANCY RENTS Y-O-Y
IN PER CENT
36
11
2009
Source: BulwienGesa
However, what will happen next in the housing markets in the top locations? As already described, we expect a further, but more moderate increase in rents. This applies in any case to first occupancy rents and rents for attractive existing housing,
especially in particularly sought-after districts of cities. Housing demand will in principle remain high, however after the strong growth in rents which has already taken
place and the currently high rent levels, potential tenants will focus more strongly on
cheaper districts of cities or the surrounding area. The diagrams above show that,
based on the examples of Frankfurt/Offenbach and Munich/Augsburg, housing demand from cities and local authority areas surrounding major cities is increasing. It
will become evident in the longer term whether it will be possible to create more
housing in large cities. However, the extent to which it will also be possible to realise
alternative options, in addition to the difficult process of designating building land,
will also depend ultimately on levels of acceptance and costs. Some concepts already exist, for example increasing the density in some areas of towns and cities,
high-rise homes, micro apartments or converting unused office space.
22
2005
Frankfurt
Hamburg
2013
5
2 2
4
3
2
3
22
2
0
Munich
2014e
Stuttgart
Top-7
2015e
Source: BulwienGesa, own calculations, DZ BANK Research forecast
37
6
Real Estate Market Germany 2014 | 2015
The table below contains our evaluations for the housing markets in the seven top
locations. While average first occupancy rents are likely to increase by around 3 and
2 per cent respectively in 2014 and 2015, we anticipate slightly weaker growth in the
prime segment.
Outlook for 2014 and 2015
FORECAST "HOUSING" UP TO 2015
Dem and
Population in thoausand
5-year change in %
Private households in thousand
5-year change in %
Unem ploym ent rate in %
5-year change in percentage points
Disposable incom e per capita (Euro)
5-year change in %
Supply
Dw elling units in thousand
5-year change in %
Com pletions p.a. (5-year average)
per 1000 inhabitants
Rent
First occupancy, average rent
in Euro/sqm
YOY change in %
5-year change in %
First occupancy, m axim um rent
in Euro/sqm
YOY change in %
5-year change in %
Year
Berlin
Cologne
Dusseldorf
Frankfurt
Ham burg
Munich
Stuttgart
Top-7
2013
2008-2013
2013
2008-2013
2013
2008-2013
2013
2008-2013
0
2013
2008-2013
2008-2013
2013/14e
0
2013
2014e
2015e
2013
2014e
2015e
2008-2013
2013
2014e
2015e
2013
2014e
2015e
2008-2013
3,547
3.6
2,067
4.9
11.7
-2.1
1,204
3.5
0
1,912
1.1
1.5
2.9
0
10.8
11.2
11.4
8.0
3.7
1.8
1,030
3.3
564
4.5
9.4
-1.4
1,570
2.6
0
533
2.2
2.9
2.9
0
11.2
11.4
11.6
1.8
1.8
1.8
596
2.4
333
3.8
8.8
-0.8
1,770
3.2
0
330
1.2
1.5
2.4
0
12.0
12.3
12.5
2.6
2.5
1.6
703
6.0
421
9.1
7.5
-1.0
1,501
1.9
0
370
3.5
3.9
6.2
0
12.8
13.0
13.3
5.4
2.0
2.3
1,815
2.6
1,014
4.5
7.3
-0.8
1,896
3.7
0
905
2.1
2.4
4.7
0
13.0
13.3
13.5
0.8
2.3
1.5
1,401
6.5
852
9.9
5.2
-0.2
1,827
1.9
0
766
3.1
4.0
4.8
0
14.0
14.7
15.0
3.7
5.0
2.0
620
3.7
331
5.0
6.2
0.9
1,748.7
1.7
0
302
2.1
2.6
3.0
0
10.8
11.0
11.2
2.9
1.9
1.8
9,712
3.9
5,583
5.8
9.0
-1.2
1,553
2.9
0
5,119
1.9
2.4
3.7
0
11.9
12.3
12.5
4.3
3.1
1.8
10.8
11.2
11.4
8.0
3.7
1.8
15.4
11.2
11.4
11.6
1.8
1.8
1.8
14.5
12.0
12.3
12.5
2.6
2.5
1.6
15.5
12.8
13.0
13.3
5.4
2.0
2.3
18.5
13.0
13.3
13.5
0.8
2.3
1.5
18.8
14.0
14.7
15.0
3.7
5.0
2.0
21.0
10.8
11.0
11.2
2.9
1.9
1.8
14.6
11.9
12.3
12.5
4.3
3.1
1.8
16.9
RESIDENTIAL: FIRST OCCUPANCY RENTS, AVERAGE …
16
average rent first time use in EUR/sqm
… AND MAXIMUM – COMPARISON OF TOP LOCATIONS
22
Berlin
15
Cologne
14
Dusseldorf
13
11
10
Hamburg
16
Munich
14
Frankfurt
Hamburg
Munich
Stuttgart
Top-7
10
7
6
1995
Dusseldorf
12
Top-7
8
Cologne
18
Stuttgart
9
Berlin
20
Frankfurt
12
maximum rent first time use in EUR/sqm
1999
2003
2007
2011
8
1995
2015e
Source: BA, BulwienGesa, Feri, own calculations, DZ BANK Research forecast
38
1999
2003
2007
2011
2015e
Real Estate Market Germany 2014 | 2015
OVERVIEW OF FORECASTS
Population
in 1,000
Population
2003-2013 in %
GDP
in EUR m
P.c. GDP
in EUR
Berlin
3,547
4.6
85.6
24,139
1,204
11.7
Cologne
1,030
6.5
41.8
40,613
1,570
9.4
Dusseldorf
596
4.2
40.7
68,339
1,770
8.8
Frankfurt
703
9.4
51.0
72,577
1,501
7.5
Hamburg
1,815
4.8
83.3
45,929
1,896
7.3
Munich
1,401
14.2
73.5
52,438
1,827
5.2
620
5.4
32.8
52,913
1,749
6.2
9,712
6.5
408.8
42,098
1,553
9.0
Structural data (per 2013)
Stuttgart
Top locations
Retail properties
Retail space
Per 2013
Rents in top locations
in EUR per m²
P.c. disposable income Unemployment rate
in EUR/month
in %
Change in rent in % vs
previous year
Retail sales in % vs.
previous year
in
1000 m²
20032013
in %
per inhabitant
in m²
Berlin
6,130
30.7
1.7
270
270
275
12.5
0.0
1.9
2.4
2.6
1.6
Cologne
1,399
5.7
1.4
240
243
246
2.1
1.3
1.2
2.4
2.4
1.6
Dusseldorf
1,227
43.4
2.1
240
243
247
9.1
1.3
1.6
3.5
3.1
2.1
Frankfurt
1,492
42.6
2.1
280
283
288
5.7
1.1
1.8
1.4
1.7
2.4
Hamburg
2,954
30.4
1.6
260
265
270
6.1
1.9
1.9
2.4
2.6
2.5
Munich
2,004
29.7
1.4
315
320
325
3.3
1.6
1.6
1.8
2.0
2.6
990
27.0
1.6
235
235
235
4.4
0.0
0.0
1.8
1.7
1.7
16,195
29.5
1.7
268
270
274
7.8
0.9
1.6
2.3
2.4
2.1
Stuttgart
Top locations
Office properties
Office space
Per 2013
Rents top locations
in EUR pro m²
Per Per office
in
person worker in
1000 m²
in m²
m²
Berlin
Cologne
Dusseldorf
Frankfurt
2013 2014e 2015e
2013 2014e 2015e
2013 2014e 2015e
Change in rent
in % vs previous year
2013 2014e 2015e
2013 2014e 2015e
Vacancy rate
in %
2013 2014e 2015e
17,526
4.9
35.4
22.5
23.0
23.3
2.3
2.2
1.3
8.0
7.8
7.7
7,194
7.0
33.4
21.1
21.4
21.7
2.9
1.2
1.4
7.5
7.2
7.0
7,493
12.6
39.2
25.0
25.0
25.3
6.4
0.0
1.0
10.8
10.9
11.0
12,135
17.3
44.7
35.0
35.0
35.5
6.1
0.0
1.4
12.5
12.3
12.3
7.3
Hamburg
13,746
7.6
34.9
24.0
24.3
24.7
0.0
1.3
1.6
7.6
7.4
Munich
13,105
9.4
36.0
31.5
33.0
33.5
5.0
4.8
1.5
6.8
6.4
6.2
Stuttgart
7,101
11.4
40.0
18.7
19.2
19.5
-1.1
2.7
1.6
5.2
4.9
4.7
78,302
1.4
37.1
26.0
26.5
26.9
3.4
2.0
1.5
8.4
8.2
8.1
Top locations
Residential properties
First occupancy average rents in EUR pro
m²
Trend from
2003 to 2013 in %
First occupancy average rents in % vs previous year
First occupancy rents
top locations in EUR
per m²
Single
Households
Housing
stock
Berlin
4.6
9.7
1.9
10.8
11.2
11.4
8.0
3.7
1.8
15.4
15.7
16.0
Cologne
6.5
9.3
4.6
11.2
11.4
11.6
1.8
1.8
1.8
14.5
14.8
15.0
Dusseldorf
4.2
7.0
2.7
12.0
12.3
12.5
2.6
2.5
1.6
15.5
15.8
16.0
Frankfurt
9.4
14.7
6.7
12.8
13.0
13.3
5.4
2.0
2.3
18.5
18.5
18.8
Hamburg
4.8
9.4
4.0
13.0
13.3
13.5
0.8
2.3
1.5
18.8
19.0
19.2
Munich
14.2
21.6
8.0
14.0
14.7
15.0
3.7
5.0
2.0
21.0
21.0
21.3
Stuttgart
5.4
7.9
3.7
10.8
11.0
11.2
2.9
1.9
1.8
14.6
14.9
15.2
Top locations
6.5
11.3
4.0
11.9
12.3
12.5
4.3
3.1
1.8
16.9
17.1
17.4
2013 2014e 2015e
source: Feri, BulwienGesa, DZ BANK Research forecast
39
2013 2014e 2015e
2013 2014e 2015e
Real Estate Market Germany 2014 | 2015
Imprint
Published by: DG HYP – Deutsche Genossenschafts-Hypothekenbank AG,
Rosenstrasse 2, 20095 Hamburg
Management Board:
Dr. Georg Reutter (Chairman of the Management Board), Manfred Salber
Authors:
Responsible: Stefan Bielmeier, Head of Research and Volkswirtschaft
Author:
Dr. Michael Holstein, Head of Volkswirtschaft
Thorsten Lange, Analyst Real Estate Markets
All DZ BANK AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main 2014
Reprinting and reproduction requires the approval of DG HYP
Disclaimer
This document has been published by DG HYP – Deutsche Genossenschafts-Hypothekenbank AG, Hamburg.
This document has been prepared by DZ BANK AG Deutsche Zentral-Genossenschaftsbank („DZ BANK“) and is intended for distribution within the Federal Republic of Germany. This document is
not intended for persons having their domicile and/or registered offi ce and/or branches outside Germany, particularly
in the United States of America, Canada, the United Kingdom or Japan. This brochure may only be distributed outside Germany in compliance with the laws and regulationsapplicable in the relevant
country. Anyone gaining possession of this information or material must inform themselves of theapplicable laws and regulations and observe said laws and regulations.
Nothing contained herein constitutes a public offer to buy securities or fi nancial instruments.
This document constitutes an independent assessment of the relevant issuer and/or securities by DZ BANK. All assessments, expressions of opinion and statements contained herein are those of the
writer and are not necessarily shared by the issuer or third parties. DZ BANK has obtained the information on which this document is based from sources that are considered reliable, but has not,
however, verifi ed all of these documents. Accordingly, no representation or warranty as to the accuracy or completeness of the information or expressions of opinion contained herein is made by
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Investors are urged not to base their investment decision regarding securities or other fi nancial instruments on this document, but rather on personal discussions with an adviser and the relevant
sales prospectus or information memorandum.
Depending on the specifi c investment objectives, investment horizon, and fi nancial situation, any such recommendations may not suitable, in whole or in part, for individual investors. As trading
recommendations are largely based on short-term market conditions, they may also confl ict with other recommendations made by DZ BANK.
The recommendations and expressions of opinion contained herein are as at the date of this document. They may becomeobsolete as a result of future developments, without this document being
amended accordingly.
Competent supervisory authority
Bundesanstalt für Finanzdienstleistungsaufsicht
(German Federal Financial Supervisory Authority),
Lurgiallee 12, 60439 Frankfurt am Main, Germany
40
Real Estate Market Germany 2014 | 2015
DG HYP Offices
Deutsche Genossenschafts-Hypothekenbank AG
20095 Hamburg, Germany
Rosenstrasse 2
PO Box 10 14 46
20009 Hamburg
Phone +49 40 33 34-0
Fax +49 40 33 34-11 11
Internet: www.dghyp.de
Real Estate Centres
DG HYP
Real Estate Centre Berlin
Pariser Platz 3
10117 Berlin, Germany
Phone +49 30 31993-5101
Fax +49 30 31993-5036
DG HYP
Real Estate Centre Frankfurt
City-Haus 1, Platz der Republik 6
60325 Frankfurt/Main, Germany
Phone +49 69 750676-21
Fax +49 69 750676-99
DG HYP
Real Estate Centre Munich
Türkenstrasse 16
80333 Munich, Germany
Phone +49 89 512676-10
Fax +49 89 512676-30
DG HYP
Real Estate Centre Dusseldorf
Steinstrasse 13
40212 Dusseldorf, Germany
Phone +49 211 220499-10
Fax +49 211 220499-40
DG HYP
Real Estate Centre Hamburg
Rosenstrasse 2
20095 Hamburg, Germany
Phone +49 40 3334-3778
Fax +49 40 3334-1102
DG HYP
Real Estate Centre Stuttgart
Heilbronner Strasse 41
70191 Stuttgart, Germany
Phone +49 711 120938-0
Fax +49 711 120938-30
DG HYP
Regional Office Kassel
Rudolf-Schwander-Strasse 1
34117 Kassel, Germany
Phone +49 561 602935-23
Fax +49 561 602935-24
DG HYP
Regional Office Leipzig
Schillerstraße 3
04109 Leipzig, Germany
Phone +49 341 962822-92
Fax +49 341 962822-93
Regional Offices
DG HYP
Regional Office Hanover
Berliner Allee 5
30175 Hanover, Germany
Phone +49 511 86643808
Fax +49 40 3334-782-3775
Institutional Clients
Hamburg
Rosenstrasse 2
20095 Hamburg, Germany
Phone +49 40 33 34-21 59
Fax +49 40 33 34-12 60
41
As at = October 2014
DG HYP
Deutsche Genossenschafts-Hypothekenbank AG
Rosenstrasse 2 | 20095 Hamburg | Germany
Phone: +49 40 33 34-0 | Fax: +49 40 33 34-11 11
www.dghyp.de