ingo hartlief corpus_sireo_2013-09-06 germany21 special edition

SPECIAL REPORT – GERMANY 21: GERMAN REGIONAL OFFICE MARKETS

Attractive office locations beyond Top 7 cities

Ingo Hartlief, COO der CORPUS SIREO Holding GmbH & Co. KG, Mitglied des Executive Committee

und Vorsitzender der Geschäftsführung des CSAMC

Frankfurt – September 2013

Asset Mangement Commercial

CONTENT

1. Ingo Hartlief 03

2. Regional office markets 04

3. Bonn 06

4. Dortmund 07

5. Hanover 08

6. Leipzig 09

7. Nuremberg 10

8. Contact & Disclaimer 11

Asset Mangement Commercial

“Following the stable sideways movement of the office market index at the end of 2013, moderate growth is now anticipated for 2014. The good economic climate in Germany is

indicating that rental levels will continue to be high.”

Ingo Hartlief is COO of CORPUS SIREO Holding GmbH & Co. KG.

In addition, Ingo Hartlief currently holds the following offices: CEO of CORPUS SIREO Asset

Management Commercial GmbH, Organe de Contrôle of CORPUS SIREO Investment

Management S.à r.l., Managing Director of CORPUS SIREO Asset Management Retail GmbH

and Managing Director of CORPUS SIREO Residential Asset Management GmbH.

Mr. Hartlief holds a degree in business administration and was a Member of the Executive Board

at Union Investment Real Estate in Hamburg from 2002 to 2010.

From 1999 to 2002 Ingo Hartlief led the Essen based Viterra Gewerbeimmobilien GmbH.

Previously, he worked for three years as Area Director of Viterra AG.

From 1991 to 1996 Ingo Hartlief was responsible for the Services- and Real Estate Division as

well as the Corporate Real Estate Management as part of the Executive Board staff at E.ON AG.

INGO HARTLIEF

Bonn Dortmund Hanover Leipzig NurembergContact &Disclaimer

Regional office markets

Ingo Hartlief

Asset Management Commercial

BACKGROUND: GERMANY 21 – REGIONAL OFFICE INDEX

SETTINGS, LOCATIONS & METHODOLOGY

� Previous situation: low market-transparency of regional

office markets, limited market-information available

� Market expertise CORPUS SIREO: regional presence in

10 offices and nationwide network of real estate experts

� Identification of Key Regional Cities: selection of 14

cities based on varied criteria including dynamic growth

prospects, absolute market size as well as own expertise

� Index compilation:

� Methodology: indexation of compounded asking-

rent level

� Database: publicly available data out of over 100

separate sources (c. 4 million data sets)*

� Co-operation partner: empirica ag (empirica-

Preisdatenbank)

� Frequency: half-yearly with new focal city in each edition,

currently 5th edition (Dortmund, release date 10/2013)

Key Regional Cities and Office JobsRegional Office Index as basis of the current special report:

4

Change in Office jobs 2007 – 2025 (in %)

Source: Corpus Sireo, empirica*Print-Media and Online-Advertisements


Ingo Hartlief Bonn Dortmund Hanover Leipzig NurembergContact &Disclaimer


MANAGEMENT SUMMARY

REGIONAL OFFICE MARKETS – STRENGTH THROUGH STABILITY

5

� Market attraction: Increasing transaction volumes within German real estate markets confirm

ongoing interest of domestic and foreign investors alike with office properties being the main

target

� Investor focus: prime properties in the “Top 7” markets are especially sought after, resulting

in a shortage of supply and falling property yields

� Stability: In contrast, key regional cities offer lower volatility of rents and property yields,

limiting market risk, thus ensuring continued positive performance

� Solid tenant base: Local / regional origins of SME’s act as a guarantor of long-term tenant demand and less speculative office developments

� Increasing importance: Attractive investment opportunities and favorable entry prices in

regional office markets act as an alternative to “Top 7” markets, especially for risk-averse

investors

� Market liquidity: increasing transactional volumes in key regional markets reflect growing investor demand


Ingo Hartlief Bonn Dortmund Hanover Leipzig NurembergContact &Disclaimer


FORMER FEDERAL CAPITAL WITH STRONG PUBLIC SECTOR

Source: PMA, Brokers, Corpus Sireo Research 2013

6

BONN – ATTRACTIVE OFFICE SUB-MARKETS ALONG THE RHINE

Rental Level – Office Submarkets Selected Transactions

Market Assessment

► Persistent tenant demand from the public and business sector

positively effecting the office market

► Strong demand from the public sector and downstream services respectively the IT sector

► Comparatively high rents and low vacancy rates

► Submarkets in focus: former government district and “Bonner

Bogen”

Deal-Date

Price(m. €)

Adress Purchaser Size (sqm)

Yield (%)

2013 Q1 n/a Wielandstraße 4 JV Pareto 9,800 n/a

2012 Q4 12.5Kanada Haus,Fr.-Wilhelm Straße

Aberdeen Asset Mgmt. (sale)

4,700 n/a

2012 Q3 65.2Maanderbaus,Fr.-Ebert-Allee 36

GIZ n/a n/a

2012 Q1 20.9Andreas-Hermes-Straße

IFK Sachwertfonds

n/a 7.2

BONN 2010 2011 2012 2013* 2014* 2015* Trend

GDP growth (%) 2.4 1.6 0.5 -0.1 1.0 1.3 ��

Unemployment (%) 6.1 5.2 4.9 5.0 4.9 5.3 ��

Vacancy rate (%) 3.00 3.50 3.60 4.10 4.20 5.00 ��

Prime rent

(EUR/sqm/month)15.00 16.00 16.00 15.90 15.90 15.75 ��

Prime yield (%) 5.80 5.50 5.50 5.40 5.40 5.50 ��

Source: Brokers, Thomas Daily, IZ, Corpus Sireo Research 2013

Office market Bonn:

rent levels

Deviation from average rent

(=0)

below -25

-25 to -15

-15 to -10

-10 to -5

-5 to 5

5 to 10

10 to 15

15 to 25

25 to 50

above 50

Built-up area

Green space

Other area

BonnRegional

office markets

Source: empirica Preisdatenbank (IDN

Immodaten GmbH) Infas

geodaten 2007

Dortmund Hanover Leipzig NurembergContact &Disclaimer

Ingo Hartlief


FORMER CAPITAL INDUSTRY IN TRANSITION

Source: PMA, Brokers, Corpus Sireo Research 2013

7

DORTMUND – YOUNG OFFICE MARKET WITH POTENTIAL


Market Assessment

► Largest city of the Ruhr area, advanced stage within the

structural transformation process from industrial base to

services

► Strong revitalisation activities, development of new office and

technology parks within the city

► Stable office market in terms of demand and rents,

homogeneous development of central and peripheral areas

► Submarkets in Focus: Phoenix-See, Phoenix West

Deal-Date

Price(m. €)


Yield (%)

2013 Q2 n/a Heppingstraße Private Investor 3,000 n/a

2012 Q4 n/aHarpen-Zentrale, Voßkuhle 38

Harpen Immobilien

6,500 n/a

2013 Q3 n/aEhem. Hauptsitz Hoesch-Union

Peach Property Group

15,000 n/a

2012 Q3 25.0 Westenhellweg 52Aachener Grundvermögen

3,700 n/a

DORTMUND 2010 2011 2012 2013* 2014* 2015* Trend

GDP growth (%) 0.2 1.7 1.6 1.0 1.6 2.1 ��

Unemployment (%) 11.7 11.1 10.3 10.4 10.6 11.3 ��

Vacancy rate (%) 5.7 6.3 6.0 5.7 5.5 5.4 ��

Prime rent

(EUR/sqm/month)13.00 13.20 13.20 13.30 13.40 13.50 ��

Prime yield (%) 6.3 6.2 6.2 6.0 6.1 6.1 ��

Source: Brokers, Thomas Daily, IZ, Corpus Sireo Research 2013

Office market

Dortmund: rent levels


(=0)

Bonn Dortmund

below -25

-25 to -15

-15 to -10

-10 to -5

-5 to 5

5 to 10

10 to 15

15 to 25

25 to 50

above 50

Built-up area

Green space

Other area



geodaten 2007


Hanover Leipzig NurembergContact &Disclaimer

Ingo Hartlief


LARGEST REGIONAL MARKET OUTSIDE THE TOP 7

Source: empirica, Experian, Broker, Corpus Sireo Research 2013

8

8

HANOVER – STATE CAPITAL WITH FOCUS ON INSURANCE


Market Assessment

► Largest regional office market outside the “Top 7” with 5.4

million sqm of office space

► Divergence of rental levels of central and peripheral locations with clear user preference for inner-city office locations

► Strong brownfields revitalisation activities and conversion areas, particularly in central locations

► Submarkets in Focus: Downtown and Podbielskistraße

Deal-Date

Price(m. €)


Yield (%)

2013 Q2 about 10 Karmarschstraße Family Office ca. 1,000 n/a

2013 Q1 21.3Hans Boeckler Allee 11

Inovalis 11,500 7.1

2012 Q4 14Grosse Packhofstraße Aachener Grund 3,800 n/a

2012 Q1 25.8Grammophon BP, Podbielskistraße

Dundee Internat. REIT

19,500 n/a

HANOVER 2010 2011 2012 2013* 2014* 2015* Trend

GDP growth (%) 3.8 3.0 1.4 0.9 2.0 2.3 ��

Unemployment (%) 7.7 7.5 6.9 7.0 7.0 7.5 ��

Vacancy rate (%) 5.00 4.80 4.30 4.10 4.80 4.70 ��

Prime rent

(EUR/sqm/month)12.80 13.50 14.0 14.10 14.10 14.10 ��

Prime yield (%) 6.20 6.10 5.80 5.75 5.80 5.80 ��

Source: Broker, Thomas Daily, IZ, Corpus Sireo Research 2013

Dortmund Hanover

below -25

-25 to -15

-15 to -10

-10 to -5

-5 to 5

5 to 10

10 to 15

15 to 25

25 to 50

above 50

Built-up area

Green space

Other area

Office market

Hanover: rent levels


(=0)



geodaten 2007

BonnRegional

office marketsLeipzig Nuremberg

Contact &Disclaimer

Ingo Hartlief


ECONOMIC CENTRE IN EASTERN GERMANY


9

9

LEIPZIG – DYNAMIC LOCATION WITH DEVELOPMENT POTENTIAL


Market Assessment

► Large office market in eastern Germany with 3.5 million sqm

of office space and positive regional economic development

► Strong take-up of office space in relation to total stock resulting in positive rent development

► Low volume of completions, potential for further positive market development through falling vacancy rates

► Submarkets in focus: “Graphisches Viertel”

Deal-Date

Price(m. €)


Yield (%)

2013 Q2 n/aAlte HauptpostAugustusplace

KSW GmbH 27,000 n/a

2012 Q4 n/aJacobi Palais,

Dittrichring 1Leipziger urban Planning

6,100 n/a

2012 Q3 n/aTrias

Markgrafenstraße DEVK 6,300 n/a

2012 Q1 n/aForum am BrühlR.-Wagner-Straße

JV Caleus Capital u.a.

26,500 n/a

LEIPZIG 2010 2011 2012 2013* 2014* 2015* Trend

GDP growth (%) 1.2 2.9 0.6 1.0 2.1 2.4 ��

Unemployment (%) 13.1 12.1 11.9 12.1 12.2 13.1 ��

Vacancy rate (%) 20.80 18.70 17.70 17.40 16.90 16.70 ��

Prime rent

(EUR/sqm/month)11.00 11.50 12.00 12.20 12.40 12.40 ��

Prime yield (%) 6.30 6.30 6.30 6.10 6.10 6.20 ��


Office market Leipzig:

rent levels


(=0)

Hanover Leipzig

below -25

-25 to -15

-15 to -10

-10 to -5

-5 to 5

5 to 10

10 to 15

15 to 25

25 to 50

above 50

Built-up area

Green space

Other area



geodaten 2007

DortmundBonnRegional

office marketsNuremberg

Contact &Disclaimer

Ingo Hartlief


STRONG METROPOLITAN AREA IN THE NORTH OF BAVARIA


10

10

NUREMBERG – REGIONAL MARKET WITH INCREASING FOCUS ON SERVICES

NUREMBERG 2010 2011 2012 2013* 2014* 2015* Trend

GDP growth (%) 4.1 2.7 0.7 1.1 2.2 2.6 ��

Unemployment (%) 9.0 7.0 6.5 6.4 6.2 6.4 ��

Vacancy rate (%) 7.60 6.80 6.80 6.60 7.80 7.70 ��

Prime rent

(EUR/sqm/month)11.50 12.00 12.00 12.10 12.00 12.00 ��

Prime yield (%) 5.70 5.50 5.40 5.40 5.40 5.40 ��


Market Assessment

► Industrial decline offset by strengthened service orientation

(e.g. consumer and market research)

► Focus on owner-occupiers and pre-letting, few speculative development projects

► Locations outside the inner city with strong rental dynamic, inner city office locations with highest rents

► Submarkets in Focus: Downtown and Eastern Inner Ring

Deal-Date

Price(m. €)

Adress Purchaser Size (sqm) Yield (%)

2013 Q2 n/a Königstorgraben 7 Kochinvest 2,600 n/a

2013 Q1 about 17Parcside, Am Stadtpark 2

Dundee Internat. REIT

8,800 n/a

2012 Q2 48.6 Karl-Martell-Str. 60Dundee Internat. REIT

25,000 6.20

2012 Q1 20.7Tank & Rast HQ, Hermes-Straße 7

IFK Sachwertfonds

about 10,000 7.7


Office market

Nuremberg: rent levels


(=0)

Leipzig Nuremberg

below -25

-25 to -15

-15 to -10

-10 to -5

-5 to 5

5 to 10

10 to 15

15 to 25

25 to 50

above 50

Built-up area

Green space

Other area



geodaten 2007

HanoverDortmundBonnRegional

office markets

Contact &Disclaimer

Ingo Hartlief


YOUR CONTACT REGARDING RELATED QUESTIONS

CONTACT

Martin LippmannSenior Manager

Advisory

Jahnstr. 64

63150 Heusenstamm

T: +49 6104 664 371

M: +49 170 76 93 196

[email protected]

More information about CORPUS SIREO, Services and Market Surveys can be found at our website:

www.corpussireo.com

[email protected]

11

Contact & Disclaimer

Residential Report Office Index

Link to the download-area of recent office market reports(english / german):

https://www.corpussireo.com/CORPUSSIREO/Presse/Downloads.aspx

Ingo HartliefCEO

CS Asset- & Investment Management

Jahnstraße 64

63150 Heusenstamm

T: +49 6104 664 100

M: +49 178 778 8200

[email protected]

LeipzigHanoverDortmundBonnRegional

office marketsIngo Hartlief Nuremberg


DISCLAIMER

IMPORTANT NOTICE

12

COPYRIGHT: All rights to this edition reserved. Reprinting, including excerpts, subject to prior written permission. Photographs, charts, and layout designed by

the editorial desk are protected by applicable copyright laws. The data and information contained in this publication are based on publicly available sources that

the editor deems trustworthy. The CORPUS SIREO group of companies assumes no warranty regarding the accuracy or completeness of the information. Any

opinion offered represents the current assessment of the editor. No warranty is assumed in regard to the opinions and forecasts ventured. Specifically, no liability

is assumed for future developments in the real estate economy. The data and information contained in this publication is subject to change without notice both

during the time of its publication and thereafter.

Contact & Disclaimer

LeipzigHanoverDortmundBonnRegional

office marketsIngo Hartlief Nuremberg

ingo hartlief corpus_sireo_2013-09-06 germany21 special edition

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