WHERE HAMBURG S STREETS ARE PATHED WITH GOLD. AND WHERE NOT (YET).

Transcription

1 WHERE HAMBURG S STREETS ARE PATHED WITH GOLD. AND WHERE NOT (YET). Investment properties in Hamburg Market report 2017 zinshausteam-kenbo.de

2 INDEX INVESTMENT PROPERTIES The market for investment properties in Hamburg Record turnover on Hamburg s investment property market Price index for existing properties EDITORIAL Focus on city districts 6 Property construction doubled Sales in the city districts in 2016 New residential districts Political restrictions Social preservation areas Controversial rent cap Special write-offs for construction of new rental housing Interior development measure (IEM) in preparation Enforcement of the misappropriation ban Building energy legislation: EnEV + EEWÄRMEG = GEG One uniform construction code Business tax on tenant electricity 2017 trends on the investment property market The larger the portfolio, the higher the multiplier Dear Ladies and Gentlemen, 2016 saw Hamburg s real estate market experience further very dynamic growth. Turnover on the investment property market reached an all-time high while figures for the office and commercial property segment narrowly missed breaking the record set in Prices are climbing, as are rents although less sharply while yields are falling. The number of international investors investing in properties on the Elbe and stically oriented politics, Trump, Putin, Erdogan, Kaczynski or Orbán are viewed as unreliable partners for international agreements and contracts. For investors, however, legal certainty is a key benchmark for the security of their investments. Germany has benefitted from this situation; in particular Hamburg and also Berlin. In this context, international perception is influenced by rankings such as the Global Liveability Report. The Little on offer, plenty of capital Alternatives: Freehold apartments or periphery Alster is also increasing. This is a response to Hamburg s economic struc- report, published in August by British magazine The Economist, identifies COMMERCIAL INVESTMENT Commercial investment in Hamburg Capital turnover doubled since 2008 Office real estate booming Large projects in planning and under construction ture, which, in comparison to other major German centres, is highly differentiated, thus ensuring highly stable demand for real estate with low levels of volatility. the world s most liveable cities and puts Hamburg in 10th place ahead of all other German cities. Statistical evidence also confirms these evaluations, demonstrating that Hamburg is Sales in the city districts in 2016 Competition between office and hotel projects Price index for commercial investment properties Preferred locations Security and returns Structural change in the retail segment Controversial southern Überseequartier District centre on the up References Investment and commercial properties This degree of security, high even by German standards, makes Hamburg a prime choice on the international market. The significant decline in the number of locations and countries worldwide which are experiencing positive economic development while simultaneously offering politically reliable framework conditions over the past three years has been flourishing commercially and growing in terms of inhabitants. There is also no shortage of capital with institutional and private investors searching for lucrative, safe investment opportunities. Seen from this perspective there is virtually no alternative to real estate. As a result, a clear trend for large investors to pay mark-ups for large portfolios has a key factor in this. With their nationali- become apparent since the end of 2016, Image credits: Christoph Bellin/fotograf-hamburg.de Andreas Vallbracht/prachtvoll.de Arne Hoffmann/arnehoffmann.de HafenCity Hamburg GmbH/Hosoya Schaefer Architects Unibail-Rodamco/moka-studio Quantum/bloomimages Quantum/Carsten Brügmann Shutterstock/shutterstock.com istock/istock.com

3 EDITORIAL The directors and shareholders of ZINSHAUSTEAM & KENBO GmbH & Co. KG, l to r: Thomas König, Matthias Baron, Lars Linnenbrügger, Oliver Sieweck, David Kenney, Guido Bennemann, Andreas Boberski because such portfolios offer the opti- ning their attention to outlying areas. in Hamburg eagerly wait large projects Federal Minister of Justice Heiko Maas. on to invest significant capital en bloc saw investors focus not on the cen- in the office segment, the significantly Irrespective of the election outcome, the Put another way, individual properties tral Altstadt or Neustadt districts, but faster growth of retail space volumes in peak has been reached at least with re- increase in value in line with the size of instead on peripheral localities which comparison to turnover is viewed scep- gard to the investment property market. their portfolio. are further out than, for example, Ham- tically. The southern Überseequartier in Interest rates are climbing, even if this merbrook and Harburg. In the last three particular is causing anxiety among city growth is slow, and prices and multipli- Investors mounting interest and popu- years districts such as Lohbrügge, centre retailers and property owners. ers are more likely to move laterally as lation growth in Hamburg has caused Bramfeld or Wandsbek have also be- a result. Investment properties will thus an increasing shift in attention to so- come more popular. The real estate industry is relatively un- continue to be of interest to classic pri- called poor locations. Eastern are- concerned about the forthcoming fe- vate and institutional investors, howe- as of the city have benefited in parti- Office and retail properties are cur- deral parliamentary elections. Ange- ver less so for speculators. In addition to cular from this, with a dedicated urban rently experiencing differing scenari- la Merkel has distanced herself from this, no significant increase in the sup- development programme, Stromauf- os, with office space benefitting from the rent capping legislation; regional states ply of properties expected, since there wärts an Elbe und Bille (literally Mo- expansion and modernisation concepts Schleswig-Holstein and NRW are abo- continue to be no genuine alternatives ving Upstream Along the Elbe and Bil- of a predominantly flourishing econo- lishing it; and the courts are increasin- in terms of security and yield. le ), initiated in my, while retail is suffering as a result gly demanding a more differentiated ex- of structural change. The consolidati- planation for its introduction, making it With kindest regards In the case of office and commercial on of High Street retail is intensifying very unlikely that a CDU-dominated fe- properties, as also for investment pro- investor demand for office properties deral government will implement the perties, investors are increasingly tur- and, while both investors and tenants tightening of regulations demanded by ZINSHAUSTEAM & KENBO zinshausteam-kenbo.de 3

4 INVESTMENT PROPERTIES THE MARKET FOR INVESTMENT PROPERTIES IN HAMBURG NUMBER OF INVESTMENT PROPERTIES SOLD TURNOVER (in million euros) RECORD TURNOVER ON HAMBURG S INVESTMENT PROPERTY MARKET Hamburg s investment property market is expanding, as was also the case in This expansion is, however, less in terms of transaction volumes than with regard to the corresponding turnover achieved. According to the figures published by the Hamburg Committee of Valuation Experts, the number of transactions concluded last year increased by 11 to 438, and was thus somewhat below the ten-year average of 457 transactions. Turnover, in contrast, rose significantly, by 27 %, achieving an all-time record figure of 1.54 billion. The ten-year average for this figure is 943 million. Dynamic turnover growth can be attributed to higher prices for investment properties. In addition to this, more properties were sold in packages. Turnover per property increased from 2.84 million in 2015 to 3.52 million last year. This represents an increase of 24 %, also a figure which has never before been achieved. locations. The latter experienced strongest growth, with the average price per square metre climbing over 17 % to 1.861, followed by the good locations with an increase of 13 % to The average price for all locations rase by 5.6 % to /m² twice the figure for 2008 ( 1 319). Investment properties sold with the intention of privatision were, on average, significantly more expensive. The average price rose by over 10 % to /m². This is a reflection of increasing prices for freehold apartments, which have been climbing significantly more quickly than rents for some years now. Figures published by the empirica institute show that prices for new rentals in Hamburg have soared by 43 % since 2008, from 8.02 /m² to currently /m². During this period the Hamburg Committee of Valuation Experts recorded an 89 % rise in prices for freehold apartments from /m² to /m². Parallel to this, the price index for investment properties has increased by a huge 99 %. Purchasers are clearly speculating not only on possible rent rises but also and above all on ap- Purchasers interest was focused in par- preciation potential within the scope of Source: Property Market Report 2017, Gutachterausschuss ticular on good and so-called poor the property boom. 4

5 INVESTMENT PROPERTIES PRICE INDEX FOR EXISTING PROPERTIES CATEGORY DISTRICTS DISTRICTS WITH POTENTIAL MULTIPLIER PRICE per m 2 / TREND PRIME LOCATION Blankenese, Flottbek, HafenCity, Harvestehude, Hohenfelde (West), Nienstedten, Othmarschen, Rotherbaum, Uhlenhorst (West), Winterhude (Süd) times annual rent Ò GOOD LOCATION Barmbek-Süd, Eimsbüttel (Nord), Eppendorf, Hoheluft (Ost), Marienthal, Ottensen, St. Georg, Uhlenhorst, Wellingsbüttel, Winterhude times annual rent Ò TRENDY LOCATION Altona, Bahrenfeld, Barmbek-Nord, Hamm, Hammerbrook, Karolinenviertel, St. Pauli Schanzenviertel times annual rent Ò SECONDARY LOCATION Bergedorf, Fuhlsbüttel, Harburg, Heimfeld, Horn, Iserbrook, Jenfeld, Langenhorn, Poppenbüttel, Rahlstedt, Sasel Bramfeld, Eilbek, Lokstedt, Lurup, Schnelsen, Wandsbek times annual rent Ò TERTIARY LOCATION Rothenburgsort, Veddel, Wilhelmsburg Billbrook, Billstedt, Neugraben-Fischbek, Tonndorf times annual rent Ö POOR LOCATION Moorfleet, Neuenfelde Süderelbe times annual rent Ö 5

6 INVESTMENT PROPERTIES Stadtteile FOCUS ON im CITY Fokus DISTRICTS Statistics for Hamburg s city districts provide confirmation that the current market situation has resulted in all locations becoming ever more attractive to investors. As was already the case in 2013 and 2015, the Eimsbüttel district once again topped the rankings, with 25 properties sold. In second place was Rahlstedt with 20 transactions the highest figure in the last ten years. Bronze was taken by Harburg with 19 properties sold, ahead of Rotherbaum with 16. SALES OF APARTMENT BUILDINGS IN THE CITY DISTRICTS FROM 2008 TO 2016 eimsbüttel altona-altstadt ottensen 149 st. pauli HeImFeLD rotherbaum Harburg WInterHuDe barmbek-süd barmbek-nord rahlstedt 108 bergedorf to to to and above Source: Property Market Report 2017, Gutachterausschuss Harburg achieved first place for the period since 2008, performing significantly better than second-placed Eimsbüttel. In third place was Ottensen, ahead of fourth-ranked Winterhude. This ranking demonstrates that interest is evenly distributed across established investment property areas such as Winterhude and Eimsbüttel; trendy districts such as Ottensen and areas south of the Elbe, such as Harburg, which are habitually categorized as poor locations. In point of fact, almost every sixth transaction last year related to a property in the Süderelbe area. This figure is, however, lower than in 2015, when almost every fourth transaction was concluded south of the river. When considering the number of transactions according to district in 2016 it is noticeable that the interest of purchasers wishing to invest in comparatively cheaper investment properties has shifted from the Süderelbe area to focus more strongly on districts in eastern Hamburg. Figures for areas such as Bramfeld, Wandsbek, Billstedt or Bergedorf have thus improved. Districts on the northern fringes have also experienced stronger growth for example Schnelsen, Niendorf or Fuhlsbüttel. In contrast, fewer sales were recorded in districts closer to the city centre and the Alster. The shift in focus to the outer districts is also due to increased building activities in these areas. Project developers are searching for affordable plots with links to public transport (S- or U-Bahn trains). In city centre locations attractive plots are now being sold for up to /m² prior encumbrance on the planned residential floor space insofar as any plots at all are available. The development of affordable housing for example within the scope of 6

7 INVESTMENT PROPERTIES Duvenstedt Wohldorf- Ohlstedt Hamburg s three-thirds model comprising one-third each freehold apartments, subsidized and privately financed rental apartments is thus a challenge. Wohnungsbau verdoppelt PROPERTY CONSTRUCTION DOUBLED Hamburg s housing market in 2017 has been characterized by continuing strong demand and a larger number of new building projects. The Housing Alliance, formed by the housing sector, the Hamburg Senate and the city districts in 2011 and renewed in 2016, has resulted in a 100 % increase in both planning permission and completion statistics for the Elbe, Alster and Bille areas in the period to Figures published by Statistik Nord show that planning permission was granted for residential units last year, while were completed. In addition to this, official statistics for the first five months of 2017 indicate that planning permission was granted for units twice as many as in the comparable period for SALES IN THE CITY DISTRICTS IN 2016 Neuenfelde Francop Hausbruch Schnelsen Eidelstedt Altenwerder Moorburg Heimfeld Niendorf Groß Borstel Wilhelmsburg Harburg Eißendorf Wilstorf Marmstorf Sinstorf Fuhlsbüttel Neuland Ohlsdorf Gut Moor Rönneburg Langenbek Poppenbüttel Lemsahl- Mellingstedt Langenhorn Hummelsbüttel Wellingsbüttel Tatenberg Spadenland Alsterdorf Steilshoop Bramfeld Moorfleet Neugraben- Fischbek Bergstedt Farmsen- Berne Lokstedt Lurup Eppendorf Barmbek- Tonndorf Stellingen Winterhude Nord Rissen Hohelufberg Wands- Harveste- Barmbek- bek Duls- Sülldorf Iserbrook Eimsbüttel Jenfeld hude Süd Osdorf Bahrenfeld Uhlenhorst Sternschanze Marienthal Rotherbaum Eilbek Blankenese Groß Altona Hohenfelde Flottbek -Nord St. Neustadt Alt- Georg Borgfelde Hamm Nienstedten Horn Ottensen St. Othmarschen Altona Pauli stadt Hammerbrook Billstedt -Altstadt Finkenwerder HafenCity Cranz Rothenburgsort Waltershof Steinwerder Kleiner Billbrook Grasbrook Veddel Sasel Ochsenwerder Billwerder Volksdorf Rahlstedt Neuallermöhe Allermöhe Reitbrook Lohbrügge Kirchwerder Bergedorf Neuengamme Curslack None to 4 5 to 6 7 to 9 10 to and more Altengamme The Housing Alliance s objective is to have residential units ready for Source: Property Market Report 2017, Gutachterausschuss zinshausteam-kenbo.de 7

8 INVESTMENT PROPERTIES The residential district on the Baakenhafen dock stretches from the HafenCity University to the Elbbrücken. Planned completion: 2025 construction each year. Average annual population growth in Hamburg has, however, exceeded residents each year since 2010, meaning that, viewed in statistical terms, any new apartments are immediately absorbed into the market. Neue NEW Quartiere RESIDENTIAL DISTRICTS In response to this the city has initiated major construction projects and pressed ahead with existing ones. The HafenCity continues to be Hamburg s largest urban development project. Building rights have been awarded for the first plots in the Elbbrücken area, the last undeveloped site in the new district located between the city centre and the Elbe. Construction of some apartments with views across the Baakenhafen dock will begin in the Elbbrücken area in 2020, with commercialuse high-rise buildings providing protection against noise from the port. The first apartments are approaching completion, with a total of apartments planned around the dock will see work commence on just under 500 residential units each in the Strandkai area opposite the Elbphilharmonie concert hall and in the southern Überseequartier district. The second-largest urban development project currently under construction is the Neue Mitte Altona project with the adjacent Holsten Quartier site. The Mitte Altona s first phase, comprising apartments on the former site of the railway freight depot, is nearing completion. From around 2024 onwards the second phase will see a further apartments built directly to the west, on the site of what is currently Altona Long-Distance Train Station. The area around the Mitte Altona project is set to further expand in 2019, when work begins on the former site of the Holsten brewery, where apartments are planned. Within the scope of similar-sized projects, apartments are planned along the canopy now being constructed over the A7 motorway in Altona, Stellingen and Schnelsen for example at the horse-racing track in Bahrenfeld of the residential units originally planned will be built under the auspices of the Refugee Accommodation with a Residential Perspective project. The apartments, initially 8

9 INVESTMENT PROPERTIES PRICE DEVELOPMENT OF HAMBURG INVESTMENT PROPERTY LOCATIONS /m 2 Prime Location Good Location Secondary Location Tertiary Location Poor Location Source: Property Market Report 2017, Gutachterausschuss granted planning permission as refugee struction at Mittlerer Landweg in Billwerder. This is a direct consequence of the accommodation but complying with social housing regulations, will quickly be Stromaufwärts an Elbe und Bille urban made available to other user groups such development concept for eastern Hamburg, put into place in The Alliance as students and apprentices. The objective is to provide affordable housing while for Districts, founded by the Hamburg also promoting social integration of refugees. The programme s largest project in 2015 to realise this concept, believes Senate, districts and the housing sector comprises 750 apartments under con- that potential exists to build over apartments; this will, however, primarily be achieved through construction on vacant urban plots in line with the philosophy More City in the City. In response to strong population growth not only in the form of refugees in 2015 the city s red-green Senate expanded its urban development strategy to include the More City in the City concept. This concept includes what will, in future, be the city s largest urban development project in Oberbillwerder. Planning for a new district with up to residential units has already begun. Its envisaged location is marshland to the north of Allermöhe train station and entries for a corresponding urban planning competition have been requested. The More City in New Locations concept also includes the Vogelkamp and Fischbeker Reethen new developments, under construction in Neugraben on the furthest outskirts of south-east Hamburg but with a rail connection to the centre. In direct proximity to this is the Fischbeker Heidbrook new-build development, located on the former site of the Röttiger barracks. In all under residential units are planned in Neugraben. A further apartments will be built along the axis of the major Wilhelmsburger Reichsstrasse thoroughfare, which will, in turn, be relocated to the east along the route of the railway tracks. Three development areas, Wilhelmsburger Rathausviertel, Elbinselquartier and Spreehafenviertel, are planned between the Neue Mitte (new centre) Wilhelmsburg, bordered by the Department of Urban Development and Housing s new building in the south and the Spreehafen docks in the north. From here it is just a short distance to the HafenCity. POLITISCHE POLITIcal Restriktionen RESTRICTIONS Taking into consideration the efforts being made to develop the quantity of housing available in line with population growth, political initiatives to regulate the housing sector are, in some cases, irritating. These initiatives, which originate both from federal and Hamburg government, are designed to be complementary. zinshausteam-kenbo.de 9

10 INVESTMENT PROPERTIES SOCIAL PRESERVATION STATUTES IN HAMBURG ALREADY VALID Bahrenfeld-Süd (2016) Ottensen (2016) Altona-Altstadt (2014) Eimsbüttel-Süd (2014) Sternschanze (2013) Ottensen Osterkirchenviertel (2013) St. Pauli (2012) St. Georg (2012) Neustadt-Süd (1995) PLANNED Nördliche Neustadt/ Venusberg (Ende 2017) Eimsbüttel-Nord (Anfang 2018) Hoheluft-West (Anfang 2018) Stellingen-Süd (Anfang 2018) PRELIMINARY REVIEWS/ PRELIMINARY CONSIDERATIONS Bahrenfeld-West Barmbek-Nord Hamm-West Hohenfelde Horn Ottensen-Nord-West Uhlenhorst Winterhude Soziale Erhaltungsgebiete SOCIAL PRESERVATION AREAS Social preservation statutes are a classic form of housing sector regulation. At present they apply to an area of 606 ha located in districts close to the city centre and affect residents in households saw statutes also come into force for Ottensen (22 March) and Bahrenfeld-South (8 November). In addition to this, resolutions have been passed to implement statutes for Eimsbüttel/ Hoheluft-West/Stellingen-South (26 July 2016) and northern Neustadt/Venusberg (16 June 2015). STREITFALL CONTROVERSIAL Mietpreisbremse RENT CAP On 1 July 2015 rent cap legislation covering the whole of the city of Hamburg was introduced. The housing associations organised in the Housing Alliance and the Senate had agreed that, subsequent to this, they would commission an expert opinion to assess the validity of the legislation s introduction in all districts. TURNOVER M EUROS CONSTRUCTION PLOTS FOR APARTMENT BUILDINGS - TURNOVER AND TRANSACTIONS Source: Property Market Report 2017, Gutachterausschuss The dispute surrounding this expert opinion, on whose criteria the alliance part- in Hamburg does not provide sufficient assertion that there is a housing shortage ners could not agree, almost prevented grounds for such a far-reaching measure. the renewal of the Housing Alliance. In June Munich District Court followed In the meantime, on 23 May 2017 Altona this judgement, referring to federal legislation and stating that The statement of District Court ruled that the Ordinance concerning the Introduction of Rent Capping in Hamburg was ineffective, decla- the basis for the judgement that there is reasons must provide the facts forming ring that there is no viable justification for a housing shortage in a specific area. it. The court argued that the unspecific On 22 June St. Georg District Court, how NUMBER OF CONTRACTS 10

11 INVESTMENT PROPERTIES ever, ruled that Hamburg s rent cap is effective because, among other reasons, calculation of the typical rent for privately financed housing in an area was carried out representatively using a qualified rent index. Irrespective of the ruling on the issue, two years after the legislation s introduction it is apparent that the rent cap has had hardly any effect on the development of rents and no effect whatsoever on the development of sales prices. Should Federal Minister of Justice, Heiko Maas (SPD) get his way, this will change after the federal parliamentary elections. Essentially, he wishes to tighten up two aspects of the controversial legislation. Firstly, landlords should, in future, be obliged to inform new tenants what rent their predecessors paid. Secondly, Maas would like to limit the passing on of modernisation costs by owners to their tenants to 8 % instead of the 11 % currently allowed, pointing to current low interest rates. The CDU has, to date, not supported this tightening up of legislation within the Grand Coalition. Up until now, many investors with long-term strategies have also based their activities on the assumption that legislation will be limited to the period to The new state governments in Schleswig-Holstein and North Rhine-Westphalia have already passed resolutions to abolish rent capping legislation. Sonderabschreibung SPECIAL WRITE-OFFS für FOR den CONSTRUCTION OF Mietwohnungsneubau NEW RENTAL HOUSING Federal Minister for Construction Barbara Hendricks (SPD) is attempting to score points by offering special tax writeoffs for the construction of new rental apartments in markets suffering from shortages. The Grand Coalition rejected this plan in July 2016 after failing to agree on the upper limit for construction cost subsidies. Hendricks has also indicated that she could imagine special write-offs for energy-saving modernisation measures for existing rental apartments. Alternatively, professional real estate associations have called for linear depreciation for capital assets to be raised from 2 % to 3 %, arguing that property life cycles are becoming shorter as a result of rapidly increasing technical standards. There has zinshausteam-kenbo.de 11

12 INVESTMENT PROPERTIES also been a call to award investment subsidies to companies which do not view tax write-offs as an incentive to invest. INTERIOR DEVELOPMENT MEASURE (IEM) IN PREPARATION The Interior Development Measure (IEM) has yet to become law. It is based on a proposal made at federal level by the Active Property Policy working group of the Alliance for Affordable Housing and Construction. Owners who, for private or speculative reasons, are unwilling either to carry out construction work or to sell should have a duty to carry out such work imposed on them by means of creating a statutorily defined interior development area. This duty could also be based on new development plans. Should the owner fail to comply with this duty, then the local council could exercise a pre-emptive right to purchase the property and if necessary expropriate it. A number of local councils have commissioned a legal opinion regarding the IEM and model projects. The objective behind the IEM is to activate building land as well as to create an instrument which prevents speculation. In Berlin, for example, the gap between granting of planning permission and completion of housing is growing ever wider. Speculators are purchasing plots with the expectation that granting of planning permission will further encourage the dynamic rise in values which has characterised the market in Germany s capital city for the last five years. Speculation is not yet a significant issue in Hamburg also because the city s investor structure is very different to that of Berlin. Hamburg s Mayor, Olaf Scholz, has nevertheless admonished investors several times to quickly realise construction projects which have been granted planning permission rather than to speculate on exploiting value increases. DURCHSETZUNG ENFORCEMENT DES OF THE ZweckentfremdungsverbotS MISAPPROPRIATION BAN In 2017 the district set a precedence case concerning the enforcement of the misappropriation ban in line with Articles 9, 12 a and 12 b of the Hamburg Housing Protection Act (HmbWoSchG). It appoin- 12

13 INVESTMENT PROPERTIES ted a trustee to manage an apartment building with six units in Hamm which had been vacant since 2012 and, despite the imposition of various fines, had not been refurbished and let. Acting in place of the owner, who had temporarily been deprived of ownership, the trustee had the apartments made fit for habitation and let them. The district permits this if, in violation of the HmbWoSchG s misappropriation ban, housing cannot be used for this purpose over a longer period of time. Upon regaining possession of ownership the owner must enter into the legal actions and transactions carried out by the trustee. It is not clear whether this precedence case can be deemed to relate to speculative vacancy or not. Gebäudeenergiegesetz: BUILDING ENERGY LEGISLATION: EnEV + EEGWÄRMEG + EEWÄRMEG = GEG In January 2017 the German Energy Saving Regulations (EnEV) and Renewable Thermal Energy Act (EEWärmeG) were merged to form the Building Energy Act (GEG), however without any new concept or simplification. A key task of the forthcoming federal government should be to fine tune implementation of the stated requirements to allow the use of any type of technology. This would give developers and investors the power to decide for themselves which technology they wish to use to achieve the goals specified. It is, furthermore, believed that subsidies should be granted for climate and energy policy-related goals which cannot be realised within the scope of the usual renovation cycles. ONE UNIFORM EINHEITLICHE CONSTRUCTION CODE One of the more satisfactory initiatives of the federal government has been the implementation of a national model construction code. Its objective is to standardise the varying state construction codes. Many of the states have, however, shown resistance to the idea of giving up their own regional laws and standards in favour on one uniform code. Professional real estate associations would like to see the model construction code also include standard framework parameters for serial construction and planning permission for building types zinshausteam-kenbo.de 13

14 INVESTMENT PROPERTIES.AUS BUSINESS ERNEUERBAREN TAX ON ENERGIEN TENANT ELECTRICITY Thomas König The possibility of becoming a member of a tenants electricity company plays a positive role in making apartments attractive. These companies use renewable energy sources to generate cheap, environment-friendly electricity. A drawback of the current legislative proposal is the risk that business tax may become payable if income generated by rentals and leases is infected with commercial income realised from the generation and supply of renewable energies to buildings. DIE 2017 TRENDS TRENDS AUF ON DEM THE Zinshausmarkt INVESTMENT PROPERTY IN 2017 MARKET Demand for investment properties in Hamburg remains unbroken this year. Purchase price multipliers, which rose again in 2016, have been slowing since mid Last year saw virtually no investment properties in prime locations sold for less than the equivalent of 30 times the annual net rent. While 2016 saw the discussion surrounding the charging of penalty interest by banks further fuel interest in real estate, there has been a slight tendency for interest rates to rise since autumn Although the European Central Bank (ECB) has yet to follow the US Federal Reserve s (FED) policy of implementing small increases in interest rates, it is expected to decide to do so before the end of the year in response to economic recovery in Europe s crisis states. Should this occur, it is probable that the price peak will have been reached. Lars Linnenbrügger This is, however, unlikely to cause any slump in prices or demand. A more feasible prospect is that there will be lateral movement across the high level already achieved since, viewed in the long term, interest rates continue to be as low as never before and there is no real alternative to property investment, in particular for institutional investors. Current trends will, however, be a turning point for speculative investors who buy at a 30-fold multiplier to sell at the 35-fold multiplier after a short period of time. The sale of investment properties with a comparatively high percentage of commercial space will become increasingly difficult. A number of trends have resulted in the search for tenants for retails units on arterial roads or in secondary locations in particular becoming ever more challenging. This can be attributed to competition from the Internet, which is causing problems not only for retailers but also, for example, kiosks selling lottery tickets. In addition to this, retail is becoming progressively more concentrated in city centres and local shopping centres. Not all shops which become vacant can be used as children s day-care centres particularly in view of noise emission regulations for residential areas. THE LARGER THE PORTFOLIO, Je THE grösser HIGHER das THE Portfolio, MULTIPLIER In recent months investment pressure has caused institutional investors to exhibit investment behaviour which turns existing market laws on their heads. 14

15 INVESTMENT PROPERTIES Matthias Baron properties had been offered in smaller packages and, in some cases, with a higher percentage of equity capital. This phenomenon has become progressively more common since the end of 2016, with significantly over-inflated prices paid in some cases. Possible losses in value do not, however, impact the market because these investors have an extremely longterm focus, allowing them to easily absorb price fluctuations and not be forced to sell on the properties. Oliver Sieweck Guido Bennemann Wenig LITTLE Angebot, ON OFFER, viel PLENTY Kapital OF CAPITAL Large-volume portfolios not only in the residential investment property sector but also in the commercial property sector are being assembled for investors, who only begin to bid when prices reach the two-digit million figure. To obtain the possibility to invest a larger volume of capital in one chunk, these investors are willing to participate in highest bidder procedures, paying higher multipliers for properties than they would have if the same This gilding of portfolios is problematic for relatively small investors looking to invest in the 0.8 million to 1.5 million segment a classic Hamburg investor clientele. Price increases in themselves plus the assembly of large packages mean that these investors have limited choices. This trend is becoming more pronounced since the number of properties on the market is not expected to grow, even if interest rates gradually increase. The increases in value currently being experienced in combination with rising income thanks to sharp climbs in rents mean that private owners have little incentive to sell. This is first and foremost due to the fact that the capital market has few attractive investment alternatives, which will also remain the case for the foreseeable future. Following the most recent sales, Scandinavian investors, who purchased numerous properties in Hamburg some ten years ago, now have virtually no properties left in the city. Investors who do have the opportunity to purchase have no need to worry about financing. After the mortgage bank sector thinned out noticeably following the 2008 financial crisis, Hamburg now has significantly more institutions looking for borrowers than it did ten years ago. In addition to na- zinshausteam-kenbo.de 15

16 INVESTMENT PROPERTIES NUMBER OF FREEHOLD APARTMENTS SOLD IN 2016 HAMBURG S TOP WINTERHUDE ALTONA-NORD EIMSBÜTTEL BARMBEK-SÜD RAHLSTEDT BERGEDORF LANGENHORN EPPENDORF BARMBEK-NORD NIENDORF WANDSBEK tional and international financial institutes, who primarily supply commercial investors with external capital, regional banks and savings banks are increasingly also venturing outside of the city s boundaries. ALTERNATIVES: FREEHOLD APARTMENTS OR PERIPHERY Alternativen: In response to this, small investors are investing more frequently in tenanted freehold apartments. According to figures published by the Hamburg Committee of Valuation Experts, to purchase contracts for freehold apartments have been concluded each year since Turnover in this period has, however, more than doubled from 1.17 billion to 2.42 billion. This also applies to the price per square metre, which averaged in formance. In many city centre districts subdivision has, however, been impeded by the widening of social preservation statutes. Subdivision is forbidden, as is any modernisation which results in a significant increase in the value of apartments. Interest in investment outside of Hamburg s boundaries is also growing. Demand is high, for example, for investment properties in areas which have commuter rail connections (S- and U-Bahn) to Hamburg. These include Ahrensburg and Grosshansdorf, Neu Wulmstorf and Buxtehude, Pinneberg, Wedel or Norderstedt. Positive demographic perspectives are also attracting investor interest to Lüneburg, Lübeck, Kiel or Flensburg, where prices have, in some cases, risen significantly although remaining clearly below the levels achieved in Hamburg. It is thus possible to purchase a prime-location investment property in Lüneburg for the same price as an average investment property in Hamburg s Hamm district. 12 HAMMERBROOK 149 Source: Property Market Report 2017, Gutachterausschuss Subdivision into freehold apartments can be an attractive selling option for owners of investment properties who are dissatisfied with the property s per- Experience, however, shows that Hamburg s classic private investment property investor primarily puts his money into his district. 16

17 COMMERCIAL investment COMMERCIAL Investment IN Hamburg Hamburg office and commercial properties have a reputation among national and international investors as solid capital investments. The city s diversified economic structure ensures, for example, that demand for office space comes very a wide range of sectors. Mixed demand for office space in the first half of 2017 was thus not untypical for the market. In terms of space take-up, demand was highest from industry, which provides an above-average contribution to Hamburg s value creation chain compared to other major German cities. Consulting companies, traditionally an important sector in this port and trading city, made up the second-largest segment, followed by public authorities. In fourth place was the real estate industry, ahead of educational institutions, which seldom account for so much take-up. In this case turnover was generated by the University of Hamburg s modernisation and new construction programme. These five segments accounted for almost two-thirds of office take-up in the first six months of this year. zinshausteam-kenbo.de 17

18 COMMERCIAL investment. CAPITAL TURNOVER verdoppelt DOUBLED SINCE 2008 Hamburg s heterogeneous economic structure ensures that the real estate market is less volatile while still growing steadily. Figures issued by the Hamburg Committee of Valuation Experts show that, following the depression after the 2008 financial crisis, turnover generated by office and commercial properties has more than doubled, from 1.28 billion to 2.83 billion last year. Turnover in 2016 thus exceeded the tenyear average by just under 30 %, however was 6 % lower than the record figure of 3.01 billion in There were a total of 284 transactions last only 7.2 % above the ten-year average demonstrating the significant rise in prices also experienced in Hamburg. It should be noted in this context that the markets for office properties, business premises and retail units are not developing synchronously. Büroimmobilien OFFICE REAL ESTATE boomen BOOMING Office properties are currently experiencing a boom in terms of leasing contracts and sales. The ten-year average for office space take-up, m², has been significantly exceeded every year since Following record take-up of m² in the first half of 2017 it can be expected that current year will also achieve annual take-up significantly in excess of m². In addition to the above-mentioned leading sectors in terms of demand, it is also noticeable that co-working companies account ever more frequently for large transactions. WeWork has, for example, concluded a long-term rental contract for m² in the Hanse Forum building on Axel-Springer-Platz opposite the new Springer development and the future location of the Mitte district s offices. Among the Top 10 transactions is also the renting of m² of office space by Spaces, the Regus co-working subsidiary, at the Work Life Center on Gorch-Fock-Wall. Regus also NUMBER OF OFFICE AND COMMERCIAL PROPERTIES SOLD TURNOVER (in million euros) Source: Property Market Report 2017, Gutachterausschuss 18

19 COMMERCIAL investment TAKE-UP (in m 2 ) Source: Property Market Report 2017, Gutachterausschuss signed a contract to lease space for a business centre in the Ü8 building in City Nord. Landlords appear keen to do business with co-working companies since it allows them to make more flexible use of their properties office space, thus also making them more attractive to existing tenants. The investment market is reacting in a similar manner. Interest in office spaces which allow the realisation of current and future workplace concepts has resulted in increased demand. In addition to this, the number of office workplaces has once again risen significantly. According to figures published by bulwiengesa, in the period from 2006 to 2016 office space in Hamburg expanded by just over 10 % to 13.7 million m² the highest figure for any major German city. Despite this, in the same period the vacancy rate fell from 8.5 % to 5.3 % and this year was less than 5 %. Rental take-up is thus limited solely by the lack of properties. From 2011 to 2015 less than m² of new office space zinshausteam-kenbo.de 19

20 COMMERCIAL investment David Kenney rest of a predominantly flourishing economy in office space with modern facilities. While vacancy rates are falling, highest and average rents are climbing. After ranging from 19 to 25/m² in the early 1990 s, the highest rents broke this ceiling in Although large spaces on Alte Wall, for example, were already being let for 29/m² in 2015, the weighted top rent is now also in excess of 26/m². Average rents are a more obvious indicator of the scarcity of office space, having now reached 15/m² over 20 % more than five years ago. Andreas Boberski ting the new headquarters of publishing group Gruner+Jahr. The group will rent some m² of the m² total floor area. Should the market demand it, the early 2020 s will see a further approx m² of office space created in high-rise buildings at the eastern end of the Baakenhafen dock near the Elbbrücken. The first plots for three office buildings with a total area exceeding m² have already been assigned to developers. In addition to this, a 150-m high skyscraper with up to m² total floor space is planned between the Elbbrücken, of which at least 50 % will be office space. The invitation to tender is currently underway. became available on the market each year. In 2016 this figure was significantly in excess of m², including the Telekom Campus City Nord ( m²) and the headquarters of the Employers Liability Association (VBG) at Barmbek railway station ( m²). In the current year, however, as in 2018 and 2019, the foreseeable completion rate will be between and m² per year too little to meet the strong inte- LARGE PROJECTS GroSSe IN PLANNING Projekte AND in UNDER Planung CONSTRUCTION und Bau Planning for a number of major projects including large areas of office space is actually under way in Hamburg. In the southern Überseequartier, currently under construction, for example, developer Unibail-Rodamco plans to develop m² of office space by 2021 including an office sculpture designed by French architect Christian de Portzamparc at the Magdeburger Hafen dock. On the opposite side of the Magdeburger Hafen dock, on the corner of Baakenhafen dock, the Watermark and Shipyard office buildings, developed by ECE and with a total of m² letting space, are nearing completion. Just a stone s throw away at Lohsepark Warburg-HIH Invest will be construc- Besides the HafenCity, major projects which are ready to begin or already under way are primarily located in the city centre. The Alter Wall project, for example, has been under construction for two years now. Located adjacent to the Town Hall (Rathaus), developer Art-Invest is creating m² of office space and m² for retail and gastronomy behind the historic listed façade. Also under construction is the Springer Quartier project at Axel-Sprin- 20

21 COMMERCIAL investment SALES IN THE CITY DISTRICTS IN 2016 ger-platz, where Momeni is developing some m² total floor space, of which m² is office space, by Commerz Real has now begun to demolish the former headquarters of the Allianz insurance group at Grosse Burstah. Plans envisage approx m² total floor space, of which m² will be for offices, to be completed by Directly adjacent to this site, in July Procom Invest received permission to replace the two buildings on the site of the former headquarters of the Commerzbank with a group of new buildings. This project also includes some m² total floor space with a high percentage of offices. A controversial project is the construction of new buildings on the site of the present office space of Hamburg Mitte, opposite the Hauptbahnhof main train station. Aug. Prien has been awarded the contract to construct a group of new buildings with just under m² total floor space, of which m² will be for offices. The project, located at the entrance to the Kontorhaus district World Heritage site, could be completed None to 6 7 to 9 10 and more Neuenfelde Francop Hausbruch Schnelsen Eidelstedt Altenwerder Moorburg Heimfeld Niendorf Groß Borstel Wilhelmsburg Harburg Eißendorf Wilstorf Marmstorf Sinstorf Fuhlsbüttel Neuland Ohlsdorf Tatenberg Spadenland Alsterdorf Steilshoop Bramfeld Barmbek- Gut Moor Rönneburg Langenbek Duvenstedt Poppenbüttel Lemsahl- Mellingstedt Langenhorn Hummelsbüttel Wellingsbüttel Moorfleet Neugraben- Fischbek Bergstedt Farmsen- Berne Lokstedt Lurup Eppendorf Tonndorf Stellingen Winterhude Nord Rissen Hohelufberg Wands- Harveste- Barmbek- bek Duls- Sülldorf Iserbrook Eimsbüttel Jenfeld hude Süd Osdorf Bahrenfeld Uhlenhorst Sternschanze Marienthal Rotherbaum Eilbek Blankenese Groß Altona Hohenfelde Flottbek -Nord St. Neustadt Alt- Georg Borgfelde Hamm Nienstedten Horn Ottensen St. Othmarschen Altona Pauli stadt Hammerbrook Billstedt -Altstadt Finkenwerder HafenCity Cranz Rothenburgsort Waltershof Steinwerder Kleiner Billbrook Grasbrook Veddel Source: Property Market Report 2017, Gutachterausschuss Sasel Ochsenwerder Wohldorf- Ohlstedt Billwerder Volksdorf Rahlstedt Neuallermöhe Allermöhe Reitbrook Lohbrügge Kirchwerder Bergedorf Neuengamme Curslack Altengamme zinshausteam-kenbo.de 21

22 COMMERCIALinvestment The Zeise 2 commercial building in Hamburg-Ottensen, completed in by The investment volumes stated for all the above-mentioned city-centre projects are in the range of 250 million to 300 million. The city centre and HafenCity are not the only areas in which it is possible to develop large projects. Procom Invest and Quantum Immobilien, for example, built a m² Hamburg office on Friedensallee in Ottensen for British communications group WPP and, in the meantime, has sold it. In neighbouring Bahrenfeld Quantum Immobilien is developing new headquarters for credit insurer Euler Hermes. The building, which has a total floor space of m², is scheduled for completion in 2019, while both wings of the Fleet Office building in City Süd have already been completed. Becken Immobilien completed, rented and sold the ensemble in Heidenkampsweg, which has just under m² floor space and is in direct proximity to the new Olympus headquarters, in The latter project, developed by the Zech Group, offers m² rental space, of which Olympus will initially lease m². While the highest rents in City Süd were, for a long period and seemingly immovably, 12/m², rents of up to 16/m² are now being achieved. Rents for offices in trendy districts west of the city centre, such as Altona and Ottensen, are even higher. In areas around the Alster rents for new buildings have now risen to almost the same levels as in the city centre and HafenCity, while newly or re-rented properties in the centre are now achieving average rents of around 20/m². Figures published by bulwiengesa indicate that office rents in Hamburg increased by some 4 % in 2016 the secondhighest figure for a major German city. Only in Berlin did demand in conjunction with a vacancy rate of under 3 % last year result in a higher increase in rents over 16 %. Büro- COMPETITION und Hotelprojekte BETWEEN OFFICE im AND Wettbewerb HOTEL PROJECTS Despite or perhaps even because of this situation, with the exception of the above-mentioned major projects, too few new buildings or refurbishments are being developed in the medium-sized 22

23 COMMERCIAL investment PRICE INDEX FOR COMMMERCIAL INVESTMENT PROPERTIES LOCATION DISTRICTS MICRO-LOCATIONS UNDER DEVELOPMENT MULTIPLIER OFFICE SPACES RENT per m 2 / RETAIL SPACES RENT per m 2 / TREND CITY Altstadt, Neustadt Area Stadthausbrücke, Kontorhausviertel, Nikolaiviertel times annual rent Ò HAFEN HafenCity and Hafenrand Baakenhafen times annual rent Ò CITY DISTRICT MARKETS Altona, Barmbek, Eimsbüttel, Eppendorf, Ottensen, St. Georg, Winterhude An der Alster, Euler-Hermes- Gelände, Fuhlsbüttler Str. (Bahnhof Barmbek), Gasstraße, Neue Große Bergstraße times annual rent Ò BACK OFFICE Hammerbrook (City-Süd), Winterhude (City-Nord) Nordkanalstraße, Sonninstraße 16,5-23,5 times annual rent Ò 23

24 COMMERCIAL investment segment up to approx m² - in Hamburg. Falling vacancy rates coupled with increasing rents are taking the pressure off private owners in particular to invest in the modernisation or new development of old existing buildings. Parallel to this, media reporting means that owners often have clear ideas about the value of their properties, demanding prices which deter many developers from taking a risk. In addition to rising prices for properties and plots, construction costs have also increased significantly while, despite the upward trend, rents have developed less dynamically than these costs. A further factor is the competition which many office developers are experiencing from hotel developers when participating in highest bidder procedures for real estate particularly in districts close to the city centre, such as Hammerbrook/ City Süd, Borgfelde or Barmbek. Hamburg is benefitting from strong growth in tourism and business travel, with the number of overnight stays increasing by 5.5 % to 13.3 million in Although new hotel projects are announced each month, the number of beds in the city Altstadt 22 HARBURG 12 HAMMERBROOK only increased by 3 % last year. There thus still appears to be a backlog in demand. Hotels are now almost an obligatory element in mixed-use projects, such as the southern Überseequartier; the Esso Quartier on the Reeperbahn or Fuhle 101 in Barmbek. Bevorzugte PREFERRED LOCATIONn LOCATIONS This development into secondary locations is also reflected in statistics published by the valuation expert committees regarding transactions in the office and commercial properties segment. Investor demand has been focused on the city centre, at least viewed across a period of several years from The most popular district is the Altstadt, with 134 transactions, ahead of Neustadt with 120 sales contracts. In third place is Harburg (89 transactions) followed by Bergedorf (65) and Hammerbrook (61). Last year, in contrast, Hammerbrook which also includes back-office location City Süd was among the front runners (15), followed by Harburg (14). These districts were ahead of Altstadt and Neustadt (each 11), tying with Lohbrügge and just ahead of Bramfeld (10). In common with these outlying areas Wandsbek and Rahlstedt have also experienced a significant rise in investor interest since Sicherheit und SECURITY Rendite AND RETURNS TRANSACTIONS IN THE CITY DISTRICTS BRAMFELD The dynamic development of the real estate investment market to date has been driven by two objectives security Source: Property Market Report 2017, Gutachterausschuss and returns. Property is, in comparison to government bonds, still a far more lucrative investment option and certainly a far safer one than stocks and shares. The yield gap between a tenyear German government bond and a well-let, modern office property in a prime Hamburg location continues to be in excess of 250 base points. In this context, the price rally since 2014 has accelerated. Top yields for Hamburg office properties in the period 2010 to

25 COMMERCIAL investment 2014 fell by only 0.5 %, from 5 % to 4,5 %. In the meantime, yields have fallen again, to 3.5 % and, in some cases, less. Little profit remains after the deduction of inflation and ancillary costs. As a response to this, districts outside of the city centre are becoming more attractive. Maximum yields in these areas are still around 4.5 % while the continuing diminishing availability of vacant office space ensures that security has increased. In addition to this, in their search for competitively priced office rents, many companies are turning their attention to peripheral districts. The growing number of residents and office-based workplaces is currently leading to increased demand and is expected to continue to be the case for the next five to ten years. The establishment of flexible workplace models by companies in conjunction with demographic trends which have only been slowed to their current level by immigration will, however, result in a significant reduction in the volume of office space required by 2030 at the latest. Investors planning long-term investments must thus consider the future TURNOVER EURO BN 2,0 1,95 1,9 1,85 1,8 KEY PERFORMANCE INDICATORS FOR HAMBURG S RETAIL SECTOR Sales are in K m 2 Turnover Hamburg city centre in bn Highest rents /m² Highest rents /m² , , Source: Property Market Report 2017, Gutachterausschuss sustainability of locations and properties. The growing trend to link work and living environments is expected to boost demand for office space in popular mixed-use urban areas. Strukturwandel STRUCTURAL CHANGE im IN Einzelhandel THE RETAIL SEGMENT Recent years have seen retail properties become a less important factor in the office and commercial properties sector both in terms of turnover and development of yields. Top yields have thus fallen from 4.7 % in 2010 to 3.6 % in 2015, where they have since remained. As a result, the office sector has overtaken retail properties in terms of yield decrease. This was already the case for investment turnover weighting, which saw the office segment achieve a share of over 60% in recent years. While retail properties previously always took second place, hotels or logistics halls have, in some cases, now achieved higher turnover shares. This lateral movement is a response to structural change in the retail segment, in turn determined by two trends the growing significance of online retailing and of central shopping locations. In the last ten years Hamburg s city centre has undergone visible upgrading as a shopping location. Within the scope of over a dozen Business Improvement Districts (BID) owners of inner city retail units between the Möncke zinshausteam-kenbo.de 25

26 COMMERCIAL investment Mixed use consisting of offices, shopping and gastronomy in a historic building - the Stadthöfe on the corner of Neuer Wall/Stadthausbrücke. bergstrasse and Opernboulevard BIDs have invested in excess of 45 million in making street spaces more attractive as well as in improving cleanliness, safety and service. The latest project is the Mönckebergstrasse BID, with an investment volume of over 10 million, intended, among other things, to finance a modern lighting concept. A further 15 million has been raised by district BIDs for example in Wandsbek, Bergedorf or Harburg. This upgrading has prompted developers and investors to put hundreds of millions of euros into new shopping destinations, such as the Stadthöfe at the end of Neuer Wall (5 000 m² retail area); the Alter Wall project ( m²); the Perle Hamburg on Spitalerstrasse ( m²) or the Kaisergalerie between Grosse Bleichen and Bleichenfleet (3 500 m²). In the period to 2015 top rents previously only achieved on Spitalerstrasse and Neuer Wall rose to 290/m², however have subsequently stagnated at this level with owners increasingly experiencing difficulty in finding tenants prepared to pay such rents. Turnover for the current approx m² retail area in the city centre is just under 2 billion. The city centre s share of Hamburg s retail area is, however, only 13 %, while its share of turnover is less than one quarter. As a result, in addition to the above-mentioned projects further developments are in the pipeline for Hamburg. In 2016 alone m² of new retail space was completed in the city, for example the Perle Hamburg or the W1 in Wandsbek (8 000 m²). Figures published by bulwiengesa indicate that a further m² will come onto the market between 2017 and This includes the Stadthöfe; the Alter Wall project or Fuhle 101 at Barmbek train station (8 000 m²). Another m² of retail space should become available in 2021, of which m² will be located exclusively in the southern Überseequartier. Umstrittenes CONTROVERSIAL Südliches SOUTHERN Überseequartier ÜBERSEEQUARTIER Although this m² total retail area plus m² for gastronomy re- 26

27 COMMERCIAL investment presents only around one third of the planned m² total floor space of the southern Überseequartier project, an investment of billions of euros, it unquestionably also stands for the most controversial use of the HafenCity district s core area. While the retail sector and owners of classic 1a locations in the city centre expect projects such as the Perle Hamburg, the Stadthöfe or Alter Wall to result in upgrading of the entire district and corresponding increases in turnover, the southern Überseequartier is viewed as a separate location outside of the established shopping area. Irrespective of the efforts of political and administrative decision-makers and developers Unibail-Rodamco to find an appropriate definition, the outcome of the project in the southern Überseequartier will, de facto, be a shopping mall with 200 retail outlets. This is significantly more than the total available on Spitalerstrasse and Mönckebergstrasse (120 shops). The spaces available in the underground car park will ensure that the complex becomes a one-stop shopping destination. The redistribution of up to 10 % of turnover, for example in the textiles segment, forecast by experts represents a businessthreatening loss for some fashion retailers, who have already been hit hard by competition from online shopping. The establishment of the southern Überseequartier as a retail site would also undermine the successful efforts to attract more consumers into the city centre, as argued by the City Centre Interest Group (Trägerverbund Innenstadt), primarily made up of retailers and owners, particularly those located in the eastern city centre. City centre retailers have, indeed, benefitted greatly from the increase in tourists including the passengers expected during the 200 calls made by cruise liners to Hamburg in It is precisely these cruise passengers who should, in future, generate a significant percentage of turnover in the southern Überseequartier. This is additionally problematic for city centre retailers since the number of local shoppers visiting the area has been falling for many years now. A controversial subject among city centre retailers - the southern Überseequartier is envisaged as the heart of the HafenCity district. zinshausteam-kenbo.de 27

28 COMMERCIAL investment DISTRICT CENTRES Stadtteil-Center ON THE UP Expert opinions support the supposition that Hamburg residents are increasingly shopping in their local areas. The losses suffered by the city centre have, to date, been compensated for by increased numbers of out-of-town visitors. In recent years significant investment has been made in district centres. The Marktplatzgalerie Bramfeld project saw just under m² of retail space created in The W1 development has provided m² of retail space within the radius of the Wandsbeker Markt BID since 2016, while Matrix Immobilien is currently converting the former Langenhorner Markt shopping mall into local retail centre LaHoMa with an area of m² for retailers and gastronomy. The developer is also planning a similar project in Jenfeld. The Ikea city store, which offers a concentrated Ikea range on m² retail space and was opened in 2014, has resulted in further follow-up investment by private and institutional investors and successfully revitalised the Grosse Bergstrasse area, located to the east of Altona train station, as a shopping destination. To the west of the station is Ottenser Hauptstrasse with the Mercado mall, for many years now a well-established retail location. Retailers have also discovered the Schanzenviertel and Karoviertel districts as trendy locations. All of these sites offer opportunities for long-term real estate investments. In this context it should, for example, be taken into consideration that sellers with successful online shops are increasingly seeking opportunities to also create a High Street presence. Parallel to this, the focus on district centres is, however, resulting in a significant decline in the attractiveness of retail outlets and gastronomy units on arterial roads or less frequently visited secondary locations. 28

29 INVESTMENT AND COMMERCIAL PROPERTIES REFERENCES EIMSBÜTTEL Residential and commercial building in portfolio BARMBEK-NORD Residential and commercial building in portfolio UHLENHORST Residential and commercial building in portfolio TORNESCH Apartment package EIMSBÜTTEL Apartment building FARMSEN-BERNE Development plot BILLSTEDT Apartment building OTTENSEN Apartment buildings OTTENSEN Residential and commercial building SCHNELSEN Apartment building LÜBECK Office and commercial building BORGFELDE Apartment building zinshausteam-kenbo.de 29