Office Leasing and Investment

Transcription

1 MARKET Report Hamburg Q1-Q2 217 Office Leasing and Investment Accelerating success.

2 Reception Colliers International Hamburg GmbH Hamburg StatiSticS Population 1,861, Expanse Employees Paying Social Security Contributions in 1, 753 sq km 948, Unemployment Rate 6.7 % Trade Tax Multiplier 47 % Per Capita Disposable Income 24,241 Sources: Statistisches Bundesamt, Statistische Landesämter, Bundesagentur für Arbeit, Nexiga GmbH Fast Facts office LeaSing Office Space Take-up 287, sqm Leasing Take-up 269, sqm Prime Rent 26. /sqm Average Rent 15.3 /sqm Vacancy Rate 4.8 % Office Space Stock 13,71 million sqm Office Leasing Take-up of Space The Hamburg office market proved to be in excellent shape in H1 217, posting a 25% yoy increase in take-up and exceeding the 5-year average by 2%. Leasing activity (excluding owneroccupiers) ammounted to 287, sqm, reflecting an unabated strong demand for office space. The city is currently experiencing an excessive surplus demand as it never has before. This unmet need can be attributed to a shortage of available space, particulary in the medium and large Take-up of Space in 1, sqm Leases Owner-occupiers Q Market Report Office Leasing and Investment Q1-Q2 217 Hamburg Colliers International

3 space segments. To date, Olympus signed the biggest contract of the year for roughly 34,5 sqm. The newly constructed property in the Wendenstraße (City Süd) will become the company s new European headquarter. The second largest lease was signed in the first quarter 217 by the University of Hamburg, who is now temporarily occupying 2, sqm at the Überseering 35 (City Nord). Almost 5% of the take-up was generated by leases and occupierowner deals of 1, to 5, sqm. Leases signed for the City submarket in H1 217 accounted for around 26% of total take-up, putting the City on equal footing with the City Süd at 23%. Due to the scarcity of available office space, the occupiers are increasingly turning to other districs, ensuring future demand to spread over several submarkets. With 1% of the take-up, the City Nord came in third place. Supply and Vacancy Within the past 12 months, vacancy dropped by 2 base points, from 5.% to 4.8%. In Q1 217 vacancy ammounted to 4.9%. In light of the ongoing high demand and comparatively moderate new-built activity, we can expect the vacancy rate to continue to drop as the year progresses. The competition for attractive space we are currently observing among businesses wanting to move, is bound to increase as a result. Consulting firms had been the most active group by far in leasing office space since early 216. Whereas in H1 217 it was just barely ahead of the manufacturing industry sector (large-scale lease signed by Olympus) with around 2%. Other businesses and companies from the construction and real estate sector accounted for 1% each, a result that can primarily be attributed to the leases signed by Business Centers. We expect to see more signings within this growing segment as the year progresses. The large number of start-ups based in Hamburg is triggering increased demand for flexible, shortterm office concepts, which the traditional office leasing market cannot offer. MARKET OVERVIEW Location OFFICE SPACE TAKE UP (incl. owner-occupiers) in sqm SUSTAINABLE RENTS in /sqm/month AVERAGE RENT in /sqm/month 1 City 74, Hafen City 16, Hafenrand 4, Alster West 7, Alster Ost 3, St. Georg City Süd 64, St. Pauli 2, Altona 8, Bahrenfeld 11, Eimsbüttel 2, Eppendorf 1, Airport City Nord 28, Barmbek 1, Wandsbek 6, Harburg 4, Periphery East 9, Periphery West 21, Total 287, Market Report Office Leasing and Investment Q1-Q2 217 Hamburg Colliers International 3

4 Take-up of Space by Size (in 1, sqm and %) % 17 % up to 5 up to 1, up to 2, up to 5, from 5, Take-up 23 % Take-up by Industries Top Five (in sqm) and share of Total Take-up (in %) 21 % 27 % Rents Prime rents rose by 4% to a current 26. per sqm in H1 217 with average rents climbing 4.1% to a current 15.3 per sqm. Both prime and average rents, however, proved to be stable compared to Q IMMAX Property Index The IMMAX property index indicates the supply and demand trend on the office market. It reflects the relationship beteween supply at a specific point in time and take-up of office space over the previous 12 months. Supply figures include current vacancies (space available within 3 months) and potential space that will become available within 12 months thanks to new developments and newly vacant stock space. Lease take-up from the previous 12 months is included in take-up calculations. The calculation does not include office space taken up by owner-occupiers. The property index dropped considerably in H Currently for every squaremeter of rented office space in Hamburg, there are 1.4 sqm of space offered. Due to ongoing vacancy absorption, moderate speculative new-build activity and high take-up, we expect the demand for office space in Hamburg to remain high and the property index to remain low throughout ,9 53,2 28,5 28, 2 % 19 % 1 % 1 % 27, 9 % Consulting Firms Building and Real Estate Manufacturing Industry Educational Institutions Other Prime and Average Rents (in /sqm) Prime Rent Average Rent Q Market Report Office Leasing and Investment Q1-Q2 217 Hamburg Colliers International

5 Key Developments The property developments scheduled for completion in the next few years will not be able to sufficiently meet excess demand, particularly within the downtown area. Moreover there is also a chance that some projects currently in the planning phase will never come to fruition. For instance the project City Hochhäuser near the central railway station, whereby the current urban heritage conservation could impede a redevelopment. Outside the city center, multiple owner-occupier developments are scheduled for the near future. The Beiersdorf AG will start constructing approximately 5. sqm in Eimsbüttel by 218. Like most owneroccupier developments the volume of completion will not increase the overall vacancy. Therefor it only entails a contingent relaxation of the market. Vacancy (in 1, sqm) and Vacancy Rates (in %) 1, % % % % 4.8 % H1 217 Summary and Outlook Based on H1 217 s outstanding result, an overall high demand and the currently known major requests at the Hamburg office market, we anticipate an annual take-up of 55, sqm. Property Index IMMAX 7/217 1/217 7/216 1/216 7/215 1/215 7/214 1/214 7/ Completion Volume (in 1, sqm) Market Report Office Leasing and Investment Q1-Q2 217 Hamburg Colliers International 5

6 Investment Transaction Volume Corinna Nürnberger Junior Consultant Research Tel corinna.nuernberger@colliers.com Fast Facts Investment Transaction Volume Largest Buyer Group: Open-ended Real Estate Funds/ Special Funds Largest Seller Group: Opportunity Fonds/Private Equity Fonds Most requested Type of Property: Office billion 28. % 4. % 61. % Prime Yield Office 3.4 % Commercial assets in Hamburg changed hands for roughly 1.3bn in H1 217, falling short H1 216 s record transaction volume of over 1.9bn. Even though H1 217 results came in 11% below the five-year average and roughly 35% below the previous year level, investor interest remains strong. Hamburg currently holds the fourth place among Germany s seven largest real estate hubs. Buyer and Seller Groups In 217 foreign investors, primarily from Norway, the UK and the US, proved to be more active buyers than in the previous-year period, accounting for around 42% of total transaction volume and setting the pace on the commercial real estate market. As this result shows, Hamburg continues to be popular with foreign investors, who consider the city a stable and attractive investment destination. In H1 217, Norwegen Wenaasgruppen signed the largest single asset deal for a hotel asset. Open-ended real estate funds and special funds were the most active buyers on the Hamburg market, just like in the rest of Germany, generating a combined 35m, or 28% of total transaction volume. Private investors and family offices as well as asset/fund managers were also very active, pouring roughly 28m (22%) and 23m (19%) into Hamburgian assets. Property developers continue to fill their pipeline, accounting for approximately 1% or 13m. Opportunity funds/private equity funds and corporate/owner-occupiers proved to be the most energetic in selling assets, generating around 5m from sales (4% TAV). Asset/fund managers finished in second place, disposing of assets valued at 18m. Investment Assets Commercial Transaction Volume (in billion ) The sale of the Radisson Blue Hotel for about 2m contributed heavily to the particularly large share in transaction volume generated by hotel assets in Q1 217 (37%). This number dropped significantly to 18% in Q2, with office sales accounting for a market share of around 61%. As in the previous year, office assets were by far the strongest asset group on the Hamburg real estate investment market. Retail assets came in third place with a share of around 8% followed by mixed-use assets (7%). Portfolio deals accounted for a 66% share in transaction volume, placing well ahead of single asset deals in H This result can primarily be attributed to deals like the HafenCity Gate office property of the Odin portfolio or the Züblin portfolio with a transaction volume of over 5m across three assets Q1-Q Market Report Office Leasing and Investment Q1-Q2 217 Hamburg Colliers International

7 Investment Highlights Transaction Volume by Buyers Group (Millions of ), Share (in %) Limited supply again heavily influenced the market activity, leading to further yield compression in H Prime office yields dropped from 3.7% to current 3.4%, a downward trend of 3 base points yoy. Prime retail yields also fell by 4 base points from 3.6% to 3.3%. Yields for logistics assets currently account to 4.9%. Limited supply is not only pushing prices but also shifting investor focus to areas of the city that were previously less ess in the focus. Districts such as St.Georg and Altona are benefitting from their central location and available infrastructure. Investors have also set their sights on Harburg, which adorns itself with several interesting assets and considerable potential for development. Prices in the submarkets have risen considerably as a result. With stable leasing markets, investors are starting to fund higher risk manage to core assets. The growing number of forward transactions indi-cates the willingness to venture, a trend that will become even more noticeable throughout the year. Summary and Outlook Open-ended Real Estate Funds/Special Fonds Private Investors/ Family Offices Asset/Fund Manager Developers/Constructors Banking and Finance Reflecting upon Germany s top seven real estate markets, Hamburg was the only one to record a steep yoy drop in transaction volume in H1 217, falling short of expectations. Hamburg is likely to catch up to the current TOP 3 (Berlin, Munich, Frankfurt) in H2 with several high-volume deals in the pipeline expected to be finalized in the coming months. However, in light of limited supply, Hamburg will not be able to repeat last year s result of 4.9bn in transaction volume. Transaction Volume by Sellers Group (Millions of ), Share (in %) Opportunity Funds/ Private-Equity-Funds Asset/Fund Manager Developers/Constructors Corporates/Owner-occupiers Other Types of Properties (in %) Mixed-use Properties Retail 8 Industrial Building Sites Hotel Offices Market Report Office Leasing and Investment Q1-Q2 217 Hamburg Colliers International 7

8 43 Offices in 68 countries on 6 continents United States: 153 Canada: 29 Latin America: 24 Asia Pacific: 86 EMEA: 111 Author: Corinna Nürnberger Junior Consultant Research Tel corinna.nuernberger@colliers.com Colliers International Deutschland GmbH Burchardstraße 17 D Hamburg billion in annual revenue 95 billion in transaction volume with more than 72, investment- and leasing-deals 17 Million spuare meter under management 15, Professionals worldwide About Colliers International Colliers International Group Inc. (NASDAQ and TSX: CIGI) is an industry leading global real estate services company with more than 16, skilled professionals operating in 66 countries. With an enterprising culture and significant employee ownership, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide. Services include strategic advice and execution for property sales, leasing and finance; global corporate solutions; property, facility and project management; workplace solutions; appraisal, valuation and tax consulting; customized research; and thought leadership consulting.colliers professionals think differently, share great ideas and offer thoughtful and innovative advice that help clients accelerate their success. Colliers has been ranked among the top 1 outsourcing firms by the International Association of Outsourcing Professionals Global Outsourcing for 11 consecutive years, more than any other real estate services firm. For the latest news from Colliers, visit Colliers.com or follow us on and LinkedIn. colliers.de Credit Cover Rappolt-Haus (TRIUVA), Mönckebergstraße 11, 295 Hamburg Copyright 217 Colliers International Hamburg GmbH This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Colliers International and/or its licensor(s) All rights reserved.