FrankfurtRheinMain Airport Location Neu-Isenburg 2016 Summary of the Market and Location Analysis Frankfurt am Main, May 2017 Bettinastraße 62 60325 Frankfurt (Main) Tel. (069) 75 61 467-60 info@.de www..de
Neu-Isenburg Macro Location Location in the Rhein-Main-Area! Counting over 38,000 inhabitants, the city of Neu-Isenburg belongs to the federal state of Hesse and is part of one of the strongest economic regions within Germany and Europe. Located in the administrative district of Offenbach, the city directly borders on the financial metropolis of Frankfurt in the south. European Transport Junction! Neu-Isenburg lies only within a few kilometres distance of Frankfurt Airport which represents the German and European hub for the international passenger and freight traffic. An ICE (high-speed train) stop is also located at the airport.! Moreover the city has perfect transport connections: for the individual transport it is connected via three motorways (A3, A5 and A661) as well as four federal roads.! Furthermore excellent public transport links exist: Neu-Isenburg is connected via S- Bahn, regional train, cable car and bus to Frankfurt Airport, Frankfurt City Centre (e.g. banking district, main station) and Darmstadt. FRA Motorway Junction A5 / A3 Zeppelinheim Urban area Neu-Isenburg Motorway Junction A3 / A661 Distance by car from... Distance by public transports from... Neu-Isenburg to... km minutes Neu-Isenburg train station to... minutes City Centre Frankfurt ca. 10 15 Banking District Frankfurt (S-Bahn) 15 Frankfurt Airport ca. 10 10 Frankfurt Airport (Bus) 21 Motorway Junction A3 / A5 ca. 5 8 Central Station Frankfurt (S-Bahn) 17 Motorway Junction A3 / A661 ca. 3 5 Darmstadt Central Station (S-Bahn) 20 map: openstreetmap.org 2017 AG Slide 2
Neu-Isenburg Stadtquartier Süd : Genesis of a New Neighbourhood A Freight Yard Turned New Urban Quarter! The brownfield of the former freight yard of Neu-Isenburg is to be developed into a new urban quarter in the coming years that will combine living and working areas, among other functions.! The development area covers a space of about 15 hectares. The current plans envision a maximum gross floor area of 156,000 sqm overall. According to the outline plan, which was passed by the city council in July 2014, 60 % thereof are earmarked for the use type residential and 40 % for office or commercial use (not including the DLB compound). Zoning the Area! The plans seek to carve up the area into different zones (marked with the German initials W for residential, G for commercial, M for mixed use, etc.) in order to optimise their integration into the adjacent built-up areas.! The existing buildings of the former BMV für Branntwein administrative complex have been set aside for use types of public character. Stadtquartier Süd Rail Commuter Access for the Town Centre/ Süd Trading Estate! The planned railway line along Frankfurt's western periphery ( Regionaltangente West ) will further improve the public transportation access of the new urban quarter and Gewerbegebiet Süd trading estate as well as of Neu-Isenburg s town centre. Since this project is still in a very early planning stage, the road map for its implementation has yet to be set out. map: openstreetmap.org 2017 AG Slide 3
Neu-Isenburg A Robust Business Location Competitive Location! The low trade tax multiplier enhances the attractiveness of Neu-Isenburg, and is an important locational advantage. However, the multiplier was raised from 320 % to 345 % in 2017. Whether this will put the damper on the demand for office floor space remains to be seen. It should be added though that all of the surrounding communities still exceed the trade tax level of Neu-Isenburg except Eschborn (330 %). Renowned Companies in Neu-Isenburg! Businesses on the ground cover a wide spectrum of sectors. International companies operating out of Neu-Isenburg represent the following industries, among others: aviation (e.g. Lufthansa or Boeing), chemicals (DuPont), electrical engineering (Arrow), banking (e.g. Banque PSA) and information technology (e.g. Ricoh, Canon, Lexmark).! The attractiveness of the town is underlined by companies such as Lorenz Bahlsen, which has been domiciled in Neu-Isenburg for around 50 years. Other companies that have been here for more than 15 years and remain loyal to the place include AirPlus and Pepsi.! The town also attracts a lot of companies from the greater Frankfurt area, as the following migration movements show: In 2015, Neu-Isenburg carried the day over Eschborn when Bilfinger Real Estate gathered all of its branches in the Rhine / Main metro region on a plot of around 24,000 sqm in the city s Gehespitz trading estate. Similarly, the US technology conglomerate Lexmark relocated its Germany headquarters to Neu-Isenburg in 2015, renting around 4,500 sqm of office space on Dornhofstraße. Moreover, the BKK Mobil Oil health insurance company relocated from Heusenstamm to Neu-Isenburg in 2016. Image source: AG 2017 AG Slide 4
Neu-Isenburg Selected Companies Based in Neu-Isenburg 4 18 5 6 7 8 9 10 11 12 17 13 16 14 15 19 20 2 1 openstreetmap CC-BY-SA, AG 3 1 6 11 16 2 7 12 17 3 8 13 18 4 9 14 19 5 10 15 20 2017 AG Slide 5
Neu-Isenburg Key Facts Location Location " In the centre of the metropolitan region FrankfurtRheinMain " Neighbouring city of Frankfurt am Main " Proximity to airport Frankfurt Spatial position Socioeconomic Data " 38,927 inhabitants (12 / 2016) " 27,384 employees subject to social insurance requirements (06 / 2016) " Rate of unemployment: 6.9 % (2016) " Purchasing power index: 111.7 (2017) " Trade tax multiplier: 345 % (2017) " Real estate transfer tax Hesse: 6.0 % FRA Motorway Junction A5/A3 Zeppelinheim Urban area Neu-Isenburg Motorway Junction A3/A661 Transport Connection " Private transport: A3, A5, A661, 4 federal highways " Public transport: regional train, suburban railway, tram, bus Selected Distances Via car to... Via plane (from FRA) to... Via longdistance traffic of DB (from FRA main-station) to Munich 390 km Munich ca. 1 h Munich ca. 3h 45 Berlin 560 km Berlin (TXL) ca. 1 h Berlin ca. 4h 10 Hamburg 500 km Hamburg ca. 1 h Hamburg ca. 3h 45 Dusseldorf 230 km Dusseldorf ca. 1h 10 2017 AG Slide 6
Neu-Isenburg Comparative Evaluation of Location Characteristics Category Gemeinde Commune Neu- Isenburg Eschborn Kronberg Bad Homburg Schwalbach Kelsterbach Offenbach Dreieich Image / Function Alternative Airport Location Additonal Location / Backoffice Frankfurt Location with Tradition Alternative Location Frankfurt Location with Tradition Alternative Airport Location Additonal Location / Backoffice Frankfurt Location with Tradition Connectivity 5 4 4 4 5 4 5 4 International Inter-connection 5 3 3 3 3 4 3 3 Cost Structure 5 5 4 4 3 3 2 3 (1 = very less pronounced; 5 = very well pronounced) 2017 AG Slide 7
Neu-Isenburg Prime Rent Maintains Stable Level Stable Level of Prime Rent! At the end of 2016, the prime rent in Neu-Isenburg stood at 13.00 euros/sqm RA-C, and was paid in existing buildings. This means that the prime rent maintained the level of 2015 year on year. With virtually no new buildings completed, the trend was driven by the leases signed for existing building stock. Indeed, even rates above the prime rent level may be accepted in existing buildings if these lie in an excellent location and meet a modern fit-out standard. The rack rent level for newly constructed buildings equals 14.50 euros/sqm RA-C or more. Demand Driven by International and Regional Companies! Especially the proximity to Frankfurt Airport and to the city of Frankfurt sets Neu- Isenburg apart from the other locations in the Rhine-Main region. The floor space demand is therefore dominated by companies to whom the locational benefits in combination with an affordable environment (low trade tax multiplier, attractive rents) appeal. Lease Transactions Dominated by Lettings of Existing Buildings! The annual take-up registered during the years 2012 through 2016 averaged roughly 30,700 sqm RA-C. In 2015 and 2016, the take-up totalled around 28,400 sqm RA-C and 25,800 sqm RA-C, respectively. This means that the take-up fell short of the 5-year average in either year. Worth highlighting in this context is the particularly high take-up of existing floor plate, totalling around 27,000 sqm RA-C (95 %) and 21,100 sqm RA-C (82 %), respectively. Prime Rent in Euros/sqm/month (from 2017 estimated) 15 10 5 50.000 40.000 30.000 20.000 10.000 0 10.20 13.00 07 09 11 13 15 17 19 21 Prime rent Take-up in sqm ø-rent 30,740 2012 2013 2014 2015 2016 Take-up stock Take-up new-build ø Take-up p.a. 2017 AG Slide 8
Neu-Isenburg Vacancies Keep Declining Steady Decline in Vacancies! Office vacancies added up to around 73,700 sqm RA-C by the end of 2016. This implies a substantial drop by around 11 % year on year. It is attributable not least to large-scale rentals of existing premises, including e.g. to ROM-Technik on Werner- Heisenberg-Straße or Hankook Reifen Deutschland GmbH on Siemensstraße. Currently at 14.1 %, the vacancy rate is well below the 20 % threshold.! It also shows that the peak vacancy of 2011 (25.5 %) has been radically rolled back. The main reason for this is that Bilfinger Real Estate rented its new premises in the existing buildings at Gehespitz trading estate.! The reduction of vacancies will continue in the near future because the completion figures remain low and because no speculative building activity is planned. It will be driven not least by the appeal that Neu-Isenburg has for neighbouring communities like Langen or Dreieich and for the Rhine-Main region in general. Regressing Completion Rate! Only two smallish projects were completed in 2015 and 2016, resulting in a completions volume of around 1,200 sqm RA-C in 2015 and or around 1,600 sqm RA- C in 2016 (headquarters of Brand Loyalty). With a view to the existing land development potential in the sub-districts Stadtquartier Süd and Zeppelinheim, it is reasonable to expect the coming years to bring additional completions in the office segment.! All things considered, the building activity in Neu-Isenburg appears to be in line with demand. The underwriting requirements stipulated by banks suffice to prevent speculative building activity. 150 100 50 0 40 30 20 10 0 Vacancy in 1,000 sqm 07 08 09 10 11 12 13 14 15 16 New Supply in 1,000 sqm 9.78 07 08 09 10 11 12 13 14 15 16 New Supply p.a. 10-year-average 2017 AG Slide 9
Neu-Isenburg Office Market Construction Activity in Frankfurt and its Surroundings* Neu-Isenburg Construction Activity Completed Under Construction *office sector: new-build buildings since 2012 to 2022 including currently under construction 2017 AG Slide 10
Neu-Isenburg Investment Market Germany a Secure Investment Market! In the international context, especially with regard to the economic and financial market situation in Europe, Germany s real estate market is considered a secure investment market.! Now, as then, core-oriented investors like closed-end funds, insurance companies, pension funds or family offices dominate the investment market. These players are interested in prime assets meaning properties in prime locations occupied on longterm leases in core markets like Frankfurt or Munich.! With the supply in the prime segment dwindling and prices for available assets soaring accordingly, the risk tolerance on the investor side is manifestly growing. Even valueadd investments with elevated vacancy rates in Class A cities or investment assets located outside the prime locations are increasing. Neu-Isenburg Offers Investment Opportunities! On the strength of its locational advantages, Neu-Isenburg keeps gaining in appeal as an investment destination, and is gradually moving into the focus of investors.! Completed transactions that document the trend include, for instance, the sale of the Stadttor office property to a German asset manager (in Q3 2016), the sale of the office property at Siemensstraße 12 to a UK asset manager (in Q2 2015), and the sale of the office scheme at Martin-Behaim-Straße 22 to a German asset manager (in Q4 2015). The transaction activity also illustrates the interest in the Frankfurt metro area, including Neu-Isenburg, that foreign investors have been showing. 2017 AG Slide 11
Neu-Isenburg Overview Office Market take-up 2015 2016 Ø take-up p. a. 28,400 sqm 25,800 sqm prime rent (realised) 30,740 sqm (5-year-average) prime rent (achievable) 13.00 Euros/sqm 13.00 Euros/sqm Take-up Structure (2012-2016) Due to missing new supply, stock rentings are dominating the market-activity vacancy (absolute) 83,000 73,700 vacancy rate 15.9 % 14.1 % new supply 1,500 sqm 1,600 sqm ø new supply p.a. 9,260 sqm (5-year-average) volume under construction 3,900 sqm multiplier** 5.85 % 5.25 % 9 % 91 % new-build stock selected high-capacity office users office space potenial (selection) AirPlus, Aramark, Arrow, De Longhi, DuPont de Nemour, Harley Davidson, Lorenz Bahlsen, Nintendo, PepsiCo Stadtquartier Süd, Zeppelinheim 2017 AG Slide 12
Frankfurt Airport Development Potential at Frankfurt Airport! In sync with the ongoing globalisation and motivated by its own growth, Frankfurt Airport is increasingly turning into a city in its own right, a so-called airport city that comprehensively covers the day-to-day needs of its occupiers (retail, office, hotel/ conferencing, logistics). The area directly surrounding the airport has begun to evolve much in the manner of regular urban development. An example for this trend is the Gateway Gardens quarter (still under development at this time) which is planned to feature the use types office, hotel and (within limits) retail. Neu-Isenburg as Complementary Location! Neu-Isenburg has traditionally benefited, and continues to benefit, from the town s proximity to Frankfurt Airport, similar to the new Gateway Gardens quarter that is under development right next to the airport.! Given the fact that Neu-Isenburg is so much closer to the airport than Frankfurt proper, and that it has lower asking rents and trade tax multipliers than the city, Neu-Isenburg will remain an attractive alternative office location for office occupiers wishing to be near the airport.! The fact that companies like Harley Davidson, De Longhi, Arrow, Bilfinger Real Estate or Lexmark relocated here in recent years suggests as much.! With the planned development of Stadtquartier Süd and with other projects contemplated in the trading estates Süd and Zeppelinheim, Neu-Isenburg will continue to offer plenty of office space potential in the future. Take-up Frankfurt Airport in 1,000 sqm 70 60 50 40 30 20 10 0 07 08 09 10 11 12 13 14 15 16 Prime and average rents Frankfurt Airport in Euros/sqm 35,00 30,00 25,00 20,00 15,00 10,00 07 08 09 10 11 12 13 14 15 16 Prime rent Average rent 27.50 18.50 *Definition Airport-City: Compare with Markt- und Standortanalyse Frankfurt/RheinMain Flughafenstandort Neu-Isenburg 2015 2017 AG Slide 13
Frankfurt Airport Region Office Locations & Construction Activity The Squaire Frankfurt Airport Center Main Airport Center Gateway Gardens Gewerbegebiet West / Gehespitz Gewerbegebiet Ost Mönchhof Area Cargo City Nord Cargo City Süd Frankfurt- Flughafen Zeppelinheim Gewerbegebiet Süd Gewerbegebiet Sprendlingen Focuses of uses Office Logistics 2017 AG Slide 14
Proprietary Information The survey is owned by. It is not allowed to use or circulate the survey or parts of it without prior written permission by. For single pictures of the survey proprietary rights of third parties can apply. Concerning cartographic illustrations the source of the base map must be indicated. 2017 AG Slide 15
www..de 2017 AG Slide 16