Office premises market Bonn 2011 Federal City of Bonn Economic Development Office
Office premises market Bonn 2011 Bonn as an office property location p. 2 Key figures 2010 p. 2 Letting activity p. 3 Take-up p. 3 Sectors p. 3 Size structure p. 4 Rental prices p. 4 Supply of office space p. 5 Vacancy p. 5 Projects p. 5 NRW.Urban building land p. 5 BonnProfits the business incubator p. 5 Office submarkets p. 5 International Business District p. 5 Bonner Bogen p. 6 City Centre and Südstadt p. 6 Bad Godesberg p. 6 Beuel p. 6 Duisdorf and Hardtberg p. 7 The North and West p. 7 Property service p. 7 Location of submarkets in the municipal area p. 8 Publisher: Mayor of the City of Bonn, Economic Development Department, Press Office November 2011 1
Office premises market Bonn 2011 Bonn as an office property location Bonn continued last year to evolve as a dynamic service location and effective base for both major global players and medium-scale enterprises. In the middle of 2010, 90.8 % of all persons employed in Bonn worked in the tertiary sector. This figure is matched by no other independent city or district in North Rhine Westphalia. The sharp increase in service-sector jobs in Bonn has generated considerable demand for office premises in recent years. Approximately 3.7 million m² of space across the city is put to office use. Accordingly, Bonn s office property market is distinguished by marked stability at a high level of leasing. This earns the city a B+ rating as a property location and thus a place among the Top 10 locations in Germany. Bonn is the home of four DAX companies: Deutsche Telekom AG, Deutsche Post DHL AG, IVG Immobilien AG and SolarWorld AG. Small and medium-sized enterprises (SMEs) account for 99.7 % of all businesses and around two-thirds of total employment. Bonn is also Germany s only UN city, with 18 secretariats and organisations. In recent years, large office premises and properties have been in demand among corporate groups and public institutions. SMEs normally seek premises smaller than 500 m². Many of the SMEs in the market are knowledgebased business service providers requiring highly skilled personnel for activities in IT and telecommunications, education and training or healthcare. The technical and managerial specialists required by such employers are particularly attracted to Bonn as a place to live because of its good leisure and recreational facilities, its special educational landscape and the good long-distance connections provided by Cologne/Bonn, Düsseldorf and Frankfurt airports. Area (27.12.2010) 141.22 km 2 Built-up area (27.12.2010) 63.82 km 2 = approx. 45 % Population (31.12.2010) 324,899 Population growth (01.01.2010 31.12.2010) Unemployment rate Bonn municipal area, annual average 2010 Persons employed in the services sector excluding public administration (30.06.2010) +1.58 % 7.0 % 122,194 employees subject to social security contributions = 79.4 % of total persons employed Persons employed in the services sector including public administration (30.06.2010) Growth of employment (01.01.2010 31.12.2010) 139,669 employees subject to social security contributions = 90.8 % of total persons employed +2.495 employees subject to social security contributions = +1.6 % growth General purchasing power 113.0 Fig. 1: Key Figures Bonn 2010 Sources: Bonn Statistics Office, IT NRW, Bundesagentur für Arbeit, Gesellschaft für Konsumforschung 2
This report highlights the locational advantages from which the Bonn office premises market profits. More detailed information on Bonn as a business location is available in the Economic Profile Bonn 2011, also published by Bonn s Economic Development Office. Letting activity in 2010 Sectors Enterprises operating in the miscellaneous and business services sector accounted for the largest share of take-up (26 %). Transport and logistics companies followed with 15.2 %. Around 14 % of take-up in 2010 was attributable to public services. One large lease was concluded in the Bonn North submarket by a federal agency. Demand from firms in the IT and telecommunications sector decreased. At around 12 % in 2010, it was sharply down on the trend of recent years. Take-up In 2010, Bonn s Economic Development Office registered a total of 136 office lettings. The total area of the premises concerned was approximately 89,500 m². Take-up was thus moderately higher than in 2009. Health and social care Academic service and research institutes Other Advocacy groups and associations 3,7% 4,4% 4,6% 5,1% In the five years from 2006 to 2010, the highest take-up recorded 117,000 m² was reached in 2007. In 2006, the figure was 84,000 m². The five-year average works out at 93,320 m², which identifies Bonn as a very sound office location. Marketing and market research Education and training IT and telecommunications services Public services Postal und transport services 6,5% 8,8% 11,8% 14,3% 15,2% Miscellaneous and business services 25,6% 120.000 117.000 0% 5% 10% 15% 20% 25% 30% 100.000 80.000 84.000 90.400 85.700 89.500 Fig. 3: Percentage breakdown of lettings by sector in 2010 m² 60.000 40.000 20.000 0 2006 2007 2008 2009 2010 Year Fig. 2: Take-up in the Bonn office premises market 2006 2010 Size structure The breakdown of lettings by size category shows a substantial percentage of leases concluded for small office units. However, the percentage of lettings relating to office units smaller than 500 m² fell to around 65 % in 2010, down from approximately 82 % in the prior year. These premises account for 19.6 % of total take-up. More than half of all leases concluded in Bonn are for office premises smaller than 300 m² (approx. 53 %). The lessees are mostly small and medium-sized service-sector enterprises that require only office space. 3
30 25 20 15 10 5 0 25,7 23,5 22,3 19,12 16,91 15,44 12,5 11,03 11,03 9,56 7,9 8,9 6,2 3,9 3,68 1,3 0,3 0,74 < 50 < 100 < 200 < 300 < 500 < 1.000 < 2.500 < 5.000 > 5.000 m² categories % of lettings % of office take-up Area in m² Office submarket Sector 8,000 North Federal agency 4,800 City Centre Transport and logistics 4,500 Int. Business District Business services 4,000 Int. Business District Banking 3,900 Int. Business District Transport and logistics 3,800 Int. Business District Transport and logistics Fig. 4: Lettings by size category in 2010 Fig. 5: Selected lettings in 2010 The largest share of total office take-up in 2010 was registered in the International Business District. More than a third (35.2 %) of all office space was let in this submarket. The lion s share of lettings (36.8 %) was recorded in the City Centre and Südstadt, although the leases concluded there accounted for only 17.2 % of the total amount of space let. The average number of square metres per letting in the City Centre/Südstadt submarket was around 300 m², compared with 1,260 m² in the International Business District. Rental prices Rental prices have changed little in recent years and continue to be stable. The highest rents were achieved in the Bonner Bogen and the International Business District, followed by the City Centre and Südstadt. Office submarket Rental price range in euro/m² (excl. VAT and service charges) Bonn North and West 5.50 10.00 Duisdorf and Hardtberg 5.50 9.00 City Centre and Südstadt 7.50 12.50 International Business District 10.50 15.00 Bad Godesberg 6.00 12.50 Beuel 6.00 10.00 Bonner Bogen > 16.50 Fig. 6: Rental prices in the various submarkets 4
Supply of office space Vacancy At the beginning of 2011, around 164,800 m² of office space in Bonn was vacant and available for rent according to the records of the Economic Development Office. This amounts to a vacancy rate of approximately 4.5 %, which is very low by international standards. Approximately 64,000 m² of this vacancy is structural, i.e. consists of premises that have been on the rental market for more than 24 months. The premises in question are often properties vacated by federal agencies and embassies or premises with a building infrastructure that does not meet the requirements and operational needs of the modern office occupier. Projects Supply is supplemented by construction projects at the planning stage and office buildings under construction. Approximately 12,000 m² of office space is currently under construction in the International Business District and tens of thousands of square metres of additional office space could be created by the end of 2012 through the realisation of projects in the Bonner Bogen, International Business District and Bonn North. NRW.Urban building land Three sites with an area of at least 2,800 m² are still available for further office construction projects in the International Business District. Detailed information is available from NRW. Urban. Guido Esser NRW.Urban Tel.: +49.228.763827-40 e-mail: guido.esser@nrw-urban.de BonnProfits the business incubator In January 2011, the City of Bonn launched the BonnProfits business incubator in the International Business District. Targeting knowledge-based service startups and national and international relocations, it offers up to 32 small rental units with floor areas starting at 11 m². Business incubator contact: Markus Heinen Economic Development Office, City of Bonn Tel.: +49.228.77-2036 e-mail: markus.heinen@bonn.de Office submarkets International Business District Bonn s International Business District the former government district is a high status urban development area with numerous architectural highlights, notably the landmark of the new Bonn, the 162.5 metre Post Tower. There are currently around 41,000 office workplaces in the International Business District, making it the premier office premises submarket in Bonn. Major sources of demand for office space in the International Business District include the DAX-listed companies Deutsche Telekom and Deutsche Post DHL and a number of the federal agencies based in Bonn (e.g. Federal Ministry for Economic Cooperation and Development, Federal Railway Authority). Clustered around them are a large number of business service providers (e.g. Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH, Bombardier Transportation) as well as advocacy groups (e.g. Fairtrade Labelling Organizations International, Deutsche Stiftung Denkmalschutz) and research institutions (Stiftung caesar). The United Nations is also present, with 18 secretariats; so are Deutsche Welle and internationally active organisations such as the International Paralympic Committee and Germany s national anti-doping agency NADA. Modern office buildings, proximity to the Rhine and Rheinauenpark and good accessibility make the International Business District an efficient and agreeable working environment. 5
Around 12,000 m² of office space is being created at present by the brandelf project on the former site of the permanent representation of the state of Baden-Württemberg. Another five construction projects with an aggregate area of 67,000 m² are currently at the marketing stage. Bonner Bogen With its supply of high-quality office space, the Bonner Bogen on the southern right bank of the Rhine is another key area of the Bonn office premises market. The investors aim is to realise buildings with a gross floor area of 150,000 m² on the site, most of the premises for office use. This will provide space for around 4,000 jobs in a vibrant area benefiting from offices, homes, restaurants, medical practices, hotel accommodation, nursery school and more. With around 57,000 m² of floor space above ground, the office properties that already exist in the Bonner Bogen have become headquarters for numerous international ICT, logistics and healthcare companies in recent years. Plans for the Campus Rheinwerk 3 development foresee the realisation of an additional 20,000 m² of office space available for rent. The premises created will include smallscale units. In June 2011, the Rheinwerk 2 office building was acquired for a special fund by Investmentgesellschaft KGAL. In December 2010, Deka Immobilien GmbH took over the director s villa and adjoining office complex for integration in a special property fund. Rheinwerk 1, with 11,000 m² floor space, was acquired back in 2008 by DIC Asset AG. The multi-award-winning Kameha Grand Hotel, with its large glass-roofed event hall overlooking the Rhine, opened on the Bonner Bogen in November 2009. It has 254 rooms and event facilities for 2,500 persons. City Centre and Südstadt The centre of Bonn is an attractive downtown area with a vibrant retail and restaurant scene. Most of its office space is occupied by public-sector service providers, including Bonn University and the City of Bonn, and privatesector providers such as insurance companies, property service companies, liberal professionals and business service enterprises. As a general rule, the office premises leased by these groups are considerably smaller than in the International Business District. Accordingly, supply here is geared to small and medium-sized office units, so relatively few large premises are available in the City Centre. The Südstadt, with one of Germany s largest preserved stocks of late 19th century buildings, is a mixed occupancy area of homes, local businesses and offices. On the upper ground floors of many of the lovingly restored, heritageprotected buildings are office suites that particularly appeal to the flexible operators of knowledge based service industries as well as consumer service providers such as lawyers and financial advisers. Units are often smaller than 200 m². Bad Godesberg The pattern of occupancy in Bad Godesberg is similar to that of the City Centre and Südstadt. Most properties in the centre of Bad Godesberg are occupied by retailers and service providers. In contrast to the centre of Bonn, however, downtown Bad Godesberg is fringed with large-scale office premises. In the century-old villa district, with its air of historical grandeur, office units tend to be smaller. There are exceptions, however, in buildings that used to accommodate embassies. In most cases, the entire buildings have been turned into large office suites or converted for other uses by new owners. Beuel The centre of Beuel is characterised by retail and residential properties as well as office premises at the smaller end of the scale. In Beuel East and South, ICT companies and federal agencies account for a significant amount of office occupancy. The south of Beuel is the location of a major office building and architectural landmark occupied by Deutsche Telekom (formerly the T-Mobile Campus). The municipal district of Beuel includes the Bonner Bogen. Because of the latter s special significance, however, it is described here as a separate office submarket. 6
Duisdorf and Hardtberg Aside from its function as the centre of the municipal district of Hardtberg, this submarket is the seat of a number of federal ministries (Federal Ministry of Defence, Federal Ministry of Food, Agriculture and Consumer Protection, Federal Ministry of Health). Owing to the presence of the ministries, Duisdorf is also a location for advocacy groups (e.g. the Association of Bundeswehr Employees) and related service providers (e.g. aid infodienst). Contact: Jenny Eidam Property Service Economic Development Office, City of Bonn Tel.: +49.228.77-3924 e-mail: jenny.eidam@bonn.de North and West In the 1990s, office buildings were constructed along the arterial roads and in the area around the Potsdamer Platz roundabout to meet the needs of Deutsche Telekom and federal agencies. At the river port, heritage-protected office premises have been modernised to high standards on the site of the former Auer flour mill. In the West, a developer is converting the buildings of a disused industrial site to blocks of small office units and hall premises. This submarket also includes space that is classed as craft, trade or manufacturing premises but is available to the office market when surplus to requirements. Property Service, Economic Development Office The Property Service maintains close contact with suppliers of office premises both owners and agents and responds with useful advice to inquiries from businesses and organisations interested in renting office space. The Property Service thus receives a constant flow of information, which is summarised in the data published here. 7
North West Duisdorf / Hardtberg Beuel City Centre Südstadt International Business District Bonner Bogen Bad Godesberg Fig. 7: Location of office submarkets in the municipal area 8