Commercial property market Germany/Top /Q1-2

Transcription

1 Investment/Office Letting Commercial property market Germany/Top 7 2/Q1-2

2 Lokale Local Expertise Kompetenz Across deutschlandweit Germany MARKTBERICHT MARKet Survey Investment/Bürovermietung Investment/Office letting 2/Q1-2 About US The partners local Expertise Across Germany german property partners Each of us is a leading commercial real estate company in our respective regions, and we have joined together to form a Germany-wide real estate network. Previously, the three of us were strong partners. In Northern Germany, Grossmann & Berger offers its real estate services out of its locations in Hamburg and Berlin, while Ellwanger & Geiger covers Southern Germany from its bases in Stuttgart and Munich. The third partner is ANTEON, which is active on the Düsseldorf real estate market. We have founded German Property Partners with the aim of providing our special services in all of Germany s major real estate centres. That way, whatever your commercial real estate requirements, wherever you are in Germany, you can obtain your advice from a single provider, and that is us. Via our network and thanks to our respective market positions, we can offer you outstanding local knowledge and preferential market access throughout Germany. The many years of service our employees have put in, and the affiliation of the two founding partners Grossmann & Berger and Ellwanger & Geiger with reputable regional banks, makes German Property Partners a reliable partner for long-term collaboration in the fields of commercial real estate and finance. Dear Readers, 2 started very well in the top 7 property markets in Germany, so that it seems highly possible that the volume of transactions will hit new record heights by the end of the year. This market survey provides a review of the first half of 2 as it played out on Germany s top 7 markets. In addition to drawing comparisons between the top 7 markets, we offer a detailed look at the investment and office letting markets in Hamburg, Berlin, Düsseldorf, Cologne, Frankfurt/Main, Stuttgart and Munich. The process of preparing and interpreting the data was made possible thanks to a partnership between three of the leading service providers specialized in commercial properties based in north, central and south Germany - the nationwide network German Property Partners (GPP). Our knowledge of local markets is as broad as it is deep, giving us access to data on the entire market, the top 7 locations and the sub-markets within each one. The present survey offers you a general view of the market. We would be happy to hold personal talks with you and answer your specific questions about property matters. Partners Grossmann & Berger A real estate consultant with experience stretching back for over 8 years, Grossmann & Berger is one of the leading service providers for the sale and letting of commercial and residential real estate in Northern Germany, and is an affiliate in the HASPA-Gruppe of companies. Ellwanger & Geiger With the backing of the private bank, Ellwanger & Geiger, Ellwanger & Geiger Real Estate, one of the leading real estate experts in Bavaria and Baden-Württemberg, offers advice on the sale and letting of commercial and residential real estate. ANTEON Founded in 28, Anteon is a Düsseldorf-based real estate service provider which offers 9 years of real estate experience. The firm specializes in advising companies on property management consultancies, and is active in the fields of office letting, investment, valuation and research. Germany/top HAMBURG... 8 BERLin... 1 düsseldorf Cologne Frankfurt Stuttgart Munich... 2 Kind regards Björn Holzwarth Spokesman for German Property Partners 2 3

3 MARKet Survey Investment/Office letting 2/Q1-2 Germany/Top 7 Facts & Figures key Figures 2/q1-2 In the 1st half of 2 the most remarkable market features of Germany s top 7 commercial property locations are the all-time low levels of empty offices and the record turnover figures for investment-grade real estate. This leads us to expect great things during the next half year. Björn Holzwarth, spokesman for German Property Partners Office letting: strongest industry by location Investment: strongest buyer group by location (share of take-up of space) (share of transaction volume) HAMBURG 1, m² (+11.6 %) 24. /m² (-2. %) 14.6 /m² (+2.1 %) 5.5 % (-1.9 pp) 1.95bn (+34.5 %) 4.3 % (-.2 pp) BERLIN 299, m² (+1.7 %) 22.5 /m² (. %) 14.3 /m² (+11.5 %) 4.6 % (-.6 pp) 2.9bn ( %) 4.4 % (-.45 pp) Hamburg 28.8 % IT/telecommunication Hamburg 3.5 % Fund managers Berlin Düsseldorf Cologne 1) Frankfurt 2) Stuttgart 4.4 % IT/telecommunication 19.3 % 37. % 29.8 % Industrial and trading companies Public administration Banks 39.5 % Industrial companies Berlin Düsseldorf Cologne 1) Frankfurt 2) Stuttgart 23.8 % REITs 35.4 % 35. % REITs Developers 27.7 % Pension funds 54.2 % Open-end/specialized funds DÜSSELDORF 169, m² (+38.5 %) 26. /m² (-5.5 %) 13.9 /m² (-6.1 %) 1.3 % (-1. pp).71bn (-39.7 %) 4.5 % (-.6 pp) Munich 11.8 % Services to business Munich 58.5 % Open-end/specialized funds % 1 % 2 % 3 % 4 % 5 % % 1 % 2 % 3 % 4 % 5 % 6 % Key figures top 7 Take- up of space [m²] Hamburg Berlin Düsseldorf Cologne 1) Frankfurt 2) Stuttgart Munich Top 7 1, 299, 169, 135, 177,7 147, 298, 1,476,7 year-on-year change 11.6 % 1.7 % 38.5 % 8. % 6.4 %.6 % -8.3 % 7.4 % Average rent [net /m²/mth] year-on-year change 2.1 % 11.5 % -6.1 %. % 5.3 % 4. % -1.9 % - Premium rent [net /m²/mth] year-on-year change -2. %. % -5.5 %. % 1.3 % 1.9 % -3.8 % - Vacant space [m²] 729,2 87, 785, 49, 1,365, ,5 1,132, 5,656,871 year-on-year change % % -7.5 % -1.1 % % -9.4 % % - Vacancy rate [%] 5.5 % 4.6 % 1.3 % 6.4 % 11.8 % 3.8 % 4.9 % 6.3 % year-on-year change [percentage points (pp)] -1.9 pp -.6 pp -1. pp -.8 pp -1.7 pp -.4 pp -1.6 pp -1.2 pp Transaction volume [million ] 1,95 2, , ,895 12,298 year-on-year change 34.5 % % % 88.7 % 11.7 % 7.3 % 66.4 % 57.9 % Premium yield Office [%] * Share of asset class Office [%] COLOGNE 1) 135, m² (+8. %) 21. /m² (. %) 11.9 /m² (. %) 6.4 % (-.8 pp).5bn (+88.7 %) 4.6 % (-.2 pp) STUTTGART 147, m² (+.6 %) 21. /m² (+1.9 %) 13.1 /m² (+4. %) 3.8 % (-.4 pp).59bn (+7.3 %) 4.5 % (-.5 pp) Key Figures Office Letting/Investment: Take-up of space (year-on-year change) Premium rent (year-on-year change) Average rent (year-on-year change) FRANKFURT 2) 177,7 m² (+6.4 %) 38.5 /m² (+1.3 %) 2. /m² (+5.3 %) 11.8 % (-1.7 pp) 2.75bn (+11.7 %) 4.6 % (-. pp) MUNICH 298, m² (-8.3 %) 32.9 /m² (-3.8 %).54 /m² (-1.6 %) 4.9 % (-1.6 pp) 2.9bn (+66.4 %) 3.75 % (-.2 pp) Vacancy rate (year-on-year change) Transaction volume (year-on-year ch.) Premium return office (year-on-year ch.) 1) Data: Greif & Contzen Immobilien GmbH, 2) Data: Colliers International Deutschland 4 * Net initial return 1) Data: Greif & Contzen Immobilien GmbH, 2) Data: Colliers International Deutschland 5

4 MARKet Survey Investment/Office letting 2/Q1-2 Germany/Top 7 Investment Office Letting The volume of investment transactions involving commercial properties in Germany s top 7 locations totalled some 12.3bn at the end of the 1st half year (excluding residential buy to let trades). Following modest growth rates, this represents a surge of more than 5 % compared with the same period a year ago. As expected, the volumes involved in individual transactions have risen significantly and the front runners posted results more than twice as high as in the prior quarter. TRANSACTION VOLUME In the 1st half year the two busiest markets were Berlin and Munich, which each accounted for just under 3.bn of the transaction volume. And even though the front-runner Berlin saw the highest growth rate, with a 13 % rise in transaction volumes, the six biggest deals in the 1st half of 2 all took place in either Frankfurt or Munich. The thirdhighest transaction volume was registered in Frankfurt, with a total of nearly 2.8bn. This city also saw the biggest single transaction, the sale of the Trianon office highrise for a price of some 54m (Mainzer Landstr. 16) which NorthStar Realty Finance bought from Madison International Realty. Apart from Düsseldorf and Stuttgart, all the locations posted new records. Year on year the volumes of transactions in Berlin and Frankfurt have more than doubled. As some big-ticket sales had been pending, the record turnover in Munich was not unexpected, despite the lack of core products. With a transaction volume of just under 2.bn, Hamburg also posted a new record, topping the 27 result. The transaction volume in Düsseldorf was 712m by the end of the half year. While Stuttgart s result ( 59m) was only slightly higher than in the same period of the prior year due to an excess of demand over supply, Cologne ( 5m) reported an exceptionally large volume of transactions. In the 1st half year international players in the market for investments in commercial properties accounted for a trading volume of 6.bn, almost half of the total. Non- German investors were most active in Cologne (72 %) and Frankfurt (6 %). RETURNS Without exception, the premium returns for office properties were below 5. %. The scale ranged from 4.6 % in Frankfurt and Cologne to 4. % in Munich. The biggest drop in premium returns for office properties was.6 percentage points registered in Düsseldorf, whereas Hamburg, Cologne and Munich reported the lowest declines of.2 percentage points. If interest rate policies remain as they are now, premium returns will probably shrink even more, although the decline will be slower. Bond and stock markets, IPOs and M&As; right now people are very unsure about what is going to happen. During the last quarter the market for investment in commercial properties, by contrast, has developed extremely well in the top 7 locations. Financial intermediaries are particularly active, because they need to reduce their extremely high cash holdings. It remains to be seen what happens next on the market. The only thing one can say with certainty is that there will be more big-ticket transactions this year. Year on year, take-up of office space in Germany s top 7 property markets rose by some 7 %. Take-up of space totalled around 1.48m m² in the 1st half of the year. Owner-occupiers increased their share of the total to some 13 %. The amount of space let totalled some 1.28m m². Apart from Munich, which saw a decline of some 8 %, all other locations noted a continuing upwards trend in the take-up of space. Despite a noticeable drop in demand, nearly 3, m² of space was newly taken in Munich and in absolute terms the city remains, together with Berlin, the biggest property market. In the case of Berlin, this was due to the third-largest lease registered in the country, when Rocket Internet signed for more than 22, m² of space (Kochstr, 22, GSW highrise ) and in Munich s case it was the sixth-biggest property transaction nationwide, namely the construction start of a, m² office block for Rohde & Schwarz (Mühldorfstr.) The greatest growth in take-up of space was seen in Düsseldorf (38.5 %), Stuttgart (.6 %) and Hamburg (11.6 %). Düsseldorf benefited in the 2nd quarter from the fifth-largest agreement in Germany, when it was reported that L Oréal had taken 16,7 m² at Ross Strasse/Johann Strasse. Stuttgart profited disproportionately from the decision made by Robert Bosch to move into a 3, m² IT Campus in Stuttgart-Feuerbach as owner-occupier. Growth in Hamburg was driven by the City of Hamburg s 1st quarter purchase of a building in the former Axel-Springer complex, offering 32, m² of floor space, and the City s rental agreement for 19,4 m² of offices on Nordkanal Strasse. Even though take-up of office space in Cologne rose by 8 %, this metropolis on the Rhine registered the lowest figure, 135, m², of Germany s top 7 locations. and Munich the third-highest was posted in Hamburg at 14.6/m²/month. The biggest rise in average rents was seen in Berlin, where they grew by 1.48 to 14.3/m²/month. Whereas the overall vacancy rate in Germany s top 7 property locations was 7.5 % during the first half of 214, by the end of the same period of 2 it had dropped to 6.3 %. With vacancy rates hitting 3.8 % in Stuttgart, 4.6 % in Berlin and 4.9 % in Munich, it is certainly no exaggeration to speak of all-time lows. Shortage of space and a lack of available land for development projects, especially in the most sought-after inner-city locations, will inevitably lead to a further rise in premium rents. The greatest volumes of office space available within a short term were located in Frankfurt (1.37m m²) and Munich (1.13m m²). The volume of completions for the entire year will total some 1.1m m², spread over 1 different projects. Berlin is the focus of new building activity with 318, m² under development; the new BND intelligence service building alone accounts for 11, m² of this total. Most market factors have not changed since the previous quarter. Negative effects might be produced by current wage negotiations, the collapsing market for exports to Russia and the uncertainty about how the Greek drama might end. The new record high on the job market, with more people in work than at any time in the past years and several enquiries for properties larger than 5, m² are, however, encouraging signs. Transaction volume Germany/top 7 Transaction volume by asset classes Germany/top ca..62bn (in %) Other (3 %) Logistics (2 %) Undeveloped land (4 %) Retail Hotel 9 % 16 % 66 % Office The higher proportion of owner-occupier transactions stems from growth rates that reached treble digits in some cases, caused by transactions involving more than 3, m² in Stuttgart, Frankfurt and Hamburg. In Frankfurt this refers to the 32, m² of offices at Windmühlen Strasse purchased by financial consultancy Deutsche Vermögensberatung in a sale registered in the 1st quarter. In terms of both premium and s, the highest rates for office space were posted in Frankfurt ( 38.5 and 2./m²/month respectively) and Munich ( 32.9 and.54/m²/month). The premium rent rose further in Frankfurt than elsewhere, increasing by 5 cents/ m²/month. This was mainly attributable to rental agreements in prestigious office properties. After Frankfurt Take-up of space Germany/top 7 (in s m 2, incl. owner-occupiers) ca. 3.1 million m

5 MARKet Survey Investment/Office letting 2/Q1-2 HAMBURG The volume of investment transactions involving commercial property in Hamburg came to just under 2.bn for the 1st half of 2. With year on year growth of 34 %, investments have reached their highest level since 27. Some 45 % of the volume of transactions in Hamburg concerned packages of more than one property. PROPERTIES As in the past, investors preferred asset class was the office building, sales of which accounted for some 7% of the total transaction volume. Three large portfolio sales related to this class of asset. Norrporten sold three office blocks, S-KAI, Hamburg-America Center and Coffee Plaza from its portfolio of HafenCity properties to Pembroke Real Estate in the 1st quarter, and Credit Suisse sold three Hamburg office blocks held in its Odin portfolio to Orion Capital Managers for a total price of around 2m. Comprising 13% of the total, hotel properties were the second most popular assets. These included the Height 3 development on the former Spiegel Island (Willy-Brandt- Strasse 23, City) that Hochtief sold to Commerz Real. Year on year, the premium returns for office and retail properties softened by a further.2 percentage points to 4.3 %. Premium returns for warehousing, logistics and industrial properties slipped from 7.2 to 6.5 %. of the total volume of transactions. In the first half of 2 the biggest single group of buyers were asset managers, who were involved in 31 % of the total volume. Open-end/ specialist funds took the second-highest share with % of the total. When it came to selling properties, the open-end/specialist funds were the vendors in 4 % of the volume sold. In view of the great demand and some big-ticket transactions still in the pipeline, the total volume traded by the end of 2 will be around 3.bn. Transaction volume Hamburg ca. 2.5bn Hamburg The early-year surge in the market for office space in Hamburg continued during the 2nd quarter of 2. Growth of 12 % compared with the same quarter of the prior year boosted total take-up for the first half of 2 to 1, m². In the first half of 2 six large agreements for more than 5, m² of space were concluded, most of them involving owner-occupiers. In the 1st quarter the City of Hamburg bought part of the former Axel-Springer complex to provide 32, m² of office space for Hamburg Mitte Borough Council (Caffamacherreihe 3, City). In the 2nd quarter the City signed another contract for a large amount of space. Some 2, m² of space in a new building project in City South (Nordkanal Strasse 22+24, City South) have been reserved for three district tax offices, Bergedorf, Oberalster and Wandsbek, and the tax office for large enterprises. Returning to their traditional places in the ranking of submarkets, the central districts of City, HafenCity and City South together accounted for 58 % of take-up of space in the 1st half of the year and some 41 % of all agreements signed. First-placed City was far ahead of the other submarkets, with 33 % of take-up (82,9 m²) and 33 % of all agreements. City South placed second with a share of 16 % (38,9 m²) and HafenCity was third with 9 % (23,6 m²). Year on year, the premium rent has fallen by a modest 5 cents to 24./m²/month. Compared with the prior year the weighted by floor space rose by a modest 3 cents to 14.6/m²/month ca. 488, m 2 Due to a high rate of take-up and a low level of completions, the vacancy rate fell to 5.5 %. This development reflects the current state of the market. It is not possible to satisfy demand for efficient office space with the rate of completions seen so far. This year and in the coming year, 216, office completions will total 419, m²; however, contracts with new occupiers already exist for some 57 % of this space. Many companies have already secured offices for themselves in projects that are still three years from completion. Dynamic market activity points to a good result for the year 2. Based on current activity, take-up of space is set to total more than 5, m² by the end of the year. City / 82,9 m² / 18.4 /m²/month City South / 38,9 m² / 11.1 /m²/month HafenCity / 23,6 m² / 19.4 /m²/month Take-up of space Hamburg Rents Hamburg 1. Council office Caffamacherreihe 3 / ca. 32, m² 2. Tax office Nordkanalstr / ca. 19,5 m² 3. NXP Semiconductors germany GmbH Stresemannallee 11 / ca. 8, m² (in s m 2, incl. owner-occupiers) (net in /m 2 /mth) premium rent National investors slightly scaled back their activities on the Hamburg market in the 1st half of 2 (from 56 % to about 47 %). Investors from the UK, Switzerland, the USA and Spain figured prominently, spending some 1.4bn to purchase properties in Hamburg. National investors dominated the selling side of the market, accounting for 59 %

6 MARKet Survey Investment/Office letting 2/Q1-2 BERLIN BERLIN In the 1st half of 2 a total of 3, m² of office space was taken up in Berlin. This good result is 1.7 % higher than in the prior year and lays the foundation for a very good overall result for 2. In the 1st half of 2 the rising take-up in Berlin resulted from a combination of numerous small lets and several agreements for large areas. The two contracts involving the greatest amount of space were the rental agreement for some 22, m² signed by Rocket Internet (Koch Strasse 22, GSW highrise, Berlin Mitte) and the lease taken by Mercedes Benz for some 18, m² (Postbahnhof district, Berlin-Friedrichshain). Moreover, the 1st half of 2 revealed that firms requiring large properties are increasingly prepared to move into B locations due to the scarcity of contiguous office space in the central city. Because the economy is still vibrant and very few buildings are being completed, the amount of property standing empty declined further. Year on year, vacancies fell from 98, m² to 87, m² at the end of the first half of 2. With the total stock of office space standing at 18.77m m², the vacancy rate at the end of the half year was 4.6 %. With Berlin s economy growing well, the take-up of office space will likewise continue to rise in the second half of the year. Ongoing expansion in the IT sector - in smaller as well as mid-sized enterprises - has now placed the industry ahead of public services as the biggest single group of potential new tenants. By the end of 2 the take-up of office space is set to be high, and similar to the 63, m² recorded for 214. The volume of investment transactions in Berlin had reached some 2.9bn by the end of the first half of 2. Year on year, investments rose by some 13 %. The total is thus already about three quarters of last year s final result of some 4.bn. PROPERTIES Office properties are still the preferred asset in Berlin, accounting for 44 % of the total ( 1.27bn). The biggest transactions involving offices were Global Asset Capital s sale of the Stettiner Carré office complex to Allianz Real Estate Germany GmbH for some 21m in the Mitte sub-market and the sale of the Viktoria Loft in Berlin-Lichtenberg, for which I-REIT Global paid Wealth Cap some 144m. The transaction volume for retail properties - whose share of the overall market comprised some 36 % ( 1.1bn) - was considerably higher than in the prior year, above all due to the biggest transaction seen in the 1st quarter, which was the sale of the Boulevard Berlin shopping centre on Steglitzer Schloss-Strasse, bought by the French operator Klépierre from a Dutch competitor, Corio, for around 37m. The premium return on office properties slid by.35 percentage points to 4.4 %, while the premium return for retail property assets dipped by.5 percentage points to 3.7 %. In the 1st half of 2 slightly more overseas than domestic players were active on the investment market in Berlin. Although international investors were the purchasers of some 55 % of the volume traded, they sold slightly more, namely around 58 % of the total. The biggest international investors were REITs, largely thanks to the sale of the massive Odin portfolio. When it came to international vendors, the project developers and specialist or open-end funds figured more prominently than others. The market is expected to make good progress during the rest of the year and close on a total of 6.bn of properties traded. The Berlin investment market is thus inching towards the record result of 6.4bn seen in 27, although the ongoing lack of suitable properties will continue to be a limiting factor. Transaction volume Berlin ca. 3.3bn Growing demand on the market is having an effect on office rents too. The is rising steadily and has increased by 11.5 % year on year to 14.3/m²/month. The premium rent remained stable at 22.5/m²/month because, despite the growing shortage, a sufficient choice of new-build properties is still available in the area around Berlin main station. Take-up of space Berlin ca. 578, m Mitte / 41, m² / 16.5 /m²/month Tiergarten /, m² / 14.7 /m²/month Charlottenburg / 23, m² / 14.4 /m²/month 1. Rocket Internet GSW highrise, Kochstr. 22 / ca. 22, m² 2. Mercedes Benz Postbahnhof development / ca. 18, m² 3. zalando Mühlenstr. 42 / ca. 13, m² Rents Berlin (in s m 2, incl. owner-occupiers) (net in /m 2 /mth) premium rent

7 MARKet Survey Investment/Office letting 2/Q1-2 Düsseldorf Following a slow start in the 1st quarter, the market for offices in Düsseldorf (figures do not include the surrounding communities of Hilden, Ratingen, Neuss and Erkrath) made a noticeable recovery in the 2nd quarter of 2. Whereas only about 64, m² of office space was let in the 1st quarter of 2, the figure for the 2nd quarter rebounded to some, m². Thus the result of 169, m² at the end of the first half year has already placed the overall figure of 238, m² for 214 within sight. By the end of the first half of 2 vacancies had fallen to 785, m². That meant an additional 64, m² of available office space compared with the same period last year. With a total stock of office space of 7.63m m² at the end of the first half of 2, the corresponding vacancy rate is 1.3 %. The volume of office building completions in 2 will again add only a modest amount of about 65, m². Scheduled completions in 216 total around 79, m². Düsseldorf By the end of the 1st half of 2 the volume of investment transactions in commercial properties in Düsseldorf totalled 712m. Despite the sale of a large portfolio at a price in the treble-digit millions, the total volume was some 4 % lower than in the same period the year before. Whereas transactions worth only 174m were noted in the 1st quarter of 2, the figure for the 2nd quarter was 538m. Following a quiet period caused by the increase in the land acquisition tax rate at the beginning of the year, the hoped-for catch-up phase in the 2nd quarter did not materialize. PROPERTIES Once again, office properties were investors preferred asset class. These contributed 42 % to the total volume of investment property transactions in Düsseldorf. Retail properties came next, with a share of about 32 % of the market. The largest transactions in the 1st half of 2 were the sale of the Kaufhof retail property portfolio (3 of the buildings are located in Düsseldorf) for about 2m, the Living Office building for around 51m and the K-LAN office block for about 45m. Year on year the premium return on office properties fell from 5.1 % to 4.5 % in the 1st half of 2. Returns on office buildings in Düsseldorf, state capital of North Rhine-Westphalia, are being squeezed due to an ongoing shortage of trophy and core properties in the city. The biggest groups of buyers and sellers may be deduced from the portfolio transaction already mentioned. On the buying side of the equation, the REITs lead with a share of more than 35 % of the total volume of transactions. On the selling side, therefore, one finds owner-occupiers and non-property companies with a share of around 5 %. Accounting for around 6 % of the market, overseas investors continued to be keen buyers of real estate. It is most unlikely that investment activity in Düsseldorf will make a repeat of the excellent result of 214 possible in 2. Spectacular transactions in 214 have set the bar extremely high. Although plenty of potential buyers are looking at Düsseldorf properties, there is simply a lack of big-ticket items selling for over 1m. The forecast for the whole of 2 has now been revised to 1.5bn. This would be in line with the 1-year average of about 1.5bn, which is still a respectable figure. Transaction volume Düsseldorf ca. 1.4bn Some 22 rental agreements were registered in the 2nd quarter of 2. These included the anticipated agreements for large amounts of space in the city that were still in the pipeline in the 1st quarter. However, most lets were properties measuring between 1, and 2,5 m². In this size category alone, the total area let came to over 51, m². As in the prior year, industrial and trading firms comprised the largest group of tenants. They accounted for some 32,6 m² of new take-up. Compared with the same period a year ago, the premium rent has fallen by 1.5 and now stands at 26./m²/ month. Year on year the had fallen 9 cents to 13.9/m²/month by the close of the first half of 2, a figure that was, however, 1. higher than the prior quarter s. Whereas in 214 a large amount of expensive space was let, for example in the Dreischeibenhaus and Kö- Bogen, there were no such developments on offer in the 1st half of Activity on Düsseldorf s office-letting market in the 1st half of 2 posted a clear message. It is barely conceivable that this year s total will dip beneath the low level of letting seen in 214. It is expected that take-up of space will total some 3, m² by the end of 2. Kennedydamm/DErendorf / 32,7 m² / 16.9 /m²/m. West Rhine/Seestern / 31,9 m² / 12.1 /m²/month Airport City/North / 3,3 m² / 13.6 /m²/month 1. L Oréal Roßstr./Johannstr. / ca. 16,7 m² 2. Rheinbahn Immobilien Lierenfelder Str. 4 / ca. 11, m² 3. T-Systems Heerdter Lohweg 35 / ca. 5,6 m² Take-up of space Düsseldorf Rents Düsseldorf (in s m 2, incl. owner-occupiers) (net in /m 2 /mth) premium rent 35 ca. 36, m

8 MARKet Survey Investment/Office letting 2/Q1-2 COLOGNE In the 1st half of 2 investment transactions in commercial properties in Cologne totalled some 5m - a high level when compared with long-term figures for this city. Two especially large transactions, each involving a price in the treble-digit millions, made a significant contribution to this total. The high demand for properties remains unabated and sales were made in all segments. PROPERTIES The largest transaction concerned the Barthonia Forum (Venloer Strasse 3, Ehrenfeld), sold by an Israeli investor to a joint venture comprised of Tristan Capital Partners (investment managers) and the FREO Group (private equity company/fund managers). The purchase price was around 11m. This 7, m² piece of real estate, formerly the site of the Mühlens perfume factory, comprises 12 buildings which form an urban neighbourhood of offices, shops and apartments. The second-biggest transaction in the 1st half year was the sale to Art-Invest Real Estate of the Cologne Keys office complex on Kaiser-Wilhlem-Ring. This developer bought the property from an international investment manager and is planning to re-develop parts of the site. Since the beginning of the year premium returns have continued to slide down. In the first half of 2 the premium return on office blocks was 4.6 %, on retail properties 3.9 % and on logistics building 6.3 %. In the first half of the year deep-pocketed overseas investors figured both as buyers and sellers of investment properties. Their share of the transaction volume, relative to all investor groups, was around 72 %. The entire spectrum of investors plays an active part on the Cologne real estate markets. Thanks to recent big-ticket purchases, project developers figured especially prominently as buyers of real estate, accounting for 35 % of the total volume of transactions. Due to great demand for properties and easy borrowing terms, 2 is expected to return a final total for commercial property investments that is very similar to or higher than the prior year s figure (about 1.2bn). It is possible that premium returns will fall. Transaction volume Cologne ca..93bn COLOGNE In the first half of 2 some 135, m² of office space was taken up in Cologne. Year-on-year, this represents a rise of 8 %. The largest amount of space relates to the new building under construction in Longerich for the HR department of the Bundeswehr (German army). The building will have a total floor area of 11, m². Next on the list is an 8, m² property in the financial district let to the Information Processing Office of Cologne City. Compared with prior years, the financial district was an especially vibrant sub-market in the first half of 2, posting take-up of some 17, m². Rents did not change in the 1st half year, with premium rates remaining at 21./m²/month and s at 11.9/m²/month. There is little new building activity in the core locations and it is thus less likely that leases for expensive properties will be brokered. However, some developers and owners of existing buildings are now stepping up their efforts to put top quality properties onto the letting market. Some 67, m² of space in 13 projects will be completed in Cologne in 2. About half of this amount will be occupied by the owners and is thus not available on the open market. Some especially versatile projects are being developed in the Ehrenfeld sub-market. Only a few of the construction projects are in the inner city. In 216 around 1, m² of office space will be completed Jahres-Mittel (21-214): ca. 279, m At the end of the first half of 2 the total stock of office space in Cologne was 7.7m m², of which 49, m² was available for let. This translates into a vacancy rate for the 1st half of 2 of 6.4 %. Compared with the prior year, vacancies had fallen by 1 % of the available space. At present the general condition of the market for Cologne offices is encouraging for firms looking for new offices or pondering which location is right. Overall, a total letting volume of 28, m² is expected for the year. That is around 2, m² more than in 214. If the insurance company Zürich Versicherung makes a final decision about its plans to rent up to 6, m² of space before the end of 2, this mark could be exceeded quite considerably. It is likely that more of the empty space will be let, leading to a vacancy rate of some 6 % by the end of 2. Downtown North / 24. m² / 14, /m²/monat financial district / 17. m² / 13,4 /m²/monat North / 12. m² / 9,8 /m²/monat Take-up of space Cologne Rents Cologne 1. HR department of the Bundeswehr Militärringstr. 1 / ca. 11. m² 2. Information Processing Office of Cologne City Enggasse 2 / ca. 8. m² 3. JobCenter Köln Oskar-Jäger-Str. 5 / ca. 7.6 m² (in s m 2, incl. owner-occupiers) (net in /m 2 /mth) premium rent , 21, 21, 21, 21, 21, 1, ,2 11, ,9 11,9 11, Data: Greif & Contzen Immobilien GmbH Data: Greif & Contzen Immobilien GmbH

9 MARKet Survey Investment/Office letting 2/Q1-2 Frankfurt Following 214 s record result on the Frankfurt market for investment in commercial properties, the volume of transactions in the first half of 2 was some 2.75bn and thus more than twice as much as in the same period of 214. PROPERTIES The exceptional half-year result is mainly due to three huge transactions that together total more then 1.2bn. The largest of these was the sale of the Trianon (Mainzer Landstr. 16), for which NorthStar Realty Finance paid Madison International Realty 54m in the 2nd quarter. The second-biggest transaction - likewise in the 2nd quarter - was conducted by RFR Holding which sold its majority stake in the Eurotower (Kaiser Strasse 29) to a German pension fund for about 45m. In the 1st quarter Tishman Speyer sold the MainZero (Mainzer Landstr ) to the South Korean National Pension Service (NPS) for some m. In the first half year demand for real estate investments was concentrated on properties within the CBD, with the exception of some properties in other sub-markets (e.g. the Main Triangel in Frankfurt South, sold by the Aareal Bank to WCM, or the Main Airport Center (MAC) sold by the Royal Bank of Scotland to an investment fund from the USA). Considerable activity was registered in Niederrad, mostly due to developers buying office properties with the intention of converting them into apartment blocks. Year on year the premium return on office properties softened by. percentage points to 4.6 %. Retail properties in High Street locations attained returns of 4.5 %. International investors were very active in Frankfurt; they were the buyers in 6 % of total transactions and vendors in 72 % of the volume traded. The three largest properties were all sold by international investors and two of the three were bought by international investors. Only the Eurotower was bought by a domestic investor, a German pension fund. The business-friendly market environment suggests that in 2 it will be possible to repeat the record result of 214, which closed at 5.bn. Transaction volume Frankfurt ca. 3.2bn Frankfurt By the end of the first half of 2, 177,7 m² of office space had been let in Frankfurt (including Eschborn and Offenbach Kaiserlei). This translates into 6.4 % higher take-up than in the same period the year before. Most of the newly occupied space was in the mid-size range (2,1 to 5, m²). The largest agreement concluded in the first half year was the purchase of a 32, m² office block in the main station/westhafen sub-market; the new owner of the building, formerly the head office of Dresdner Bank, is financial consultancy Deutsche Vermögensberatung. The CBD (financial district, Westend, City) accounted for far less of the take-up of space than it did a year ago, because the larger agreements involved properties in the submarkets further from the centre. These included the second-biggest contract, a lease for 5,7 m² of office space at Düsseldorfer Strasse 38 (Eschborn), signed in the 2nd quarter by a company called Management Circle. A disproportionately large number of tenants decided to rent space in new building developments or in properties still under construction due to the shortage of available space in older buildings. Examples of this practice include the rental agreement signed by law firm Milbank in the ma ro (opera district) or the contract signed by Grifols, a biotech company, for space in Colmarer Strasse (Niederrad). This growing trend is encouraging more property owners to build on speculation. The rental agreements signed for space in prestigious buildings such as the Taunusturm and the Opernturm ca. 449, m caused an increase in both the premium and s for offices in Frankfurt. Year on year the premium office rent climbed 5 cents to 38.5/m²/month. Within the space of a year the rose too, increasing by 1. to 2./m²/month. Brisk demand reduced vacancies by 1.7 % by the end of the first half of 2, bringing the rate to a record low of 11.8 %. A very low volume of completions is expected in 2-11, m² in 17 projects. The projected volume for 216 is slightly higher at some 142, m² ( projects). Unwavering demand for offices in Frankfurt indicates that by the end of the year 2 take-up of space will reach a total of 4, m². Main Station / WestHafen / 46,8 m² / 14.5 /m²/m. City / 31,6 m² / 2.6 /m²/month financial district / 29,7 m² / 31.5 /m²/month Take-up of space Frankfurt Rents Frankfurt 1. Deutsche Vermögensberatung (DVAG) Windmühlstr. 14 / ca. 32, m² 2. Management Circle Düsseldorfer Str. 38, Eschborn / ca. 5,7 m² 3. tax office Stephanstr. / ca. 5, m² (in s m 2, incl. owner-occupiers) (net in /m 2 /mth) premium rent Data: Colliers International Deutschland Data: Colliers International Deutschland 17

10 MARKet Survey Investment/Office letting 2/Q1-2 Stuttgart Take-up of office space in Stuttgart was some 147, m² by the end of the 1st half of 2 and thus.6 % higher than in the same period a year ago. Owner-occupiers featured prominently in the take-up figures for the 1st half of 2, accounting for some 45,5 m² of office space. of available office space, particularly in Stuttgart City and Inner City. The volume of completions for 2 is around 119, m², of which some 8 % is pre-let. In 216 some 129, m² of offices will be completed, but 9 % of the space has already been taken. Stuttgart Some 59m were invested in Stuttgart real estate during the 1st half of 2. This figure was 4m higher than in the 1st half of 214. As forecast in the 1st quarter of 2, a large proportion of the transactions in the 2nd quarter were in the tens of millions. PROPERTIES Altogether, 35 transactions were completed in the first half of 2, about half of which were priced in the single-digit millions. The largest transaction involved the Zeppelin Carré (Kronenstr. 2) sold by Goldman Sachs to an open-end Deka fund at a price in the treble-digit millions. The focus of investment activity - partly as a result of the sale of the Zeppelin Carré - lay on office properties, which accounted for around 6 % of the total volume of transactions. Retail properties were the second most traded class of asset, taking a 26 % share of the total. A combination of short supply of properties and continuing strong demand for investment products has appreciably depressed the premium return on office properties in Stuttgart from 5. to 4.5 %. In the 1st half of the year open-end funds and specialist funds were the most active buyers on the Stuttgart market with a 54 % share of the volume of transactions, followed by investment-hungry private investors and family offices with about 11 % of the market. Opportunity and equity funds dominated the selling side of the market, accounting for about 36 % of the transaction volume, followed by open-end and specialist funds with 2 % and project developers and builders with around %. Foreign investors were involved in slightly less than a third of the commercial property investments traded in Stuttgart in the 1st half year. The excellent 2nd quarter of 2 more than compensated for a fairly weak 1st quarter. It may be assumed that by the end of 2 the volume of properties traded on the Stuttgart investment market will total more than 1.bn. Transaction volume Stuttgart ca..8bn Construction work to create an IT campus for Robert Bosch GmbH in the northern sub-market Feuerbach added some 3, m² to the total. This contract was the biggest owner-occupier project in the 1st half of the year. The largest rental agreement was that signed by Celesio AG for 1,5 m² of space in the Europe Plaza, a new building project in Stuttgart city centre. 16 rental agreements were concluded, slightly below the figure for the 1st half of 214. Overall, around 5 % of the take-up of space (73,5 m²) was attributable to six contracts for premises larger than 5, m². In the size category of 5 m² or less, total lettings came to 28, m². Stuttgart City proved to be the most popular sub-market, where 43,3 m² of space was taken up, followed by Feuerbach on the northern outskirts of Stuttgart, where take-up totalled 36,4 m². Demand for office space was strongest among industrial firms, who collectively accounted for some 58, m² of take-up. The premium rent remained stable at 21./m²/month. The rose to 13.1/m²/month, thanks to numerous lets in new-build properties. Year on year the vacancy rate fell by.4 percentage points to its current level of 3.8 %. There is now a shorter supply ca. 242, m The upwards trend in demand seen last year has continued into this year. In view of an above-average result for the first half year and unabated demand, total take-up of office space for the year will probably be between 23, and, m². City / 43,3 m² /.5 /m²/month Feuerbach / 36,4 m² / 11.8 /m²/month Vaihingen/Möhringen /,1 m² / 1. /m²/month Take-up of space Stuttgart Rents Stuttgart 1. Robert Bosch GmbH Bosch IT Campus, Stuttgart Feuerbach / ca. 3, m² 2. Celesio AG Europe Plaza, A 1 Areal S-City / ca. 1,5 m² 3. Hansa Stuttgart Möhringen / ca. 9,5 m² (in s m 2, incl. owner-occupiers) (net in /m 2 /mth) premium rent

11 MARKet Survey Investment/Office letting 2/Q1-2 MUNICH Some big-ticket transactions are partly responsible for the Munich market s very high volume of investment trades in commercial real estate during the first six months of 2. Six transactions were well within the triple-digit millions range and contributed about 1.bn to the total volume traded. The result for the half year was around 2.9bn, a year on year increase of 67 %. PROPERTIES Office properties were the most-traded assets on the Munich investment market, where they made up 8 % of the total volume. Two of the six biggest real estate transactions each involved more than 22m. One property was the Elisenhof commercial centre (Elisenstr. 3) sold by Tishman Speyer to AXA Real Estate; the other was the north88 office block that the project developer Hammer and the investor Competo Capital Partners sold to the open-end OPCI funds managed by French investment firm Amundi. Over the course of the 1st half year the premium return on office properties softened by a further. percentage points to 3.75 %. Growing demand for value add opportunities - driven by the lack of core products available - has already resulted in declining returns in this sector too. National and international investors accounted for almost equal shares of the volume of commercial properties traded in the half year. Most of the non-german players in the first two quarters came from France, largely due to the transaction involving Amundi, followed by American investors. The largest single group of buyers, accounting for some 6 % of the total transaction volume, were the open-end/specialist/pension funds. Although the Munich investment market for commercial properties returned a brilliant result in 1st half of 2, big transactions still in the pipeline will lead to brisk trading in the 2nd half year too. Therefore, the forecast total volume of transactions for the year is 5.5bn, which would be a further 1 % higher than the figure for 214. Transaction volume Munich ca. 3.5bn MUNICH In the 1st half of 2 take-up of office space in Munich totalled 298, m². Year on year, the take-up fell by 8 %. The 2nd quarter was slightly weaker than the first, but it is nevertheless expected that, with steady demand for space, the final result for the year will be average. With only three agreements for more than 1, m² of space, this year s target has not yet been met. Further leases for more than 1, m² are expected to be signed by the end of the year. The size category between 1,1 and 3, m² was as popular as ever, contributing 29 % to the total take-up figures (about 86, m²). The biggest agreement in the 1st half year was the construction start of the new Technology Centre II for the electronics group Rohde & Schwarz, to provide, m² near Ostbahnhof railway station. The second-biggest agreement was concluded with Steelcase, a manufacturer of office furniture, which has rented 11,4 m² of space in the Brienner Forum (Brienner Strasse). Third among the largest contracts was that signed by Munich Government to extend its offices by 1, m² on Landsberger Strasse. In the first half year Centre West was the busiest sub-market, accounting for 19 % of the total take-up of space, followed by City North with 16 % and Centre, likewise with 16 %. Consultancies and lawyers led the ranks of businesses seeking office space, accounting for 12 % of take-up. The IT sector was hard on their heels, with a share of just under 12 %, followed by the media and publishing industry with 11 % ca. 67, m In the 1st half year, because there was only one let in the 5, m² plus size category at the top end of the market, the premium rent fell to 32.9/m²/month, about 4 % below the prior year s rate. The was also lower, falling by 1.9 % to.5/m²/month during the half year. The volume of empty space has fallen by 24.5 % to about 1,132, m². With the total stock of office space standing at 22.9m m², the vacancy rate was 4.9 % or 1.6 percentage points lower than a year ago. Steady demand is likely to produce an overall take-up result for 2 of 6, m² of office space. Vacancies will continue to fall. Downtown West / 56,7 m² /.88 /m²/month City North / 48,4 m² /.3 /m²/month Downtown / 46,4 m² /.84 /m²/month Take-up of space Munich Rents Munich 1. Rhode & Schwarz Mühldorfstr. / ca., m² 2. Steelcase Germany Brienner Forum, Brienner Str. / ca. 11,4 m² 3. Munich government Landsberger Str. / ca. 1, m² (in s m 2, incl. owner-occupiers) (net in /m 2 /mth) premium rent

12 Lokale Local Expertise Kompetenz Across deutschlandweit Germany MARKet Survey Investment/Office letting 2/Q1-2 GLOSSARy german property partners Services german property partners Take-up of space Take-up of space is the total of all space let plus that sold to, or finished by or for an owner-occupier during the period under review. The operative date for inclusion in the statistic is the date on which the lease or purchase agreement was signed. Lease renewals are not counted as take-up. Areas are stated on the basis of the guide for calculating the rental area in commercial leases (MF/G). Premium rent The premium rent relates to the top 3 % of the market for new lets (not counting owner-occupiers) during the 12 months just ended and is stated as the average of such rents. Average rent The is calculated by taking the individual rents agreed in all leases signed over the past 12 months, weighting them by the amount of space rented and computing the mean value. Figures refer to nominal net rents ex services. Vacancies Vacancies include all office space that is available to new tenants within three months. Sub-let space is counted as vacancy. Transaction volume The transaction volume is the sum of the purchase prices of all transactions during the period under review inasmuch as these are known to and recorded by the market. The closing date of the transaction determines at which point it is included in the statistics. A property is allocated to an asset class according to the predominant way space is used at the time of closing. Commercial transactions involving investment in residential properties are not included in the transaction volume. Premium returns The premium return is the (gross) initial return on excellently appointed top quality properties in the very best locations of the specific property market. We draw your attention to the fact that all statements made here are non-binding. Most of the information is based on third-party reports. The sole intention of this market survey is to provide general information for our clients. Grossmann & Berger GmbH Immobiliendienstleister Bleichenbrücke 9 (Bleichenhof) D-2354 Hamburg Tel.: +49 ()4 / Fax: +49 ()4 / info@grossmann-berger.de Managing directors: Holger Michaelis, Andreas Rehberg, Lars Seidel, Axel Steinbrinker Chairman of the Supervisory Board: Dr. Jörg Wildgruber Entered in the commercial register: Hamburg B 866 Supervisory authority: Borough Council Hamburg-Mitte, Department of Consumer Protection, Commerce and the Environment, Klosterwall 2, 295 Hamburg VAT identification number pursuant to Section 27a German Turnover Tax law: DE Naturally enough, when doing real estate business in Germany, you would like to work with a partner who can provide you with expert professional support in all issues relating to commercial property. Our spectrum of services covers both real estate investments and commercial letting. We are conversant with all risk classes and types of property. For investors we offer a Germany-wide service extending to the purchase and sale of office, hotel, warehousing, logistics and retail real estate, as well as apartment buildings, both as individual properties or in portfolios. We are also ready to support you with preparation for development projects. Due to the banking background of our founding partners, we are familiar with the workings of the financial industry. We are also well placed to assist you in your search for office, retail, industrial, warehousing and logistics premises, as well as special uses, in the process bringing to bear our in-depth local knowledge and outstanding regional contacts. Across Germany» Hamburg» Berlin» Düsseldorf» Cologne» Frankfurt a.m.» Stuttgart» Munich In addition, we offer you corporate real estate management (CREM), as well as research tailored to your specific project. Further services in the fields of finance, fund management, asset management and administration mean that you can obtain everything needed from us to secure the effective long-term advancement of your project. Services» Real estate investments» Commercial letting» Corporate real estate management» Research» Banking and financial services» Equity financing for development projects» Fund and asset-management» Real estate management BANKHAUS ELLWANGER & GEIGER KG Börsenplatz 1 D-7174 Stuttgart Postfach Stuttgart Tel.: +49 ()711 / Fax: +49 ()711 / gewerbeimmobilien@ellwanger-geiger.de Personally liable partners: Dr. Volker Gerstenmaier, Mario Caroli Competent supervisory authority: BaFin, Federal Regulator for the Financial Services Sector, Graurheindorfer Strasse 18, Bonn Commercial register and no. of entry: Amtsgericht Stuttgart, HRA 738 Licensing authority: Licence pursuant to Section 34c, par.1 of the German Industrial Code/ GewO (general brokers) is included in the licence pursuant to Section 32 par. 1 of the German Banking Act (KWG), Section 34c par. 5 no. 2 GewO Responsible pursuant to Section 55 par. 2 Interstate Broadcasting Agreement RStV: Mario Caroli, personally liable partner Dr. Volker Gerstenmaier, personally liable partner VAT identification number pursuant to Section 27a German Turnover Tax law: DE ANTEON Immobilien GmbH & Co. KG Ernst-Schneider-Platz 1 D-4212 Düsseldorf Tel.: +49 ()211 / Fax: +49 ()211 / immobilien@anteon.de VAT identification number pursuant to article 27a German Turnover Tax law: DE94652 Trading licence: a licence pursuant to Section 34 c of the German Industrial Code/GewO was granted with no restrictions by the Municipal Government of the State Capital Düsseldorf, Department 32, Tel.: +49 ()211 / ANTEON Immobilien GmbH & Co. KG Registered office in Düsseldorf, entered in the Commercial Register of Düsseldorf under HRA General Partner ANTEON Verwaltungsgesellschaft mbh, registered office in Düsseldorf, entered in the Commercial Register of Düsseldorf under HRB Managing partners: Guido Nabben, Heiko Piekarski, Jens Reich, Dirk Schäfer, Marius Varro 22 23