Office and Investment Markets an overview

Transcription

1 CITY SURVEY Germany Mid-year report 217 Accelerating success. Office and Investment Markets an overview

2 Matthias Leube Chief Executive Officer Results on the office leasing and commercial investment markets hint at record year Based on activity in Germany s major real estate hubs in H1 217, we can expect an above-average annual result in office leasing as well as commercial real estate investment. The German investment market recorded the strongest H1 result we have seen in the past ten years with transaction volume just shy of 26bn. Germany s BIG 7 office leasing markets set a new H1 record with take-up of 1. million sqm. Robust macro-economic fundamentals are driving this strong boom phase. Four years of continuous economic growth and GDP forecasts of roughly 2% for another two years are reason enough for tenants and investors alike to look to Germany for stable business investments. Other market-shaping factors persist as well, particularly the current low-interest environment. A considerable number of supranational mega-portfolios signed in H1 217 significantly boosted investment activity. The scope of these deals clearly reflects current pressure to invest, which has been on a steep incline over the past several years, and the amount of capital currently in circulation on a global scale. Even in light of these developments, investors will continue to view Germany as a harbor of stability amidst global geopolitical and economic risk. Market size and the variety of assets available continue to draw investors to the German real estate market. The impact of Germany s currently strong landlord/seller markets can be felt in the growing scarcity of assets as well as price hikes. With general conditions on the leasing markets still favorable, investors have generally been accepting steeper prices. Investor willingness to participate in extensive bidding processes, however, has begun to dwindle, with investors increasingly looking for reasonable opportunities to purchase real estate. Our job at Colliers International Deutschland is to effectively clarify each investment opportunity in terms of location, property quality, tenant covenant and upside potential so that we can position assets on the market at the prices owners are looking to achieve. With this market overview, we hope to provide you with a valuable tool. 2

3 Contents Survey of the market data Location Information 4 Office Leasing 4 Investment 5 Germany on the whole Berlin Office Leasing 6 Investment Office Leasing 1 Investment 12 Düsseldorf Office Leasing 14 Investment 16 Frankfurt Office Leasing 1 Investment 2 Hamburg Office Leasing 22 Investment 24 Cologne Office Leasing 26 Investment 2 Munich Office Leasing 3 Investment 32 Stuttgart Office Leasing 34 Investment 36 Glossary / Definitions 3 Locations / Contacts 39 3

4 Location Information GERMANY BERLIN DÜSSELDORF FRANKFURT HAMBURG COLOGNE MUNICH STUTTGART POPULATION in 1, 2, 3, ,61 1,2 1, GEOGRAPHIC AREA in km² 357, EMPLOYEES PAYING SOCIAL SECURITY 31,49 1, CONTRIBUTIONS in 1, UNEMPLOYMENT RATE in % PER CAPITA DISPOSABLE INCOME in 22,563 2,2 27,137 25,553 24,241 24,37 2,757 25,634 Sources: Federal Statistical Office, Land Statistical Offices, Federal Employment Agency, Nexiga GmbH Office Leasing STOCK OF OFFICE SPACE in million m² OFFICE SPACE TAKE-UP 1st HY 217 in m² TOP 7 BERLIN DÜSSELDORF FRANKFURT HAMBURG COLOGNE MUNICH STUTTGART ,42,6 437, 19, 245, 27, 151, 416,5 116,1 FORECAST for the entire 217 OFFICE SPACE TAKE-UP 1,679,5 347, 24,3 211, 23, 192, 37,4 17, 1st HY 216 in m² OFFICE SPACE TAKE-UP 3,136,7 62, 331, 462,6 55,13 261, 73,5 244,7 (for the entire year) 1-year Ø TAKE-UP BY SIZE in m² up to 5 m² 292,9 53, 46,1 51, 34,2 22,1 67,6 17,3 51-1, m² 274,2 51, 27, 36,9 47,5 19,5 74,5 17, 1,1-2, m² 2,6 54,3 26,5 2,2 66,9 22,5 6,5 21,7 2,1-5, m² 354,6 92,9 31,2 5,5 6,9 2, 79, 4,1 over 5,1 m² 632,3 14,2 59,2 69,6 77,5 5,9 126,9 56, PRIME RENT in /m² FORECAST for the entire 217 AVERAGE RENT in /m² FORECAST for the entire 217 VACANT OFFICE SPACE in m² 4,1,4 513, 521,1 1,237, 65, 375, 57,4 26,1 FORECAST for the entire 217 VACANCY RATE in % SECTORS WITH HIGHEST TAKE-UP in % Information and telecommunications 16 Public administration, organi zations, welfare agencies 2 Banking and Finance 1 Consulting firms 21 Consulting firms 2 Public administration, organi zations, welfare agencies 19 Information and telecommunications The data for Berlin, Düsseldorf, Hamburg, Frankfurt, Cologne and Stuttgart are related to the respective city area. The data for Munich are related to each of the respective markets on the whole. 24 Manufacturing industry 6 4

5 Investment GERMANY TOP 7 BERLIN DÜSSELDORF FRANKFURT HAMBURG COLOGNE MUNICH STUTTGART TRANSACTION VOLUME 25,96 1,69 3, ,117 1,251 2, st HY 217 in million FORECAST for the entire 217 TRANSACTION VOLUME 17,3 9,217 2, ,692 1,91 3 1, st HY 216 in million TRANSACTION VOLUME 33,667 1,511 4,4 1,53 3,792 2,912 1,11 4,13 99 (for the entire year) 1-year Ø FOREIGN INVESTORS in % LARGEST GROUP OF BUYERS in % Open-ended real estate funds / Special funds Asset managers / Fund managers Asset managers / Fund managers Asset managers / Fund managers Asset managers / Fund managers Open-ended real estate funds / Special funds Listed property companies Open-ended real estate funds / Special funds Asset managers / Fund managers LARGEST GROUP Asset Property Property Opportunity Open-ended Opportunity Property Property Opportunity OF SELLERS in % managers / Fund developers developers Fonds / Private Equity real estate funds / Fonds / Private Equity developers developers Fonds / Private Equity managers Fonds Special funds Fonds Fonds MOST IMPORTANT TYPE OF Office Office Office Office Office Office Office Office Office PROPERTY in % PRIME YIELD, OFFICES in % PRIME YIELD, RETAIL in % PRIME YIELD, INDUSTRIAL & LOGISTICS in % 4.9 * Refers to the defined logistics market areas 5

6 Fast Facts OFFICE LEASING TOP 7 1st HY 217 1st HY 216 CHANGE Office Space Take-up 1,42,6 1,679,5 9.7% in m² Vacant Floor Space 4,1,4 4,729, -13.7% in m² Vacancy Rate in % * Office Space Stock in m² 9,221,7 9,4,.9% Office Leasing Take-up The strong upward trend on the office leasing markets in Germany s Big 7 continued throughout H Leases were signed for around 1. million sqm during the first six months of the year, up 1% from H1 216 s all-time high. This upward trend is all the more impressive considering the fact that only large-scale leases for more than 1, sqm were signed in Q2, three of which were signed in the segment of 2, sqm and up. This demonstrates the lively leasing activity we are seeing across all space segments throughout German cities. Take-up of Space in m² Vacancy Rate in % Prime Office Rent in /m² Commercial Transaction Volume in millions of euros Gross Prime Yield for Office Pro perties in % Düsseldorf 1st HY 217 1st HY 216 CHANGE 19, 24,3-7.% * % % * Hamburg 1st HY 217 1st HY 216 CHANGE 27, 23, 24. % * % 1,251 1, % * Berlin 1st HY 217 1st HY 216 CHANGE 437, 347, 25.9 % * % 3,17 2, % * Cologne 1st HY 217 1st HY 216 CHANGE 151, 192, % * % % * Frankfurt 1st HY 217 1st HY 216 CHANGE 245, 211, 16.1 % * % 2,117 1, % * Stuttgart 1st HY 217 1st HY 216 CHANGE 116,1 17, 7.7 % * % % * Munich 1st HY 217 1st HY 216 CHANGE 416,5 37,4 7.5 % * % 2,243 1, % * *) change in percentage points 6

7 Berlin once again led the ranks with an exceptional take-up result of 437, sqm, up 29% yoy. Munich came in a close second with 417, sqm. Hamburg and Frankfurt kept pace, with Hamburg posting 27, sqm in total take-up at mid-year, up 25% yoy. Frankfurt generated 245, sqm in take-up in H1, (+16% yoy), despite the absence of large-scale leases otherwise typical to the city. Take-up of Space in the Top 7 (in million m 2 ) In contrast, Germany s two office hubs along the Rhine River saw a yoy decrease in take-up. Düsseldorf recorded total takeup of 19, sqm, reflecting a slight decrease of 7% yoy. Cologne saw a much more considerable drop of 21% (151, sqm) compared to last year s results, which were driven by the Zurich deal. Stuttgart s unremarkable mid-year result of 116, sqm can be attributed to a scarcity of modern office space primed to meet tenant demands st Half-year Whole year Forecast for the entire 217 Average of the past 1 years Rents Rent trends, particularly in average rents, clearly reflect shortage of supply. Average rents in Berlin and Stuttgart are currently at an all-time high of 17. per sqm (+1%) and per sqm (+%), respectively. Other markets such as Düsseldorf ( 15.4, +3%) and Munich ( 16.5, +2%) experienced a more moderate increase due to a shift towards peripheral submarkets and the city outskirts, with Frankfurt even experiencing a slightly negative trend ( 1., -1%). In terms of average rent and with prime rent at 37.5, Frankfurt remains the top location in Germany, followed by Munich ( 35.5) and Berlin ( 29.2). The German capital once again recorded the highest increase in rent yoy at 15%. Düsseldorf ( 26.5) and Hamburg ( 26.) came in mid-field followed by Stuttgart ( 24.) and Cologne ( 21.). Supply and Vacancy With demand continuing to increase and just under 3 million sqm of new-built space scheduled for completion in the BIG 7 within the next three years, supply is dwindling rapidly. Only 4.1 million sqm are currently available for immediate tenancy, reflecting a vacancy rate of 4.5%. Similar to top locations Berlin and Munich, Stuttgart is currently posting vacancy rates of far below 3%. The Munich market is currently under the most strain with vacancy rates at 2.5%. The situation in Germany s other major cities is slightly less tight despite a considerable drop in vacancy. The vacancy rate is either just below (Hamburg, Cologne) or well above the 5% mark (Düsseldorf 6.9%, Frankfurt 1.%). Summary and Outlook Completions of Office Properties in the Top 6 cities in total (in 1, m 2 ) Completions Pre-let , Average Vacancy Rate in the Top 7 (in %) and Vacancy (in million m 2 ) % % % % % 1st HY 217 Due to the strong start to the year, we except year-end take-up results of at least 3.5 million sqm, in particular in light of ongoing high demand. Employment rates will remain the driving force behind future leasing activity. 7

8 Fast Facts INVESTMENT Transaction Volume in million TYPE OF TRANSACTION 1st HY 217 1st HY 216 CHANGE 25,96 17,3 45.2% 1st HY 217 1st HY 216 CHANGE Individual Transactions 15,612 12, % Share in the Top 7 9,335 7, % Portfolio Transactions 1,24 5, % Share in the Top 7 1,534 1, % Total Germany 25,96 17,3 45.2% Total in the Top 7 1,69 9, % SOURCE OF CAPITAL 1st HY 217 1st HY 216 CHANGE Share by International 11,953 6, % Buyers Share in the Top 7 5,3 3, % Share by International 13,943 5, % Sellers Share in the Top 7 5,41 2, % Transaction Volume in Germany (in billion ) st HY Transaction Volume in Germany Share in the Top 7 Forecast for the entire Forecast for the entire 217 Transaction Volume according to size categories in Germany (share in %) above 25m up to 1m 13 1m to 25m Investment Transaction Volume A total of 25.9bn was poured into German commercial assets in H1 217, reflecting a yoy increase of roughly 45% and almost matching 27 s record results. Three portfolio deals, which changed hands for 7m and up, had a particularly strong impact on market activity in the first six months of the year. The largest deal was a portfolio sold by Blackstone subsidiary and logistics platform Logicor to China Investment Corporation for 2bn. Similar to the Ikea Homepark deal and the Hansteen logistics portfolio, the year s second-largest deal to date, which changed hands in Q1 for around 1bn, this transaction involved the German assets in a multinational portfolio. Opportunities such as these are often the only chance investors have to get their foot in the door on investments in the billion-euro range. Buyer and Seller Groups The German commercial market saw an increased influx of foreign capital with German investor activity remaining strong as well. Transaction volume from deals involving foreign investors almost doubled yoy to 12bn, reflecting a 46% share in total transaction volume. German investors, who dominated the market in 216, remained active as well, increasing their share in transaction volume by 2% to 14bn, a 54% market share. Two nationalities are clearly recognizable among the investors currently active on the German market, partially due to their involvement in the megadeals mentioned above. Chinese and US investors accounted for well over 2bn each, with opportunity funds such as Blackstone taking advantage of the limited opportunity to tap upside potential shortly before the market tops out. An excellent example can be seen in Blackstone s decision to resell several assets to alstria that it acquired in its purchase of the OfficeFirst portfolio in December. Asset/fund managers (26%) and property developers (19%) continued to dominate the market sell side and remain the main beneficiaries of the shortage of supply in the popular core and core+ segments. Open-ended real estate funds and special funds (33%) were most active buy side, benefiting from strong cash inflow primarily stemming from small, private investors, despite a temporary freeze on new contributions m to 5m 1m to 25m m to 1m

9 Investment Assets Portfolios changed hands in the first 6 months of 217 for a total of 1.3bn, or a 4% share, doubling the transaction volume generated by this investment class yoy. Looking at market segment trends, logistics assets have become increasingly popular. With a market share of 21% ( 5.4bn), logistics assets have moved among to join the ranks of retail, the second-largest asset class ( 5.7bn, or 22%) for the first time. Office assets continue to hold pole position ( 1.3bn, or 4%). In terms of location, investments outside the BIG 7 have continued to gain in importance since the beginning of the year. These locations currently account for 5% of investment volume, deviating from the long-term average of below 5%. Trends in the BIG 7 Berlin is the undisputed investor favorite among the BIG 7 and remains the site of high-volume single investments. The German capital is the first investment location to exceed the 3bn threshold during an H1 period. Deals being currently traded on the market promise another above-average year. Munich achieved a transaction volume of 2.2bn, a yoy increase of 21%. Frankfurt posted a similar result with 2.1bn (+25%), relegating Hamburg to 4th place with 1.3bn. Cologne managed to attain the highest yoy increase with 132%. The m transacted in Cologne were mainly generated by two major deals in Q1 217 (Kaufhof headquarters, Gerling/ Friesenquartier). Düsseldorf ( 75m) and Stuttgart with ( 611m) followed in the ranks. On the whole, all seven investment hubs managed to achieve results significantly above the ten-year-average. Investors are still willing to pay increasingly higher purchase prices, as can be seen in the prime yields for office assets in some BIG 7 markets. Even in Frankfurt, yields are now below 4%. One prime property even changed hands at 3x annual rent. As a result of high rent increases, property owners in Berlin have also been asking higher prices and the city has reached a new record low yield of 3.25%, as has Munich. Yield compression is even more dramatic in other real estate segments such as logistics where the 5% threshold has been breached as well. Investor willingness to participate in extensive bidding processes, however, appears to have begun to dwindle. Summary and Outlook The German investment market is currently still experiencing a strong upside cycle. Even in the absence of a sensational end-of-the-year spurt like we saw in Q4 216, we can expect a similarly high annual result with a transaction volume of over 5bn. Buyers and Sellers in Germany (in billion ) Asset managers / Fund managers Open-ended real estate funds / Special funds Property developers Private investors / Family Offices Listed property companies Pension funds Insurance companies Corporates / Owner-occupiers REITs Opportunity funds / Private equity funds Public administration Banks Closed-ended real estate funds Other investors Asset managers / Fund managers Open-ended real estate funds / Special funds Property developers Insurance companies Private investors / Family offices Listed property companies REITs Opportunity funds / Private equity funds Public administration Buyers Sellers Buyers and Sellers in the Top 7 (in billion ) Pension funds Corporates / Owner-occupiers Banks Closed-ended real estate funds Other investors Buyers Sellers Types of Properties in Germany (Volume in billion ) Office Hotel Retail Mixed Building Industrial use site & Logistics (commercial) Other properties in Germany thereof Top 7 9

10 Fast Facts OFFICE LEASING BERLIN Office Space Take-up 437, m² Leasing Take-up 349,9 m² Prime Rent 29.2 / m² Average Rent 17./ m² Vacancy Rate 2.7% Office Space Stock 19. million m² Achieved Rents BERLIN /m² 1 City West City East Potsdamer Platz / Leipziger Platz Central Station Mediaspree City Area West City Area East City Margins North City Margins South Periphery North Periphery West Periphery South Periphery East Adlershof Berlin Office Leasing Take-up Based on current activity on the Berlin office leasing market, we can expect a new record year in 217. New leases were signed for 437, sqm of office space in H1, up 26% yoy despite limited supply. This result puts Berlin ahead of the rest of Germany s top office markets. The largest transaction by far in Q2 was recorded in the dynamic Mediaspree submarket with Zalando taking up an additional 42,5 sqm of office space at the former Galeria Kaufhof. A number of large-scale leases signed for more than 5, sqm have spurred the excellent take-up results this year to date. 15 Schönefeld Spandau Tegel Reinickendorf a 96a Berlin Mitte Pankow Lichtenberg 1 1 Charlottenburg-Wilmersdorf Friedrichshain-Kreuzberg 96a Alt-Treptow 96a 96 Neukölln Tempelhof-Schöneberg Steglitz-Zehlendorf 1

11 Rents Rents have been soaring over the last 12 months due to ongoing high demand for space. Prime rent increased by more than 15% to a current 29.2 per sqm compared to 25.3 per sqm (H1 216). That puts Berlin in third place behind Munich and Hamburg in the ranking of most expensive locations in Germany. This development can be attributed to a number of high-volume transactions in prime locations in City East as well as at Potsdamer Platz. Around 4 new leases were signed in the price segment of over 2. per sqm, a clear indication that office tenants are increasingly willing to lease attractive space in the upscale segment. Average rent also increased by just shy of 1% yoy to 17. per sqm. More than 4 leases reflecting office take-up of around 2,3 sqm were signed in the lowest price segment of up to 1. per sqm. The price segment of between 1. and 12.5 per sqm also saw more than 4 new leases signed for a total of 22, sqm. The fact that the two lowest price segments recorded the smallest share in take-up is another sign that rents are soaring. The higher-priced segments of between 12.5 and 15. per sqm (47,7 sqm), 15. and 17.5 per sqm (5, sqm) and 17.5 and 2. per sqm (42,1 sqm) recorded around 6 new leases each. Margit Lippold Director Research margit.lippold@colliers.com Office Space Take-up (in 1, m 2 ) Supply and Vacancy Record demand combined with moderate new-build activity has led to an ongoing drop in vacancy. The amount of space currently available for immediate tenancy has fallen to a critical 2.7%. The term vacancy rate has basically been obsolete for months now, as we are facing full occupancy and the level of speculative newbuild activity in no way meets demand for space. Around 17, sqm of office space is scheduled for completion by the end of the year, roughly 75% of which has already been pre-leased. Slightly more new space is scheduled to become available in 21 (around 255, sqm), around 6% of which has already been taken up. New-build completions in 219 are currently expected to amount to around 36, sqm. Key Developments Another landmark building in a prominent location was added to City West next to the Zoofenster high-rise with completion of Upper West in spring 217. This new-build encompasses 33 floors featuring 53, sqm of high-end office and retail space as well as a Motel One Group hotel in the new design. Hines is developing ZOOM Berlin just around the corner on one of the last premium sites between Kurfürstendamm and Bahnhof Zoo. The combination of up to 5,5 sqm of office and 11, sqm of retail space highlights City West s vibrant flair as one of the city s premium locations st Half-year 6.% 214 Whole year 5.% % 216 Vacancy Rate (in %) and Vacancy (in 1, m 2 ) 217 Forecast for the entire 217 Prime and Average Rents (in /m 2 ) Prime Rent Average Rent 1st HY % 2.7% 2 1, st HY

12 Summary and Outlook In light of the above-average start to the year and Berlin s increasing popularity, we expect record results for 217. An increasing number of office tenants are currently willing to accept higher rents than they were in 216. In view of ongoing economic growth and a full pipeline containing a number of large-scale leases, we can reasonably expect take-up in 217 to hit the 9,-sqm mark for the first time. Fast Facts INVESTMENT BERLIN Transaction Volume 3,17 million Largest Group of Buyers Asset managers / Fund managers 43% Largest Group of Sellers Property developers 34% Most important Property Type Office 6% Prime Yield Office 3.25% Investment Transaction Volume Assets changed hands for a total of 3.bn on the Berlin commercial investment market in the first half of 217. Berlin expanded its lead in a Germany-wide comparison with Munich ( 2.2bn) and Frankfurt ( 2.1bn) coming in second and third. Activity on the market remained lively with around 7 deals signed. Total transaction volume also topped H1 216 results ( 2.1bn) by 47%. A healthy mix of considerable investment in stock properties and high-volume property developments boosted H1 217 s excellent result. Buyer and Seller Groups Commercial Transaction Volume (in million ) ,5 1,52 1,21 2,7 2, st Half-year 4, Whole year,1 4,9 6,5 3, Forecast for the entire 217 Asset/fund managers dominated the market buy side with 1.2bn, reflecting a market share of 43%. Open-ended funds and special funds accounted for 44m (15%), while insurance companies ( 259m, 9%) and listed property companies ( 25m, 9%) followed almost neck-and-neck. Asset/fund managers were active sell side as well with a market share of 21%, or 645m in transaction volume, claiming second place. Property developers/development companies came in first at 34%, disposing of attractive assets for 1.bn. Banks and opportunity/private equity funds sold real estate valued at 295m (1%) and 274m (9%), respectively, taking advantage of the favorable market conditions. Foreign investors expanded their high market share in the German capital in H1 217, accounting for 6% buy side and 5% sell side. 12

13 Investment Assets Office assets continue to dominate the Berlin investment market. Investors increasingly focused on pre-leased properties due to ongoing limited supply with speculative projects also in high demand. Office stock, refurbishments and new-build projects accounted for 1.bn combined, or 6% of transaction volume. Thanks to a strong Q1, retail assets ( 4m, 16%) and hotels ( 316m, 1%) remained in second and third place, respectively. The other asset classes account for the remaining 14%. The highest-volume transactions this year to date include the purchase of Zalando headquarters by South Korean asset manager Capstone, RFR Holding s acquisition of East Side Mall and Allianz Real Estate GmbH s purchase of Eight Floors (refurbishment plus newbuilt space), each changing hands for just shy of 2m. In Berlin, German and international portfolio deals accounted for a minimal share in transaction volume, with single asset deals dominating the market at almost 9%. Investment Highlights A large number of investors are still looking to core assets in prime central locations in Berlin as well as to investment alternatives in peripheral submarkets. Gross initial yield compression continues as a result of the ongoing investment boom. With prime yields only down 5 base points to 3.25%, yields for other assets are exhibiting higher margins and more volatility, particularly those promising considerable upside potential due to underrenting or vacancies. Numerous deals were signed at top prices considerably exceeding vendor expectations as a result. This trend can be seen in other asset classes as well and is set to continue throughout the remainder of 217. Summary and Outlook Due to ongoing high demand, continued economic growth, a favorable employment rate and in light of Berlin s strong H1 results, we expect 217 to pull in an excellent annual result, although the chances of breaking the record set in 215 are low based on current data. Transaction Volume by Buyer Group (Millions of ), Share (in %) Asset managers / Fund managers Open-ended real estate funds / Special funds Insurance companies Listed property companies Public administration Other investors Asset managers / Fund managers Banks Opportunity funds / Private equity funds Corporates / Owner-occupiers Other investors Transaction Volume by Seller Group (Millions of ), Share (in %) Property developers 34 Hotel Types of Properties (in %) building site (commercial) Mixed use Industrial & Logistics 3 Persistently low interest rates continue to drive demand for high-volume investments on the Berlin market, which is considered a safe haven by investors. With several larger transactions in the pipeline, including the double deal of Springer headquarters and Springer Passage, total transaction volume for 217 on a very lively market could reach the 7bn mark. Retail 16 6 Office 13

14 Fast Facts OFFICE LEASING DÜSSELDORF Office Space Take-up 19, m² Leasing Take-up 11, m² Prime Rent 26.5/m² Average Rent 15.4 /m² Vacancy Rate 6.9% Office Space Stock 7.6 million m² Achieved Rents DÜSSELDORF /m² 1 CBD City Center Harbor Area Kennedydamm Left of the Rhine D-North Airport City Grafenberger Allee City Center East D-South Düsseldorf Office Leasing Take-up Take-up on the office leasing market in the Düsseldorf municipal area in H1 217 maintained its momentum from 216 s exceptionally strong results even though occupiers proved less interested in taking up mid-sized units than in H The city posted 19, sqm in total office take-up in H1 217, falling just shy of H1 216 s remarkably strong results (24,3 sqm) by 7%. The result is nevertheless the second-best H1 result we have seen in the last 5 years Ratingen Meerbusch Unterrath Derendorf Mörsenbroich 2 Golzheim 7 Heerdt Oberkassel Pempelfort Altstadt 2 1 Düsseldorf CBD 1 Friedrichstadt 9 Grafenberg Neuss

15 The small space segment of up to 5 sqm accounted for around 24% of office take-up (46,1 sqm). 1 leases were signed in this space segment, 1 more than recorded in H Take-up in the segments of between 51 and 1, sqm and 1,1 and 2, sqm was down significantly in contrast by almost 2% in both segments. The space segment of between 2,1 and 5, sqm, however, was hit the hardest with takeup plummeting by around 41%. Last but not least, 6 leases were signed in the segment over 5, sqm (in total 59,2 sqm), reflecting a yoy increase of roughly 42%. Rents Prime rent in the Düsseldorf CBD remained stable at 26.5 per sqm in H1. This can be attributed to leases signed over the past several months at the Kö Quartier property being developed by Hines. Average rent within city limits increased by.4 yoy, spurred on by several large-scale leases signed for space in property developments. Excluding property developments and new-build properties, weighted average rent for stock properties currently comes to around 13. per sqm. Lars Zenke Director Research lars.zenke@colliers.com Office Space Take-up in 1, m The CBD continues to command the highest weighted average rent at 22.6 per sqm per month, up a considerable 1% yoy. The City Center submarket saw average rents rise substantially as well by 17% to a current 16.4 per sqm. This increase was driven by high-priced leases signed for space at Andreas Quartier located in the Düsseldorf old town directly bordering the CBD. Supply and Vacancy Vacancy on the Düsseldorf office leasing market has been experiencing a favorable trend over the past few years, a trend that has further accelerated in the past 12 months. Compared to H1 216, space available for immediate tenancy within Düsseldorf city limits dropped by almost 1, sqm to a current 521,1 sqm. That puts the city s vacancy rate at a low 6.9%, down 1.2 percentage points yoy. Subletting is currently not a factor on the Düsseldorf office leasing market. Key Developments Around 25, sqm of new office space has been completed this year to date. This can be expected to have little impact on vacancy, however, as just under % of this space was already preleased at completion. Completion of construction on property developments in 217 is expected to add around 5, sqm of space to the market with most of this activity revolving around the city center and Kennedydamm submarkets. Prelease rates are currently recorded at slightly below 75%. Additional property developments encompassing around 91, sqm are scheduled for completion in 21, % of which have already been preleased or taken up by owner-occupiers st Half-year % 1.4% 213 Whole year % Vacancy Rate (in %) and Vacancy (in 1, m 2 ) 217 Forecast for the entire 217 Prime and Average Rents (in /m 2 ) Prime Rent Average Rent 7.5% st HY % 1st HY

16 Summary and Outlook The office leasing market in the Düsseldorf municipal area posted particularly strong take-up results in H The outlook for the second half of 217 is favorable, and we expect office take-up to hit at least 35, sqm by the end of 217. In combination with high pre-leasing rates in property developments, vacancy in the city of Düsseldorf could dip below the 5,-sqm mark for the first time. It also remains to be seen whether weighted average rents will be able to maintain their upward trajectory throughout the remainder of the year. Fast Facts INVESTMENT DÜSSELDORF Transaction Volume 75 million Largest Group of Buyers Asset managers / Fund managers 26% Largest Group of Sellers Opportunity funds / Private equity funds 23% Most important Property Type Office 79% Prime Yield Office 4.% Investment Transaction Volume A total of around 75m was poured into the Düsseldorf commercial real estate market (municipal area only) in H1 217, exceeding H1 216 results by 12% and matching the five-year average. Similar to the previous year, no deals were signed in the 9-figure range during the first 6 months of the year. If we were to include the deals signed in the neighboring cities of Ratingen and Neuss, transaction vol-ume would already come to over 1bn. Commercial Transaction Volume (in million ) ,92 1,95 2,55 2,1 2, Although general investor demand for real estate assets in the city remains high, supply continues to be extremely limited, especially in prime locations, and more and more investors are looking to sec-ondary locations or properties with higher risk profiles. As such, core investments account for a low 25% in total transaction volume this year to date. Another 25% of transaction volume can be attributed to core+ assets. Buyer and Seller Groups , st Half-year Whole year Forecast for the entire 217 Asset/fund managers ( 196m) and open-ended real estate funds/special funds ( 12m) dominated the market buy side. Property developers/development companies accounted for a significant share of transaction volume with 15m. Property developers participated in the highest number of transac-tions (1 deals). Opportunity funds/private equity funds and asset/fund managers brought in the highest transaction volume sell side at around 17m each, followed by property developers/development companies at roughly 12m. All other investor groups generated transaction volumes of well below 1m. Foreign investor activity, which was strong in 216, remained so in H1 217, accounting for roughly 44% of total transaction volume. The major players involved came from France, the UK and the US. Foreign investors were active sell side as well, accounting for half of total transaction volume. 16

17 Investment Assets H1 217 saw a considerable number of transactions in the office segment, with 79% of transaction volume attributable to this asset class. The 1 highest-volume deals all involved the office segment with two transactions for more than 5m. The market also saw a number of smaller transactions (25 deals) for under 15m, a yoy increase of over 65%. Commercial lots have also been popular this year with property developers/development companies investing almost 5m in this segment to date. Struggling to compete, hotel assets ( 35m) and logistics assets ( 22m) followed in the ranks. Prime yields for office assets were recorded at 4.% mid-year, down 35 base points compared to H These yield levels are no longer confined to the CBD, however, and can currently be found in prime locations in the Kennedydamm and Hafen submarkets as well. High street retail assets in the CBD are still changing hands at prime yields of 4.% with even lower yields recorded for selected premium properties on Königsallee. Investment Highlights Investment activity primarily revolved around the north of Düsseldorf in H The Kennedydamm submarket deserves particular mention, generating over 2m in transaction volume. The City Center and CBD submarkets only generated 1m in transaction volume combined, a clear indication that investment opportunities in downtown Düsseldorf are currently hard to come by. Transaction Volume by Buyer Group (Millions of ), Share (in %) Asset managers / Fund managers Open-ended real estate funds / Special funds Property developers REITs Private investors / Family Offices Other investors Opportunity funds / Private equity funds Asset managers / Fund managers Property developers Insurance companies Closed-ended real estate funds Transaction Volume by Seller Group (Millions of ), Share (in %) Summary and Outlook Other investors 21 The trend on the Düsseldorf investment market remained favorable in the first half of the year with a slight yoy increase in transaction volume. Shortage of supply remains a limiting factor and is inspiring investors to increasingly look to value-add assets as well as properties in the Düsseldorf outskirts (primarily Ratingen and Neuss). We can once again expect transaction volume within Düsseldorf city limits to hit the 2bn mark by the end of 217. Types of Properties (in %) Retail Other properties Hotel Industrial & Logistics Building site 6 (commercial) 6 79 Office 17

18 Fast Facts OFFICE LEASING FRANKFURT Office Space Take-up 245, m² Leasing Take-up 23,2 m² Prime Rent 37.5 /m² Average Rent 1. /m² Vacancy Rate 1.% Office Space Stock million m² Achieved Rents FRANKFURT /m² CBD 1 Banking District Westend City Other submarkets 4 Central Station / Westhafen Bockenheim Europaviertel / Fair District City West Frankfurt South Airport Frankfurt West Frankfurt North Mertonviertel Eastend West Eastend East Niederrad Eschborn Kaiserlei Frankfurt Office Leasing Take-up Roughly 245, sqm was taken up on Frankfurt s office leasing market (including Eschborn and Offenbach Kaiserlei) in H1 217, exceeding H1 216 s results by around 16%. This is the best H1 result we have seen since 2. Demand on the office leasing market remained high during the first half of 217. Although only one large-scale lease in the space segment of more than 1, sqm was signed in H1, total take-up was considerably higher yoy. This positive trend can largely be attributed to widespread leasing activity across most space segments. This was particularly the case in the 455 Bad Soden am Taunus Oberursel (Taunus) Steinbach (Taunus) Kalbach 12 Nieder-Eschbach Bonames Harheim Preungesheim Schwalbach Heddemheim am Taunus Eschersheim Eckenheim Sulzbach Seckbach (Taunus) 16 Eschborn Praunheim Ginnheim Hausen Nordend-West Westend-Nord 4 Rödelheim Bornheim Riederwald Sossenheim 7 Westend-Süd 13 Ostend Fechenheim Unterliederbach Bockenheim Innenstadt 1 6 Frankfurt 1 17 Höchst am Main Nied Gallus 4 Offenbach Zeilsheim Griesheim am Main Sachsenhausen-Nord Sindlingen 43 5 Schwanheim 15 4a 66 4 Niederrad Sachsenhausen-Süd 11 3 Bad Vilbel 521 Hattersheim am Main 43 Kelsterbach 43 3 Neu-Isenburg 3 Heusenstamm 9 44 Dreieich

19 segment of more than 5, sqm, which saw an increase of more than 35% to around 64,2 sqm. Activity also remained lively in the small-scale segment of up to 5 sqm. The traditionally well-represented banking and finance sector gave way to other industries in Q1, a trend that continued into Q2. The banking sector accounted for two out of ten large-scale leases signed for more than 5, sqm in H1 with the Deutsche Bundesbank taking up space at Trianon (7, sqm) and the ECB signing a lease at the Japan Center (6,75 sqm). The sector only managed to take fourth place in terms of demand, however, due to strong activity by consulting firms and IT companies as well as in the construction and real estate sector. Consulting firms accounted for more than 2% of total take-up (around 51,3 sqm) and were also clearly in the lead based on number of leases signed. The largest lease signed this year to date saw law firm Clifford Chance taking up over 11, sqm at Junghof Plaza. Rents Prime rents stabilized at Q1 217 levels ( 37.5 per sqm). Prime rents dipped yoy by 1 per sqm, however, due to the smaller number of high-priced leases signed. Average rent registered a slight increase of.1 per sqm in Q1 to 1. per sqm. Supply and Vacancy The drop in vacancy on the office market continued throughout H Around 1.24 million sqm of space was available for immediate tenancy at the end of Q2. The vacancy rate dropped considerably by 1 basis points yoy to a current 1.%. We do not expect to see a reversal in this trend in the months ahead. Pressure on vacancy rates will remain high due to conditions such as low new-build activity, the ongoing trend of converting office space into residential and lively demand for stock space. Vacancy rates do differ considerably depending on location, however. Submarkets such as Europaviertel, Frankfurt City and Bockenheim recorded rates of well below 6% while space availability in peripheral locations is still high. Laura Müller Senior Consultant Research laura.mueller@colliers.com Office Space Take-up in 1, m Prime and Average Rents (in /m 2 ) st Half-year Prime Rent Whole year Average Rent Forecast for the entire 217 1st HY 217 Key Developments The number of new-build completions will remain below average in % of roughly 116, sqm scheduled for completion in 217 in nine projects has already been taken up. Construction activity will remain moderate in 21 as well. 47% of space scheduled for completion in 21 has already been pre-leased with roughly 61, sqm out of 117, sqm of new-build space still available. Speculative new-build activity is not set to pick up until 219 when the OMNITURM and Marieninsel projects will add more than 9, sqm of new speculative office space to the Frankfurt market. Vacancy Rate (in %) and Vacancy (in 1, m 2 ) % 1,576 1,454 1,35 1, % % % % 1,23 1st HY

20 Summary and Outlook The office leasing market has already exceeded last year s results by far with a take-up volume of around 245, sqm, and we expect demand to remain lively in the months ahead. We also expect activity in the banking sector to pick up over the course of the year. In light of the fact that several leases currently await signing by international banks, the first Brexit-induced deals in the finance sector may also stimulate demand. Take-up results of more than 5, sqm for the entire year remain realistic. Fast Facts INVESTMENT FRANKFURT Transaction Volume 2,117 million Largest Group of Buyers Asset managers / Fund managers 36% Largest Group of Sellers Open-ended real estate funds / Special funds 27% Most important Property Type Office 97% Prime Yield Office 3.5% Commercial Transaction Volume (in million ) ,422 1,572 1,364 2,751 1, st Half-year 5,11 Whole year 5,67 6,143 5, 2, Forecast for the entire 217 Investment Transaction Volume H1 217 results on the Frankfurt investment market at just over 2.1bn reflect ongoing high demand for commercial assets. Following a short breather in Q1 and a generally modest start to the year, activity picked up significantly in Q2, reflecting a yoy increase in transaction volume of 25%. Activity was fueled not only by the generally tense market situation but also by excellent conditions on the office leasing market. Foreign investors were particularly active buy side when it came to high-volume deals. South-Korean investor Mirae Asset Management participated in 217 s highest-volume deal to date, purchasing T for around 3m. Foreign investors also secured further deals for more than 1m, including Westend Caree. Buyer and Seller Groups Core products generated a 4% share of total transaction volume in H However, this result was heavily impacted by the sale of T, which accounted for a third of total investment volume in the core segment, going for around 3m. The other risk classes also benefited from high demand, in particular in the price segment of up to 1m. We are also seeing an upswing in demand for locations outside the city center with around 65% of transaction volume recorded outside the CBD in H The high share of deals signed in peripheral submarkets shows that many investors are willing to accept location risks in light of scarce supply. 2

21 Foreign investors significantly increased their activity in Q2, considerably boosting their share buy side from around 11% in Q1 to a current 59%. Following a slow Q1 in terms of largescale deals, which typically involved foreign investors, market activity has picked up considerably in the past three months. We expect foreign investors to remain very active buy side throughout the remainder of the year. Transaction Volume by Buyer Group (Millions of ), Share (in %) Asset managers / Fund managers Open-ended real estate funds / Special funds As in 216, asset/fund managers, acting as institutional investors on behalf of third parties, continue to be the most important investor group buy side on the Frankfurt market, accounting for a 35% share of transaction volume. Open-ended real estate funds and special funds generated the highest share of transaction volume sell side, however, with roughly 5m. Investment Assets Property developers Opportunity funds / Private equity funds Banks Other investors A number of deals signed in the office segment, traditionally the strongest asset class on the Frankfurt leasing market, led to a further increase in market share. Office real estate has clearly led the market so far this year, recording an investment volume of more than 2bn and a market share of roughly 97%. Commercial sites (around 2%) trail behind, just missing the 5m mark with a volume of 49m. To date, hotel assets have not been able to retain last year s relatively high market share. Investment Highlights Ongoing high demand continued to put pressure on yields in all market segments. (Gross) prime yields for office assets in top location fell another 25 basis points to a current 3.5%. Gross prime yields for retail properties in high street locations (2.%) and for logistics properties (4.9%) continue to drop as well. Summary and Outlook Current data suggests that the rapid growth we are seeing on the Frankfurt investment market will continue into H Limited supply again proved an obstacle in H1 217, causing investors to sign a large number of deals in peripheral submarkets. Lively market activity and significantly higher volumes in Q2, however, serve to illustrate Frankfurt s status as a highly attractive investment destination. With several high-volume deals already in the pipeline for H2, we can once again expect transaction volume to hit the 5bn mark by the end of 217. Transaction Volume by Seller Group (Millions of ), Share (in %) Open-ended real estate 27 funds / Special funds property developers Asset managers / Fund managers Private investors / Family Offices Opportunity funds / Private equity funds Other investors Logistik / Industrie Types of Properties (in %) Mixed use 97 Office 21

22 Fast Facts OFFICE LEASING HAMBURG Office Space Take-up 27, m² Leasing Take-up 269, m² Prime Rent 26./m² Average Rent 15.3/m² Vacancy Rate 4.% Office Space Stock million m² Achieved Rents HAMBURG /m² 1 City HafenCity Harbour Fringe Alster West Alster East 11,5-2, 6 St. Georg City South St. Pauli Altona Bahrenfeld Eimsbüttel Eppendorf Airport City North Barmbek Wandsbek Harburg Periphery East Periphery West.-12. Hamburg Office Leasing Take-up The Hamburg office market proved 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 owner-occupiers) brought in a high 27, sqm, reflecting unabated strong demand for office space. The city is currently experiencing excessive surplus demand unlike any seen previously. This unmet demand can be attributed to a shortage of available space, particularly in the medium and large-space segments. Olympus signed the largest lease this year to date for roughly 34,5 sqm of new-build Bahrenfeld Altona Eimsbüttel 447 St. Pauli 12 Eppendorf Sternschanze 13 Harvestehude 4 Hamburg 2 1 Altstadt Winterhude Uhlenhorst HafenCity 6 St.Georg 15 Barmbek Hammerbrook Wandsbek Harburg

23 space in Wendenstraße in the City Süd submarket, which will become the company s new European headquarters. The second-largest lease was signed at the beginning of the year by the University of Hamburg, which is temporarily occupying 2, sqm at Überseering 35 in City Nord. Almost half of take-up was generated by leases and occupier-owner deals of between 1, und 5, sqm. Leases signed in the City submarket accounted for around 26% of take-up, putting City on equal footing with City Süd at 23%. Occupiers are increasingly turning to other city districts, guaranteeing that future demand will be spread over several submarkets. The City Nord submarket came in third with 1%. Consulting firms have been the most active in leasing office space since early 216. This sector, however, came in just barley ahead of the manufacturing industry (large-scale lease signed by Olympus) in H1 217 with 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 Center. We may see more leases signed in this growing segment as the year continues. The large number of start-ups based in Hamburg is triggering increased demand for flexible, short-term office concepts, which the traditional office leasing market cannot offer. 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 stable compared to Q Supply and Vacancy Vacancy dropped in the past 12 months by 2 basis points from 5.% to 4.%, with vacancy recorded at 4.9% in Q In light of ongoing high demand and comparatively moderate new-build activity, we can expect the vacancy rate to continue to drop as the year progresses. The competition for attractive space we are currently seeing among businesses looking to move is bound to increase as a result. Key Developments Corinna Nürnberger Junior Consultant Research corinna.nuernberger@colliers.com Office Space Take-up in 1, m Prime and Average Rents (in /m 2 ) st Half-year Prime Rent Whole year Average Rent Forecast for the entire 217 1st HY 217 The property developments scheduled for completion in the next few years will not be able to sufficiently meet excess demand, particularly in the city center. There is also a chance that some projects currently in the planning phase will never come to fruition. A good example are the high-rise buildings planned right next to the central station in the City submarket, where urban heritage conservation could impede new development. Several owner-occupier projects outside the city center are also poised to start construction. Developers are Vacancy Rate (in %) and Vacancy (in 1, m 2 ) % 6.% 5.2% 5.% 4.% st HY

24 planning to break ground on construction of a new-build in Eimsbüttel in 21, for example, featuring a total area of roughly 5, sqm. However, as is the case with most owner-occupier projects, this completion volume will not add available office space to the market, thus only having an indirect impact on the tense supply-demand situation. Summary and Outlook Based on H1 217 s outstanding result, we expect annual takeup of 55, sqm. Take-up activity over the next two quarters will need to hit 131, sqm for this to happen, and this appears realistic in light of current demand for office space and the fact that some companies are currently on the lookout for large-scale space. Fast Facts INVESTMENT HAMBURG Transaction Volume Largest Group of Buyers Commercial Transaction Volume (in million ) , 97 1,45 1,95 1, st Half-year 3,65 Whole year 4, 1,251 million Open-ended real estate funds / Special funds 2% Largest Group of Sellers Opportunity funds / Private equity funds 4% Most important Property Type Office 61% Prime Yield Office 3.4% 4,91 4,5 1, Forecast for the entire 217 Investment Transaction Volume Commercial assets changed hands in Hamburg 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 previous year levels, investor interest in Hamburg assets remains strong. The city currently holds fourth place among Germany s seven largest real estate hubs. Buyer and Seller Groups Foreign investors, primarily from Norway, the UK and the US, proved more active buy side than in H1 216, 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, attractive investment destination. Norwegen Wenaasgruppen signed the highest-volume deal involving a foreign investor this year to date for a hotel asset. Open-ended real estate funds and special funds were most active buy side on the Hamburg market as well as in the rest of Germany, generating a combined 35m, or 2% of total transaction volume. Private investors and family offices as well as asset/fund managers were also very active, pouring roughly 2m (22%) and 23m (19%) into Hamburg assets, respectively. With new assets on the market, property developers continued to be active as well, accounting for roughly 11% or 13m. Opportunity funds/private equity funds and corporates/owner-occupiers were the most active investor group sell side, generating around 5m from resales, or roughly 4% of total transaction volume. Asset/fund managers secured second place, disposing of assets valued at 1m in total. 24

25 Investment Assets The sale of the Radisson Blue Hotel for around 2m contributed heavily to the particularly large share in transaction volume generated by hotel assets in Q1 217 (37%). This number dropped sharply to 1% in Q2, with office sales taking home a market share of around 61%. As in the previous five years, office assets were by far the strongest asset class on the Hamburg real estate investment market. Retail assets came in third with a share of around % followed closely by mixed-use assets (7%). Portfolio deals accounted for a 66% share in transaction volume, coming in well-ahead of single asset deals in H This result can primarily be attributed deals including the HafenCity Gate office property from the Odin portfolio and the Züblin portfolio with a transaction volume of over 5m across three assets. Investment Highlights Limited supply again heavily influenced market activity, leading to further yield compression in H Prime office yields dropped from 3.7% to a current 3.4%, down 3 base points yoy. Prime retail yields also fell by 4 base points from 3.6% to 3.3%. Yields for logistics assets currently come to 4.9%. Limited supply is not only pushing prices but also shifting investor focus to areas of the city that were previously less popular. Districts such as St. Georg and Altona are benefiting from their central location and available infrastructure. Investors have also set their sights on Harburg, which boasts several interesting assets and considerable potential for development. Prices in city locations have risen considerably as a result. With leasing markets stable, investors are also more willing to accept the leasing risks associated with manage-to-core assets. The growing number of forward transactions also indicates increased willingness among investors to take risk, a trend that will become more noticeable in Hamburg in H2. Summary and Outlook Looking at 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 Buyer Group (Millions of ), Share (in %) Open-ended real estate funds / Special funds Private investors / Family Offices Asset managers / Fund managers Property developers Banks Other investors Asset managers / Fund managers Property developers Corporates / Owner-occupiers Listed property companies Other investors Transaction Volume by Seller Group (Millions of ), Share (in %) Opportunity Fonds / Private Equity Fonds Types of Properties (in %) Building site (commercial) Mixed use Retail Hotel Industrial & Logistics Office 25

26 Fast Facts OFFICE LEASING COLOGNE Office Space Take-up 151, m² Leasing Take-up 123, m² Prime Rent 21./m² Average Rent 12.5/m² Vacancy Rate 4.% Office Space Stock 7.4 million m² Achieved Rents COLOGNE /m² 1 Old Town North Old Town South Deutz New Town North New Town South Niehl Ossendorf Ehrenfeld / Braunsfeld Lindenthal Zollstock Marienburg / Bayenthal Rodenkirchen Cologne West Cologne Northwest Mülheim Kalk Gremberghoven Cologne Office Leasing Take-up The Cologne office leasing market posted a solid take-up result of 151, sqm (including owner-occupiers) in H Although H1 216 s results were considerably higher with H1 217 down 21%, 216 saw the signing of a large-scale lease for 6, sqm in the Zurich Insurance new-build in MesseCity. H1 217, however, did manage to beat the five-year average. The Institute for Federal Real Estate (BImA) signed the largest-scale lease in the first six months of the year for roughly 2, sqm of office space. The property, which is located in Pulheim 59 Frechen Chorweiler 7 9 Ossendorf 4 Neustadt-Nord Müngersdorf Altstadt-Nord Ehrenfeld Kalk 55 1 Köln Neustadt-Süd Lindenthal 2 Deutz Nippes Altstadt-Süd Leverkusen Mülheim Gremberghoven Marienburg Bergisch Gladbach 4 Hürth Hahnwald

27 the Deutz submarket (Von-Gablenz-Street 2-6), is currently being used as Lufthansa s main German office. Lufthansa will vacate the building by the end of 217. The German Federal Office for Family and Civil Affairs, a service unit at the Federal Ministry for Family Affairs, Senior Citizens, Women and Youth, will then move into building. Owner-occupier Strabag accounted for the second-largest take-up result with construction of the company s new corporate headquarters in the Deutz submarket getting underway in Q2. The company s previous site at Siegburger Straße 241 will see development of a new-build featuring 17, sqm of office space, scheduled for completion in H2 21. Deutsche Lufthansa and its investments in the Cologne market also accounted for considerable large-scale take-up in Q1. Lufthansa is planning to move its administrative offices to the One Cologne office building on Venloer Straße in fall 21, where the company has leased roughly 4,6 sqm. Until then, the company has signed an interim lease for space in the Braunsfeld district. Rents After experiencing a slight decline in H1 216 following five consecutive years of upward movement, average rents posted a noticeable increase just shy of 9% yoy, putting weighted average rent at 12.5 per sqm. Prime rents in Cologne followed a similar trend in H1 217 as well, up 5% yoy to a current 21. per sqm. Supply and Vacancy Lively leasing activity in H1 217 once again led to slight drop in vacancy in Cologne with roughly 375, sqm available for immediate tenancy at the end of Q2, reflecting a vacancy rate of 4.%. Vacancy has been declining steadily since 21 and had dropped even further in past quarters. Although supply of potential rental properties in the segment of below 1, sqm remains sufficient, space in the segment above 1, sqm can be hard to come by, particularly for tenants looking for highend accommodation. Key Developments The submarkets located along the right banks of the Rhine River continue to offer the highest development potential. Developments currently underway in this area include MesseCity, Euroforum Nord and Deutzer Hafen. Property developer GERCHGROUP recently acquired a 16-hectar lot from Deutz AG and is planning to develop a new urban district on the former works site in Mülheim. Lars Zenke Director Research lars.zenke@colliers.com Office Space Take-up in 1, m Prime and Average Rents (in /m 2 ) Vacancy Rate (in %) and Vacancy (in 1, m 2 ) st Half-year Prime Rent Whole year Average Rent Forecast for the entire 217 1st HY % 7.2% 5.9% 5.% 4.% st HY

28 Summary and Outlook We expect 217 to post annual take-up results of between 25, and 3, sqm, thanks to an excellent mid-year result attributable to several large-scale leases. Weighted average rents and prime rents are poised to generally remain stable, although ongoing absorption will further intensify competition for available space. Fast Facts INVESTMENT COLOGNE Transaction Volume million Largest Group of Buyers Listed property companies 37% Largest Group of Sellers Property developers 37% Most important Property Type Office 3% Prime Yield Office 4.5% Commercial Transaction Volume (in million ) st Half-year 1,316 Whole year 1,94 1,76 1,6 217 Forecast for the entire 217 Investment Transaction Volume Investors poured a total of m into the Cologne commercial investment market in H1 217, an increase of 132% yoy. Two major deals signed in Q1 217 were in large part responsible for this result. In one deal, Austria-based company Immofinanz sold the major mixed-use project Gerling-Quartier located in the city center to a joint venture consisting of Quantum Immobilien AG and Proximus Real Estate. Quantum and Proximus also acquired the neighboring building complex Friesenquartier from Immofinanz. The second deal involved Swiss Life s acquisition of the former Kaufhof headquarters in Cologne. The office complex at Leonard-Tietz-Straße is currently being converted into HBC s Europe Service Center. The vendor was a WealthCap closed-ended real estate fund. Demand for real estate investment in Cologne continues to be strong but supply, particularly in prime downtown locations, remains extremely limited with investors increasingly turning to suburban locations. Core and core+ investments accounted for just over 7% of transaction volume in total at mid-year. Buyer and Seller Groups Listed property companies were most active buy side with roughly 323m in transaction volume, followed by insurance companies with 15m. Open-ended real estate funds/special funds generated a significant share of transaction volume as well with roughly 115m. Listed property companies also recorded the highest number of deals signed (seven transactions). With roughly 325m in transaction volume, property developers/development companies generated the highest transaction volume sell side, followed by closed-ended real estate funds and corporates, which accounted for approximately 17m each. All other investor groups generated transaction volumes well below the 1m-threshold. 2

29 Just as in the previous year, investors were very active in H Foreign investors primarily from Switzerland, the UK, and China accounted for roughly 4% of total transaction volume buy side. Numerous foreign investors were active sell side as well, accounting for exactly half of total transaction volume. Investment Assets Activity on the Cologne investment market was marked in the first half-year by a relatively equal distribution of transaction volume across the various asset classes. Office assets took the lead with 3% of transaction volume, although this result was much lower than H Warehousing/logistics, retail and commercial sites followed in the ranks with shares of between 15% and 1%. Mixed use and hotel properties brought up the rear with shares of 7% and 5%. A total of five assets changed hands for more than 5m each. Another nine deals were signed for between 2m and 5m. A large number of smaller transactions were recorded at under 15m (16 deals) as well, a continuation of the previous year s high activity in this segment. Investment Highlights Investment activity primarily revolved around the Cologne city center in H1 217, with this part of the city accounting for approximately 4% of transaction volume. The remaining transaction volume was distributed quite evenly throughout the Cologne municipal area. Prime yields for office assets in Cologne stabilized at 4.5% at mid-year. This marks a significant drop of 5 basis points compared to H We expect a further correction of prime yield for office assets in the months ahead. High Street retail assets in prime downtown locations continue to be sold at prime yields of up to 4.2% with a downward trend expected over the further course of the year. Summary and Outlook The Cologne investment market experienced a remarkable trend in the first half of the year with a noticeable yoy increase in transaction volume. Although transaction volume was dominated by high-volume transactions, we also saw lively activity in the smaller segments. Available properties in central locations remain scarce, causing investors to increasingly turn to alternative assets. We can once again expect transaction volume within Cologne city limits to exceed the 1.5bn mark by the end of 217. Even though this would put transaction volume below last year s result, it would be the third year in a row to top 1.5bn. Transaction Volume by Buyer Group (Millions of ), Share (in %) Listed property companies 37 Insurance companies Open-ended real estate funds / Special funds Pension funds Property developers Other investors Property developers 37 Corporates / Owner-occupiers Closed-ended real estate funds Opportunity funds / Private equity funds Private investors / Family Offices Other investors Transaction Volume by Seller Group (Millions of ), Share (in %) Building site (commercial) Mixed use Retail Types of Properties (in %) Hotel Office Industrial & Logistics 29

30 Fast Facts OFFICE LEASING MUNICH Office Space Take-up 416,5 m² Leasing Take-up 394,6 m² Prime Rent 35.5/m² Average Rent 16.5/m² Vacancy Rate 2.5% Office Space Stock million m² Achieved Rents MUNICH /m² 1 Center Center Northwest Center Northeast Center Southeast Center Southwest City Northwest City Northeast City Southeast City Southwest Periphery Southwest Periphery Northwest Periphery Northeast Periphery Southeast Munich Office Leasing Take-up The Munich office leasing market experienced a strong H1 217, recording the highest take-up result since 21 with roughly 416,5 sqm and topping H1 216 results by %. Net leasing performance excluding owner-occupiers came to around 394,6 sqm, up 12% yoy with 14 leases signed for more than 5, sqm, including one signed by an owner-occupier. Large-scale leases claimed a 3% share of total take-up combined. The IT sector was the most active industry in H1 217 both in terms of take-up and number of deals signed, accounting for 24%, or 11,5 sqm. Large established corporations as well as start-ups generated strong demand in this sector. Bergkirchen Gröbenzell Germering Gauting Dachau 11 Allach-Untermenzing Karlsfeld Moosach R Neuhausen-Nymphenburg Maxvorstadt Pasing-Obermenzing 3 Bogenhausen Arabellapark Aschheim Feldkirchen 1 Hirschgarten Arnulfpark Laim München Moosfeld 94 Messe Riem 2 Westend Au-Haidhausen Werksviertel 34 4 Gräfelfing 9 Planegg Martinsried Sendling Obergiesing Haar Krailling Neuried Obersendling Pullach im Isartal Unterschleißheim Oberschleißheim Milbertshofen-Am Hart 13 7 Business Campus Garching 11 9 Schwabing-Freimann Parkstadt Schwabing Neuperlach Unterhaching Garching Unterföhring Neubiberg 12 Ismaning Ottobrunn Putzbrunn Hohenbrunn Baierbrunn Oberhaching Taufkirchen 13 Höhenkirchen 3

31 Rents Average rents on the market as a whole posted a yoy increase of 2% to 16.5 per sqm. This relatively moderate increase is deceptive, however, as the shift in take-up to the more affordable surrounding areas due to shortage of supply had a considerable impact. Taking a closer look at the averages within city limits and in the surrounding areas, we find considerably higher rent increases of % each. Prime rent was recorded at 35.5 per sqm, up 6% yoy. The majority of premium space within the city s Altstadtring (inner ring road) is going for over 3. per sqm. Supply and Vacancy Office vacancy in Munich continued to drop rapidly in H1 217 due to high take-up. Office space available for immediate tenancy is currently recorded at 57,4 sqm (2.5%). Vacancy within city limits currently comes to 1.7%, making it increasingly difficult for businesses to find suitable space. Although vacancy in the areas surrounding the city is comparably high at 5.1%, high-end space has already become a rare find in many of these locations. Despite the fact that space in some areas is becoming increasingly harder to come by, the number of property developments in the pipeline continues to be low. Based on the latest indications, roughly 16,5 sqm of new office space will be added to the market this year with pre-leasing rates already at 7%. Even with 217,1 sqm scheduled for completion in 21, these numbers are still considerably below the 1-year average with pre-leasing rates currently at 42%. Key Developments Two larger-scale projects along the western part of the main suburban train route got off the ground in H1. Construction of Kap West, featuring more than 4, sqm of office space, is underway at Hirschgarten and construction of MY.O with more than 25, sqm of office space is poised to start at Laim train station. The first tenants leased space in both developments before construction got underway. Although speculative developments are easing pressure on the market, we expect vacancy rates to drop further in light of expected take-up levels, which have been on the high side in recent years. The market needs new developments now more than ever to ensure that Munich does not run out of office space in just a few years, which would limit expansion opportunities and discourage companies from moving to the city. Tobias Seiler Associate Director Research tobias.seiler@colliers.com Office Space Take-up in 1, m Prime and Average Rents (in /m 2 ) Vacancy Rate (in %) and Vacancy (in 1, m 2 ) st Half-year Prime Rent Whole year Average Rent Forecast for the entire 217 1st HY % 5.1% 4.% 3.% 1,392 1, % 57 1st HY

32 Summary and Outlook The Munich office market continues to be characterized by limited supply and sparse new-build activity. Companies looking to move into large-scale space within three months or less have very few options available and bottlenecks are becoming the norm in the mid-sized segment as well. Businesses unable to sign a lease for space at a property development or during the early construction phase often have a difficult time finding office space. We expect this situation to intensify over the next few quarters as little space is scheduled to hit the market in the near future. In light of the strong demand for office space, we can look for take-up (excl. owner-occupiers) to hit the 75,-sqm mark this year, exceeding an already strong previous year result. Fast Facts INVESTMENT MUNICH Transaction Volume 2,243 million Largest Group of Buyers Open-ended real estate funds / Special funds 22% Largest Group of Sellers Property developers 39% Most important Property Type Office 47% Prime Yield Office 3.25% Commercial Transaction Volume (in million ) ,765 1,45 2,54 2,779 1, st Half-year 5,154 Whole year 5,54 6,6 6,5 2, Forecast for the entire 217 Investment Transaction Volume Commercial real estate deals in Munich generated roughly 2.24bn in H1 217, exceeding H1 216 s above-average results by 21%. A total of five high-volume transactions in the nine-figure range accounted for around one-third of transaction volume. Mid-volume deals ranging from 3m to 1m accounted for another third of total transaction volume. The deal pipeline is already well-stocked for the months ahead and, as has often been the case in the past, we expect H2 to be the more lively half of the year on the investment market. Buyer and Seller Groups Open-ended real estate funds and special funds claimed first place buy side with a transaction volume of 44m. They were followed by property developers with more than 471m and asset/fund managers with 347m. Insurance companies, private investors and REITS were also among the most active investors, participating in deals in the nine-figure range. Sell side, property developers took advantage of the current market phase to dispose of assets valued at m and often finding suitable buyers before start of construction. Opportunistic investors claimed second place, benefiting from the upward market trend, selling assets for a total of 22m, almost as much as insurance companies, who took the opportunity to slim down their portfolios. Foreign investors accounted for one-third of capital invested with asset/fund managers at the fore. In addition to investors from other EU countries, Asian investors dominated foreign investment activity with a transaction volume of 15m. With foreign investors accounting for 17% of total transaction volume sell side, the Munich market again enjoyed net capital influx similar to the previous year. 32

33 Investment Assets Demand for office assets in Munich continues to rise. With interest in office space high and the number of positions for office employees increasing, investors continue to consider office properties in Munich a secure investment. In light of limited vacancy, this not only applies to downtown locations but also to good office locations outside the city center. Deals involving office assets generated a 49% share of total transaction volume. The hotel investment market deserves special mention as well, securing second place with a share of 23%. Logistics assets accounted for a 7% share, followed by retail assets at 6%. The sale of the MIRA shopping center in the north of Munich was key in this result. Investment Highlights Due to a strong leasing market, investors are targeting high-volume office buildings with upside potential and vacancy or snapping up office building developments even before the first leases are signed. Allianz, for example, acquired the Kap West office building at Hirschgarten, featuring roughly 41, sqm of rental space, during the project phase. A joint venture comprised of Bayern Projekt and Europa Capital purchased Telefónica headquarters on Georg-Brauchle-Ring and is planning to reposition and then let the property. Hotel assets came out on top in H1 217 with investors pouring more than 5m into the asset class, 39% more than in all of 216. In addition to the sale of stock hotel properties in all locations and categories, transaction activity revolved heavily around boarding house projects. Demand for low-budget and business hotels boosted the investment market as did demand for temporary accommodation on the Munich residential market. Transaction Volume by Buyer Group (Millions of ), Share (in %) Open-ended real estate funds / Special funds Property developers Asset managers / Fund managers Insurance companies Private investors / Family Offices Other investors Opportunity funds / Private equity funds Insurance companies Private investors / Family Offices Open-ended real estate funds / Special funds Other investors Property developers Transaction Volume by Seller Group (Millions of ), Share (in %) Summary and Outlook Yields for core assets once again dropped slightly, ranging at around 3.25%. Yield compression has become tangible over the past 12 months, particularly in the communities surrounding Munich. The ongoing favorable general conditions in Germany and particularly in Munich will generate high demand for commercial assets in H2 217 as well. Numerous high-volume deals are already in the advanced stages, again making a transaction volume in the 7bn range realistic by the end of the year. Types of Properties (in %) Industrial & Logistics Mixed use Retail 12 Hotel Building site (commercial) 5 47 Office 33

34 Fast Facts OFFICE LEASING STUTTGART Office Space Take-up 116,1 m² Leasing Take-up 6,1 m² Prime Rent 24./m² Average Rent 13.3/m² Vacancy Rate 2.6% Office Space Stock 7. million m² Achieved Rents STUTTGART /m² 1 City Center /4 Zuffenhausen / Feuerbach Weilimdorf /7 Bad Cannstatt / Wangen.-16. Vaihingen Degerloch Möhringen Fasanenhof Leinfelden-Echterdingen Stuttgart Office Leasing Take-up Take-up on the Stuttgart office leasing market (including Leinfelden-Echterdingen) in H1 217 exceeded previous year results, posting around 116,1 sqm. Two owner-occupiers from the manufacturing industry, however, were responsible for almost half of total take-up (around 56, sqm). As a result, take-up excluding owner-occupiers (6,1 sqm) underperformed previous year results significantly, down roughly 46, sqm yoy. This relatively low outcome can be attributed to moderate market activity and the absence of large-scale leases. With a total of 11 leases signed, leasing activity was considerably down compared to H1 216 (152 leases signed). 295 Ditzingen Gerlingen Weilimdorf 5 1 Korntal 4 Stammheim 295 Feuerbach Zuffenhausen Münster Mühlhausen 6 Bad Cannstatt 14 Remseck am Neckar Waiblingen Fellbach 2 Botnang 1 Innenstadt Stuttgart 27a 7 Wangen Untertürkheim Obertürkheim Vaihingen 3 14 Degerloch 9 Möhringen 27 Hedelfingen Sillenbuch Ruit Esslingen am Neckar 1 1 Fasanenhof 11 Birkach Plieningen 12 34

35 We also saw the complete absence of large-scale leases in the space segment of 5, sqm and up in the first half of 217. Rents The largest number of leases signed (17, sqm) involved rents of between 1.1 and 12.5 per sqm, reflecting a share of around 2%. The mid-range segment ( per sqm) came in second, accounting for roughly 14,4 sqm (24%). The segment of less than 1. per sqm generated an even smaller share yoy at 1.4%. Tenants took up roughly,9 sqm of space going for over 17.5 in properties mainly located in downtown areas. Average rents recorded a yoy increase of 1. per sqm to 13.3 per sqm at mid-year. Tenants continue to pay the highest rents in the Stuttgart City submarket with prime rents continuing to rise over the past 6 months to a current 24. per sqm, the highest ever recorded on the Stuttgart office leasing market. Supply and Vacancy Recorded at a low 2.% at the end of 216, vacancy continued its downward trajectory in H Only 26,1 sqm was available for lease at the end of June with total stock at roughly 7. million sqm. This reflects a vacancy rate of around 2.6%, the lowest we have seen in the past sixteen years. Space available in the Stuttgart City submarket has dropped by almost 7, sqm to a current 25, sqm in the past six months with the City Center submarket recording a decrease in available space of roughly,7 sqm to a current 3, sqm. With pre-lease rates for completions in 217 at over 93%, we do not expect vacancy to increase over the next several months. Key Developments The Lautenschlager Areal property development at Friedrichstraße/Lautenschlagerstraße by LBBW will bring around 7, sqm of office space to the market with completion in Q4. THEO 9 located on Cityring is being fully renovated with roughly 3,3 sqm of office space ready for occupation in Q The ground floors of both properties will feature gastronomy and retail. Eberhardhöfe on Eberhardstraße is also under construction in the City submarket with around 4,1 sqm of office space scheduled for completion by Q3 21. The next construction phase (STEP.3) in the ongoing development of the Stuttgart Engineering Park (STEP) in Stuttgart Vaihingen will encompass around 6, sqm of new office space. The Center for Solar Energy and Hydrogen Research Baden-Württemberg (ZSW) is already occupying 1, sqm at STEP. Other noteworthy developments include Skyline (11, sqm) located at Pragsattel, one of Stuttgart s most important traffic hubs, and an office development featuring around 22,9 sqm pre-leased to Robert-Bosch GmbH. Alexander Rutsch Senior Consultant Research alexander.rutsch@colliers.com Office Space Take-up in 1, m Prime and Average Rents (in /m 2 ) Vacancy Rate (in %) and Vacancy (in 1, m 2 ) st Half-year Prime Rent 4.9% Whole year 4.2% % Average Rent 2.% Forecast for the entire 217 1st HY % 26 1st HY

36 Summary and Outlook The Stuttgart office leasing market continues to be in good shape and can currently be characterized as very landlord-friendly with a shortage of supply coloring both the market environment and asking rents. Nevertheless, we expect strong leasing performance in H2 and estimate that total takeup will hit the 25,-sqm mark in 217. Fast Facts INVESTMENT STUTTGART Transaction Volume 611 million Largest Group of Buyers Asset managers / Fund managers 37% Largest Group of Sellers Opportunity funds / Private equity funds 2% Most important Property Type Office 9% Prime Yield Office 3.% Commercial Transaction Volume (in million ) st Half-year 1,2 Whole year 1,695 1,913 1, Forecast for the entire 217 Investment Transaction Volume The Stuttgart commercial investment market considerably exceeded previous year results of 3m with a total transaction volume of 515m in Q2 217, a clear sign that demand remains strong. Despite a rather slow start to the year in Q1 ( 96m), transaction volume caught up with H1 216 results, posting 611m in H High-volume office investments dominated the deal landscape in the first half of the year. Examples include Mercedes-Benz Bank headquarters at Pragsattel in Stuttgart, which was sold by global real estate investment firm Hines to the Baden- Württemberg Foundation, Canadian REIT Dream Global s acquisition of the downtown Bollwerk office building and the sale of an office building in Stuttgart Weilimdorf currently under lease to Porsche by American investment firm Cerberus. In light of the fact that investment activity remains strong, yields remained stable during the first half of the year and continued to fall in some areas. The core segment, which is preferred by risk-averse investors primarily using own equity, also experienced ongoing yield compression. Prime office yields were last recorded at 3.% and at 3.3% for downtown retail assets. Investors took advantage of current yield compression in the core segment to list properties after only a brief holding period. The slight increase in interest rates on the financial markets failed to impact the value add segment, where investors usually use higher leverage ratios, with yields remaining stable. Buyer and Seller Groups Asset/fund managers were the most active buy side, accounting for around 37% of total commercial transaction volume, followed by REITs and the public sector. The unusually high share generated by the two latter investor groups can be traced back to the two high-volume acquisitions, Mercedes-Benz Bank headquarters and Bollwerk. Activity sell side showed a broader distribution with private equity funds, REITs and listed property companies each claiming around 2% of total commercial transaction volume. 36

37 Similar to 216, the first half of the year was characterized by lively foreign investor activity, with foreign investors accounting for just shy of 5% both buy and sell side. These results can particularly be attributed to the high volume generated by single asset deals involving this investor group. Investment Assets The office asset class claimed an unusually high share of commercial transaction volume in H1 at 9%, primarily due the current supply situation on the market. Investors tended to focus their office investment activity in the north of Stuttgart, an area previously less popular than the city center and the city s southern districts. The majority of deals involved stock properties listed after completion of asset management measures. No investments were made in property developments due to lack of availability. Neither single assets nor property developments were available for acquisition on the Stuttgart retail, hotel or logistics markets in H Investment Highlights The core and core+ segment again generated the highest share in commercial transaction volume in H1 (around 6%). This can primarily be attributed to the acquisition of Mercedes-Benz Bank headquarters at Pragsattel in Stuttgart, which was sold by Hines to the Baden-Württemberg Foundation, and Canadian REIT Dream Global s acquisition of the downtown Bollwerk office building. The sale of an office building in the north currently under long-term lease to Porsche also belongs to this segment. Summary and Outlook With the investment market continuing to enjoy favorable overall conditions and both German and foreign investors still confident in the Stuttgart region as an economic hub, we can expect investment activity to remain lively during the second half of the year. Due to the shortage of adequate investment opportunities, we expect yields in the core segment to fall slightly by the end of the year and yields for value add investments to stabilize. Some vendors will be likely to take advantage of ongoing yield compression to list properties after only brief holding periods. However, holding periods will most likely lengthen again in the medium term. We expect 217 to pull in a transaction volume of over 1.5bn. Transaction Volume by Buyer Group (Millions of ), Share (in %) Asset managers / Fund managers Public administration REITs Opportunity funds / Private equity funds Open-ended real estate funds / Special funds Other investors REITs Listed property companies Banks Closed-ended real estate funds Other investors Transaction Volume by Seller Group (Millions of ), Share (in %) Opportunity Fonds / Private Equity Fonds Types of Properties (in %) 1 Industrial & Logistics Hotel 1 Retail Building site (commcercial) Office 37

38 Glossary Take-up of Space Take-up of space is the sum of all spaces either newly let, sold to owner-occupiers, or built for or by an owner-occupier within the period under consideration. The salient date is that on which the lease or purchase agreement is signed. The renewal of an existing lease is not counted in the take-up of space. Leasing performance Leasing performance reflects take-up excluding owner-occupied space. Prime Rent The premium rent represents the median of the top 3% of new lets (not counting owner-occupiers) during the 12 months just ended. Average Rent The average rent is calculated by taking the individual rents agreed to in all new leases, weighting them by the amount of space rented and computing the mean value. Vacancy Vacancy is defined as all office space available for occupation within three months. Prime yields Prime yields are the best return that can be realized for a property of highest quality and in the best location when leased under usual market conditions (highly solvent tenant). The figures here are gross yields. 3

39 Contacts Matthias Leube Chief Executive Officer Head of Capital Markets Wolfgang Speer Head of Office & Occupier Services Ulf Buhlemann FRICS Head of Portfolio Investment & Advisory Susanne Kiese Head of Research Berlin Budapester Straße 5 D 177 Berlin Phone Dusseldorf Königsallee 6 C Entrance Grünstraße D 4212 Düsseldorf Phone Frankfurt Thurn-und-Taxis-Platz 6 D 6313 Frankfurt am Main Phone Hamburg Burchardstraße 17 D 295 Hamburg Phone Munich Dachauer Straße 63 D 335 München Phone Stuttgart Königstraße 5 D 7173 Stuttgart Phone Photo credits Front page: Alstria Office Reit-AG Photo credits inside pages Page 3, 4, 3, 39 Fotolia Page 5 istock Johnny Greig Berlin Palais Holler, Kurfürstendamm 17 Düsseldorf Fotolia Frankfurt TRIANON Mainzer Landstraße 16, Colony NorthStar, Inc. Hamburg Fotolia-powell3 Cologne Fotolia-Lars Böske Munich Thinkstock, Fotograf: Michael Abid Stuttgart Caleido Stuttgart, Hines Immobilien GmbH 39