MARKET REPORT 2017/2018. Accelerating success. Office and Investment Market Düsseldorf

Transcription

1 MARKET REPORT 201/2018 Accelerating success. Office and Investment Market Düsseldorf

2 Market Overview Office Leasing TOP BERLIN DÜSSELDORF FRANKFURT HAMBURG COLOGNE MUNICH STUTTGART STOCK OF OFFICE SPACE in million sq m OFFICE SPACE TAKE-UP 4,156,00 93, ,000 10, , , , , in sq m Change year-on-year in % OFFICE SPACE TAKE-UP 3,16, , , ,00 505, ,000 18, ,600 (for the entire year) 10-year Ø PRIME RENT in /sq m AVERAGE RENT in /sq m VACANT OFFICE SPACE in sq m 3,652, , ,400 1,104, , , , ,600 VACANCY RATE in % Change year-on-year in basis points The data for Berlin, Düsseldorf, Hamburg and Cologne are related to the respective city area. The data for Frankfurt, Munich and Stuttgart are related to each of the respective markets on the whole. Investment GERMANY TOP BERLIN DÜSSELDORF FRANKFURT HAMBURG COLOGNE MUNICH STUTTGART TRANSACTION VOLUME 5,289 29,954,522 2,40 6,912 3,410 2,000 6,10 1, in million Change versus prior year in % TRANSACTION VOLUME (for the entire year) 10-year Ø PRIME YIELD OFFICES in % PRIME YIELD HIGHSTREET RETAIL in % PRIME YIELD INDUSTRIAL & LOGISTICS in % 33,66 18,490 4,090 1,538 3,90 2,912 1,110 4, * *) Refers to the defined logistics market areas 2 Market Report 201/2018 Düsseldorf Colliers International

3 City Facts DÜSSELDORF Population in 1, Employees Paying Social Se cu rity Contributions in 1,000 Fast Facts OFFICE LEASING DÜSSELDORF 201 Change vs. prior year Office Space Take-up 333,000 sq m -9.0 % Leasing Take-up 322,200 sq m % Prime Rent 2.00/sq m 1.9 % Average Rent 15.40/sq m 3.4 % Vacancy Rate.0 % -50 bp* Office Space Stock.60 m sq m -0.5 % Achieved Rents 409 Unemployment Rate in % 6.9 Per Capita Disposable Income in 2,13 Office Leasing Take-up The Düsseldorf office leasing market generated 333,000 sq m in take-up in 201, falling short of its excellent previous-year result by 9 %. A total of 450 leases were signed, six of which by owner-occupiers. Despite the remarkable number of largescale leases signed, 201 results could not quite keep up with those posted in. This can be attributed to the yoy decline in take-up involving medi-um-sized units. Nonetheless, 201 results did prove above-average, beating the 10-year average by almost 4 %. Eleven leases were signed in the space segment of 5,000 sq m and up (96,200 sq m), reflecting a yoy increase of roughly 3 %. All other space segments experienced a yoy drop. The small-space segment (up to 500 sq m) saw the most moderate decline (-8 %) with take-up at 80,800 sq m. The space seg- DÜSSELDORF Price range in / sq m Average rent in /sq m 1 CBD Ratingen 2 City Center Harbor Area Kennedydamm Left of the Rhine D-North Meerbusch Unterrath 6 52 Airport City Grafenberger Allee City Center East D-South *) basis points Heerdt 5 4 Oberkassel 3 Derendorf 8 Golzheim Pempelfort Altstadt 2 1 Düsseldorf CBD 1 Friedrichstadt Mörsenbroich 2 8 Grafenberg 9 Neuss Market Report 201/2018 Düsseldorf Colliers International 3

4 ment of between 1,001 and 2,000 sq m took a 16 % hit to a current 53,400 sq m. The two remaining space segments registered even higher drops. The space segment of between 2,000 and 5,000 sq m felt the strongest impact (-34 %) while the space segment of between 501 and 1,000 sq m was down by almost 24 %. The following submarkets generated the highest office take-up results: Linksrheinisch (6,000 sq m), City Center (64,600 sq m) and Düsseldorf Nord (5,500 sq m). The CBD posted 32,500 sq m, in line with previous-year results. Across all space segments, tenants were mostly interested in three submarkets. Boosted by a large-scale lease signed by HSBC for a property on Hansaallee, the Linksrheinisch submarket took pole position with 6,000 sq m (64 leases signed). Almost twice as many leases were signed in the City Center submarket, which saw take-up totaling at 64,600 sq m. Düsseldorf Nord also recorded strong results with around 5,500 sq m and 68 leases signed. Rents Düsseldorf CBD prime rents were on the rise in Q The Kö-Quartier property development saw several high-volume leases signed, bringing prime rents up yoy by 2 % to a current 2.00 per sq m. We expect to see similar rent levels in Solid take-up results and the reduced vacancy that co-mes with lively leasing activity also caused average rents for new leases to spike almost 4 % yoy to a current per sq m. That puts weighted average rent in the Düsseldorf municipal area at an all-time high. Supply and Vacancy The remarkable reduction in excess supply in Düsseldorf continued in 201 in the wake of solid take-up results. Take-up at year-end was recorded at 532,400 sq m, reflecting a vacancy rate of.0 % (down 0.5 percentage points compared to yearend ). Space available for sublease only played a minor role at just shy of 10,000 sq m. The Linksrheinisch and Düsseldorf Nord submarkets continued to exhibit the highest vacancy with 131,600 sq m and 118,500 sq m available, respectively. 31,600 sq m is currently available for immediate tenancy in the CBD, reflecting a vacancy rate of 4. %. Only slightly less than 12,000 sq m, however, can be classified as grade A quality. Key Developments Completions in 2018 (almost 9,000 sq m) are not expected to significantly impact vacancy rates as almost 5 % of this space has already been pre-leased. An additional 50,000 sq m of office space is expected to hit the market in 2019, almost half of which has already been pre-leased or taken up by owner-occupiers. The majority of new property developments are focused around the Harbor and CBD/City Center submarkets. Office Space Take-up in 1,000 sq m Vacancy Rate (in %) and Vacancy (in 1,000 sq m) 1, Prime and Average Rents (in /sq m) % 10.4% % %.0% Leasing Owner-occupiers Completion Volume (in 1,000 sq m) and thereof Pre-let/Owner-occupied Completions thereof Pre-let/Owner-occupied Prime Rent Average Rent 4 Market Report 201/2018 Düsseldorf Colliers International

5 Summary and Outlook The Düsseldorf office leasing market recorded a decent, slightly above-average take-up result in 201. Prospects remain favorable. We expect take-up results to once again exceed the long-term average with at least 330,000 sq m. Vacancy in Düsseldorf is expected to drop further in light of high pre-leasing rates for property developments. This could lead to additional moderate rent hikes affecting prime rents as well as weighted average rents. Fast Facts INVESTMENT DÜSSELDORF 201 Transaction Volume in million 2,40 2,180 Portfolio Transactions 19 % 18 % Share by International Buyers 56 % 53 % Share by International Sellers 50 % 16 % Most Important Property Type Office: 80 % Office: 65 % Prime Yield Office 3.5 % 4.15 % Investment Transaction Volume With a breathtaking finish to the year ( 1.2 bn in Q4 alone), the Düsseldorf commercial investment market set a new record high. The city recorded a total investment volume of 2.4 bn in 201, reflec-ting an almost 26 % increase yoy and a % increase from the previous all-time high of 2.55 bn recor-ded in. If we include all 201 deals from the neighboring cities of Ratingen and Neuss, transac-tion volume for greater Düsseldorf surpassed the 3 bn mark for the first time. Commercial Transaction Volume (in million ) 3,000 2,500 2,000 1,500 1, Types of Properties (in %) Hotel Industrial & Logistics Building Site (commercial) 1,920 1, Retail ,550 Other 80 2,180 Office 2, This result was bolstered by four large-scale deals in the nine-figure range, e.g. the sale of Vodafone headquarters and the New Office development with HSBC as main tenant (both located in the Links-rheinisch submarket). 20 deals changed hands in the 30 to 100 million euro range and contributed their fair share to the record result. Supply and Demand Office deals were dominant in 201, accounting for 80 % of total transaction volume. The 20 largest transactions involved office assets with only two exceptions. Retail assets and commercial assets followed in the ranks at around 200m and 160m, respectively. Investor interest particularly revolved around the City Center and Düsseldorf Nord submarkets. The Kennedydamm submarket deserves particular mention, generating almost 400m in transaction volume. The two centrally located City Center and CBD submarkets accounted for roughly 850m in transaction volume. German and foreign asset/fund managers dominated buy-side with 1.1 bn in transaction volume. Pro-perty developers/development companies followed suit at 450m, an impressive testament to Düssel-dorf s future development potential. Open-ended real estate funds and special funds generated a simi-lar result at 430m. Opportunity funds/private equity funds dominated sell-side at 640m followed by asset/fund managers at 50m. Market Report 201/2018 Düsseldorf Colliers International 5

6 Foreign investors once again matched their previous-year results, snapping up assets for more than 1.5 bn, or 56 %. Asian investors played a more significant role on the Düsseldorf market for the first time in 201. The Quantum Group acquired the North Rhine-Westphalian Ministry of Interior and Community Affairs on behalf of Korean institutional investors managed by Capstone Asset Manage-ment. South Korea-based Mirae Asset Global Investments acquired Vodafone headquarters. Other major foreign players came from France, the UK, the US and Israel. Numerous foreign investors were active sell-side as well, accounting for half of total transaction volume. Yields Prime office yields significantly dropped during 201 to a current 3.5 %, or 40 bp yoy. This applies exclusively to absolute prime CBD locations, but 4.0 % is realistic in very good downtown locations as well. Prime properties in top locations in the Kennedydamm and Hafen submarkets are also offering yields of up to 4.0 %. Summary and Outlook Demand for Düsseldorf commercial real estate in all risk classes remained strong in 201, resulting in a new all-time high. The 10-year average (approx. 1.5 bn) was exceeded by 8 % thanks to an excep-tionally impressive end-of-year rally. We expect activity on the Düsseldorf market to remain high in 2018 as well and to reflect the current record result despite scarce supply in the core segment. Transaction Volume by Buyer Groups (in million, share in %) Asset managers / Fund managers Property developers Open-ended real estate funds / Special funds Pension funds Opportunity funds / Private equity funds Other investors ,000 1, % 16 % 16 % 10 % 3 % 14 % Transaction Volume by Seller Groups (in million, share in %) Opportunity funds / 23 % Private equity funds Asset managers / Fund managers Property developers Open-ended real estate funds / Special funds Corporates / Owner-occupiers 21 % 16 % 9 % 8 % Other investors 23 % Lars Zenke Director Research lars.zenke@colliers.com 6 Market Report 201/2018 Düsseldorf Colliers International

7 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. Photo credits Front page Colliers International Deutschland GmbH Photo credits inside pages Page 2, 3 Fotolia Page istock, william8 Market Report 201/2018 Düsseldorf Colliers International

8 403 offices in 68 countries on 6 continents United States: 153 Canada: 29 Latin America: 24 Asia Pacific: 86 EMEA: 111 Contact: Lars Zenke Director Research lars.zenke@colliers.com Colliers International Deutschland GmbH Königsallee 60 C/Eingang Grünstraße Düsseldorf billion global turnover 95 billion in transaction volume with more than 80,000 investment and leasing deals 10 million sq m under management Over 15,000 professionals About Colliers International Colliers International Group Inc. (NASDAQ: CIGI; TSX: CIG) is a global leader in commercial real estate services with more than 15,000 professionals operating from 403 offices in 68 countries. With an enterprising culture and significant insider ownership, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide. Services include brokerage, global corporate solutions, investment sales and capital markets, project management and workplace solutions, property and asset management, consulting, valuation and appraisal services, and customized research and thought leadership. Colliers International has been ranked among the top 100 outsourcing firms by the International Association of Outsourcing Professionals Global Outsourcing for 10 consecutive years, more than any other real estate services firm. For the latest news from Colliers International, visit Colliers.com, or follow us on and LinkedIn. To see the latest news on Colliers International in Germany follow colliers.com Copyright 2018 Colliers International Deutschland GmbH This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Colliers International and/or its licensor(s) All rights reserved.