Year on year, take-up of industrial, warehousing and logistics space in Hamburg and its environs rose by about a third in 2015 to a total of 590,000 m². Figures from property services provider Grossmann & Berger reveal an actual letting total of 423,000 m² in 2015; owner occupiers accounted for some 28% of overall take-up, a proportion very similar to that seen in 2014. 4th quarter take-up of industrial, warehousing and logistics properties in Hamburg and its environs was 128,000 m². “Take-up of space has shot up to surpass the five-year average of some 560,000 m². Unlike previous years, however, most of the activity was registered in the second and third quarters,” says Stefan Harder
, head of the industrial, warehousing and logistics properties division at Grossmann & Berger.Letting market: Large-scale transactions double, higher turnover within city limits
Logistics/industrial property investments: Volume of transactions doubled
- Transactions by size category: In 2015 market activity in Hamburg and its environs was characterized by a high number of transactions for large amounts of space. Grossmann & Berger noted a total of 38 agreements for more than 5,001 m² of space (2014: 17), of which eleven fell into the 10,001 m² or more category (2014: seven). By space occupied, the largest agreement in 2015 was for 30,600 m² of logistics space plus around 1,000 m² of offices in the Prologis Park Hamburg-Waltershof (Am Genter Ufer 6, sub-market Hamburg South), let to a food logistics company in the 1st quarter. In the 3rd quarter the industrial enterprise Still signed the second-biggest agreement of the year, a pre-letting contract for some 25,000 m² of space in a project development (Billbrookdeich 2-10, sub-market Hamburg East). The biggest new contract in the 4th quarter of 2015 was concluded by HerstRäder-Vogel, a manufacturer of wheels and castors, for 10,900 m² of space (Bredowstraße 20, sub-market Hamburg East). The biggest owner-occupier agreement of 2015 related to 18,000 m² of space at Lanzstrasse 1 in Buchholz in der Nordheide (sub-market South West Environs) purchased by a tobacco goods company.
- Take-up of space by size categories: The two largest segments of the market together accounted for 358,800 m² or over 60% of total take-up of space. Unlike the situation in 2014, some 32% of total take-up, or 188,900 m², concerned premises in the 5,001 to 10,000 m² category, which recorded the biggest year on year rise of about 111%. The second-biggest size segment was that over 10,001 m², with a 29% share of take-up (169,900 m²). In 2014 the second-biggest share (around 26%) of take-up had fallen to the 1,001 to 3,000 m² size category, but by the end of 2015 this segment had slipped to third place with about 19% (109,700 m²).
- Rents: By the end of 2015 the average rent for industrial, warehousing and logistics space in Hamburg and its environs had risen twenty cents above the level in the previous year to €4.80/m²/month. The premium rent rose too, climbing ten cents to €5.70/m²/month. Harder remarks that, “there was a significant shift in take-up of space in the rent categories €4.00/m²/month or less and €5.15/m²/month or more, and this explains the rise in rental rates.”
- Take-up of space by industry: Over the course of 2015 take-up was distributed very evenly between logistics/forwarders (35.1%) and trade (31.7%). “All of the eight biggest agreements in 2015 were signed by companies from these two sectors,” says Harder. In the previous year the largest share of take-up, 47%, was attributable to logistics/forwarding companies.
- Take-up of space by sub-markets: Whereas 2014 ended with Hamburg and Hamburg Environs accounting for half of take-up each, 2015 saw a marked shift towards space within city limits, where the year closed with 69% of the total. The two sub-markets Hamburg East (28.8%) and Hamburg South (26.5%) accounted for the largest volumes of take-up. Eight of the eleven largest agreements by space taken were concluded in these markets. With shares of about 10% each, the next-highest levels of take-up were seen in North West Environs and South West Environs. These results owed much to six agreements for between 5,500 and 7,000 m² of space in North West Environs and the previously mentioned tobacco goods trading company’s purchase of 18,000 m² in Buchholz in der Nordheide (South West Environs).
The volume of investment transactions in logistics and industrial properties in Hamburg and its environs totalled some €310m in 2015, a good 100% higher than in 2014. This enormous increase results, first and foremost, from the sale of the H&M logistics centre in Hamburg-Allermöhe for a sum in the low three-digit millions. With the exception of this “outlier” transaction with a 5.5% yield, the premium return on logistics and industrial property investments in Hamburg was 6.0% by the end of 2015, down from 6.9% a year before. “The premium yield is therefore only slightly higher than the national average of 5.8%” says Harder
on the relative significance of this figure.
Germany’s political and economic stability keeps the demand for logistics property investments high. “Because premium yields remain around 200 basis points higher than the returns on office and retail properties, and because interest rates are likewise stubbornly low, industrial, warehousing and logistics properties will continue to play an important role in 2016, when national and international investors are choosing assets for their portfolios. How far the record result of 2015 can be topped this year will crucially depend on the market availability of other large portfolios,” says Harder
.Letting market: Outlook 2016
“In view of an economic environment that will probably change very little, the take-up of industrial, warehousing and logistics space in Hamburg and environs should total around 525,000 m² in 2016,” predicts Harder
. “Even though Hamburg will not be hosting the Olympic Games, it is not to be expected that companies will find the sort of commercial properties they are looking for inside Hamburg city limits within the near future. Because work is due to start on a variety of development projects that include some speculative space in the environs (South East and South West) and in view of unabated demand for space we expect to see more take-up activity shifting south beyond city limits. This process will be helped by the fact that practically all of the empty space and new developments in Hamburg Port (sub-market Hamburg South) were let in 2015.”
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