Take-up of space in industrial, warehousing and logistics properties in Hamburg and the environs totalled some 133,000 m² in the early part of 2016, a year-on-year increase of around 50%. The figure was thus close to the record result in 2011 (Q1: 135,000 m²). Year on year, owner-occupiers’ share of take-up remained very similar at about 17% (22,000 m²). “The positive mood on the market compared with the prior year has been translated into some 110,000 m² of newly let space and 40 agreements,” remarks Stefan Harder
, head of the industrial, warehousing and logistics properties division at Grossmann & Berger.Letting market: Very good result owes much to the mid-sized segment
Logistics/industrial property investments: Premium yield stable or trending lower
- Completions: Grossmann & Berger registered a total of some 40 agreements, eight of which were contracts for more than 5,001 m² of space (seven in 2015), but none for over 10,001 m² (two in 2015). The biggest rental contract of the 1st quarter of 2016 was signed by LZ Logistik GmbH for some 10,000 m² of logistics space in a new-build in Neu Wulmstorf (Neue Oldendorfer Strasse, sub-market South-West Environs.) The logistics company Kühne & Nagel also rented about 10,000 m² of logistics space in an existing building in Altenwerder (Altenwerder Hauptstrasse 11-23, sub-market Hamburg South).
- Take-up of space by size categories: At the start of the year 2016, most of the market activity in Hamburg and its environs concerned the mid-sized segment, with a large number of agreements concluded for between 3,001 and 5,000 m². Year on year, three times as many agreements for mid-sized properties were posted in the 1st quarter of 2016. Some 45% (59,000 m²) of take-up was attributable to properties larger than 5,001 m², and the 3,001 to 5,000 m² size segment accounted for some 31% (40,700 m²).
- Rents: At the start of 2016 both the premium and average rents for industrial, warehousing and logistics space in Hamburg and its environs rose ten cents above the rates in the previous year to €5.70/m²/month and €4.80/m²/month respectively. Harder remarks that, “more take-up of space shifted into the rent categories €4.01/m²/month or more and €4.51/m²/month or more, and this explains the rise in rental rates.”
- Take-up of space by industry: Each accounting for take-up of some 51,000 m² or 38% of the total, logistics firms and trading companies were equally represented on the market. Trailing far behind, “other enterprises” followed with 16% of the total (21,500 m²) and “manufacturing/industry/crafts & trades” took 7% (9,200 m²).
- Take-up of space by sub-markets: In a pattern similar to the prior year’s, some 62% of take-up (82,300 m²) related to premises within Hamburg city limits. Hamburg East and Hamburg South proved to be the most popular sub-markets, accounting for 40% (53,600 m²) and 12% (16,400 m²) respectively. In the environs of Hamburg, where 38% (50,700 m²) of total take-up was registered, the North-West sub-market was the most popular, with a share of 22% (29,100 m²).
At the end of the 1st quarter of 2016 the premium yield for industrial/warehousing/logistics property assets in Hamburg was unchanged from the prior year at 6.00%. “The excess of demand over supply combined with more properties being offered in tender procedures is leading to price increases,” explains Harder
. “As a result, the premium yield is likely to fall below the psychologically important 6.00 per cent mark in 2016. Ever larger amounts of cash are encouraging investors to look at new opportunities such as joint ventures with developers or the large-scale take-over of entire platforms.”Outlook for the letting market in 2016
Now, due to a shortage of building land, customers who require large amounts of hall space - over 30,000 m² - often compromise by taking space in Soltau, Walsrode, Hannover or other sites in central Lower Saxony. But even in the mid-sized sector of 5,000 m² or more, customers do not have adequate development options within Hamburg city limits, despite the decision not to bid for the Olympics and the designation of other areas for commercial use in the medium term. As Harder
says, “sites ready for development in Winsen and Rade can compensate this lack. The slightly higher costs of trucking and transport are largely balanced out by lower rental charges.” In view of the good start to the year and a market for industrial, warehousing and logistics space that is set to remain dynamic in Hamburg, the year 2016 will probably close with a total volume of new lets of around 600,000 m².