Take-up of industrial, warehousing and logistics space in Hamburg and the surrounding districts climbed to some 462,000 m² by the end of the 3rd quarter of 2015. This translates into year on year growth of 54%. Grossmann & Berger calculated a 3rd-quarter turnover of some 181,000 m² of space. “Most of the transactions concluded in the past quarter concerned premises of between 8,000 and 25,000 m² within Hamburg city limits,” sums up Stefan Harder
, head of the industrial, warehousing and logistics properties department of Grossmann & Berger. “By the end of the third quarter the take-up of industrial space in Hamburg was already very close to the ten-year average of about 490,000 m².”Large-properties are in demand
Industrial and logistics investments: premium return subject to mild compression
- Take-up of space by size categories: Grossmann & Berger noted that two size categories – 10,001 m² or more and 5,001 m² or more – accounted for by far the greatest share of take-up, accounting for 37% and 30% of the total respectively. Taking both segments together, some 307,000 m² of industrial, warehousing or logistics property found new occupiers. Properties measuring between 1,001 and 3,000 m² were the most popular size in the same quarter of the prior year, accounting for 29% of the total; however, this segment returned much lower figures in the 3rd quarter of 2015, closing with a share of only 17%. The owner-occupier share was 28%, a year on year decline of ten percentage points. Ten agreements were concluded for more than 10,001 m² of space, double the total for the same quarter of the prior year, while the number of agreements for between 5,001 and 10,000 m² of space rose from eight to 18.
- Largest new agreements: An industrial firm from Billbrook (sub-market Hamburg East) signed a pre-letting agreement for some 25,000 m² of space in a project development, which was the biggest transaction registered in the 3rd quarter. The second-largest new agreement related to 18,000 m² of space at Lanzstrasse 1 in Buchholz in der Nordheide (sub-market South West Environs) purchased for own use by a tobacco trading company.
- Largest agreement: By space occupied, the largest agreement thus far in 2015 was for 30,630 m² of logistics space plus around 1,020 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.
- Rents: Year on year the average rent rose by 10 cents to €4.70/m²/month. “Even though appreciably more space was taken up in properties renting for over €5.01/m²/month, the nominal premium rent is still unchanged at €5.70/m²/month”, says Stefan Harder. “When it comes to letting over 10,000 m² of space, however, the effective premium rate is around €5.55/m²/month.”
- Take-up of space by industry: At the end of the 3rd quarter of 2015, unlike the same period in the prior year, when the largest share of take-up fell to logistics firms/freight forwarders with about 37%, the proportion of space taken up in Hamburg and its environs by trade companies was almost equal to the share taken by logistics firms/freight forwarders at 34% and 38% respectively. Reason: seven of the ten largest transactions were concluded by companies in these two sectors of business.
- Take-up of space by sub-markets: Whereas at the end of the 3rd quarter of 2014 take-up of space was fairly evenly divided between the city and its environs, when the 3rd quarter of 2015 ended it emerged that market activity had been concentrated within Hamburg city limits, which accounted for 70% of the total. The two sub-markets Hamburg East (27.5%) and Hamburg South (27.1%) registered some 55% of the total volume of space taken up because, in terms of space rented, seven of the ten biggest agreements related to properties in these districts. “The four rental agreements in Waltershof and Altenwerder combined to appreciably reduce the vacancy rate in the port area, which had been unusually high in the past 18 months,” explains Stefan Harder.
The volume of transactions involving logistics and industrial properties in Hamburg and its environs reached around €283m by the end of the 3rd quarter of 2015, a marked increase compared with the €150m reported for the whole of 2014. First and foremost this stems from the sale of H&M’s central depot in Hamburg-Allermöhe, purchased by the South Korean state fund for around €123m. The net initial yield for this single transaction was about 5.50%, and due to its large volume, served to compress the cumulative premium return. “Whereas in the first half year this figure was still around 6.25%, it had slipped to 6.00% by the end of the third quarter”, says Stefan Harder. Harder
expects 2015 to end with an investment transaction volume of around €375m for industrial, warehousing and logistics properties in Hamburg and the environs.Outlook for the letting market in 2015
“Because more empty space was taken in the third quarter and land is in short supply overall, there are currently fewer options to complete large real estate transactions inside Hamburg’s borders. Therefore, even though the fourth quarter is traditionally considered the busiest one, we believe that a total of some 550,000 m² is a realistic assessment of total take-up for 2015 in Hamburg and the environs. However, unlike in the first quarter, the effect will not be a further squeezing of the premium rent. The market is being stimulated by potential tenants seeking properties in the South Environs of Hamburg sized between 10,000 m² and 30,000 m².”
The detailed market survey will be ready for download