The market for industrial, warehouse and logistics properties in Hamburg and its environs started the year 2014 with a burst of activity, only to cool noticeably in the 2nd quarter. Property services provider Grossmann & Berger calculates that the take-up of space in the 1st half year totalled some 200,000 m² and thus fell by around 11% compared with the same period a year ago. 81,000 m² of this turnover took place in the 2nd quarter. Owner occupiers accounted for a good 43% of the total in the 1st half year, around 16% below their share in 2013. “The general pattern on Hamburg’s industrial property market with its large proportion of owner occupiers has not in fact changed. What is unexpected, however, is that the forecast growth of demand for rental spaces of 10,000 m² or more failed to materialize,” says Stefan Harder, property consultant for industrial, warehouse and logistics properties at Grossmann & Berger.
More than Half of Take-Up Relates to Leases for Over 5,000 m²
Although in the size segment of 10,001 m² and upwards one more agreement was noted in the first half of 2014 than in HJ 1, 2013, the volume of space involved fell by 18% to 59,000 m². Nevertheless, accounting for 29.5% of take-up of space, this size category noted the second-biggest volume in the 1st half year. The third-largest share of take-up, 45,400 m² (22.7%), was recorded in the segment 5,001 to 10,000 m², meaning that more than half of the space taken up in the 1st half year - 104,000 m² - was to be found in the two largest size categories. The third-biggest lease in the 1st half year - the two biggest were recorded in the 1st quarter - was signed by the City of Hamburg, which acquired some 11,000 m² of space for public cultural facilities (Jacobsenweg 16, Hamburg-West). The mid-sized segment, 1,001 to 3,000 m², generated the highest turnover, posting a 30.4% share of the total (60,800 m²). The next-larger segment, 3,001 to 5,000 m² shrank most of all, its total falling by 51% to 19,800 m².
Logistics Industry Generates Greatest Demand Despite Lower Turnover
Although the logistics/forwarding industry was the biggest single group of clients, accounting for 70,800 m² or 35.4% of take up in the 1st half year, actual turnover fell by a massive 57%. By contrast, the relative shares of take-up of space registered for other industries were far more uniform: Production/industry/trades&crafts (44,600 m²), other companies (42,800 m²) and trade/retail (41,800 m²) each accounted for shares of between 21 and 22%. “The above-average growth rates for trade/retail and production/industry/trades&crafts are due, respectively, to the fourth and second-largest deals in the 1st half year,” says Stefan Harder.
Hamburg South and Hamburg West Top Sub-Markets
Year on year, the distribution of activity by sub-markets is virtually unchanged. Once again, the largest amount of space (124,000 m² or 62%) was taken up within Hamburg city limits, whereas the figures for the environs were 76,000 m² and 38%. “The many mid-sized logistics companies, who are traditionally the biggest customers for space, need halls near the city in order to be as close to the final consumer as possible and to profit from urban infrastructure,” explains Stefan Harder. The two strongest sub-markets were Hamburg South (35,600 m²) and Hamburg West (35,000 m²), each with shares above 17%. “Due to the large-scale transactions made by owner occupiers in Hamburg West and Hamburg North West, these sub-markets recorded disproportionately high growth,” says Stefan Harder. The biggest sub-market outside Hamburg’s borders was Environs South West, whose share of the market reached 14.6% (29,200 m²).
Rents Soften Slightly
Unlike the situation during the same period last year, when rents rose a little due to a shortage of properties, they fell back slightly in the 1st half year. The premium rent* fell by 10 cents to 5.70 €/m²/month, the average rent slipped to 4.60 €/m²/month or 15 cents lower than the 4.75 €/m²/month recorded in the same period a year ago. “Following on from the caution seen in the second quarter we are expecting the market for industrial properties in Hamburg and its environs to make a recovery by the fourth quarter, if not before. If that happens, we think that 425,000 m² is a realistic figure for the total take-up of space by the end of the year. It will, however, depend on whether some of the searches for very large properties result in contracts and, in the case of logistics tenders with short lead times, if Hamburg is preferred to places in Lower Saxony or Bremen,” says Stefan Harder.
*As a rule premium rents are attainable only for new halls that are very conveniently close to supra-local transport networks. Rents of between 4.00 and 4.50 €/m²/month are paid for standard properties typically available inside Hamburg city limits.
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