Realogis publishes Germany’s H1 2020 rental map for logistics properties

Realogis, a property consulting company for industrial and logistics properties and business parks in Germany, with 70 experts, has published its latest nationwide rental map for logistics properties. It is based on actual rents offered by lessors, updated daily.

The H1 2020 rental map for logistics properties from Realogis is relevant to companies in the retail, e-commerce, commercial and production sectors as well as to institutional and private investors and municipalities. Realogis analysed current rent payments for new and existing properties at a total of 32 German logistics locations.

Rents paid in the top eight logistics markets: rising rents in six markets
Changes were observed in six of the eight top logistics property markets. In the Hamburg metropolitan region, the starting price for functional existing properties climbed by 22.22 per cent from EUR4.50 per sq m in the previous quarter to EUR5.50 per sq m. The change in the Berlin metropolitan region also relates to existing properties. Whereas in Q1 2020 the rent range was EUR4.10-6.00 per sq m, the gap widened to EUR3.55-6.50 per sq m in Q2 2020 (lower limit down 13.41 per cent, upper limit up 8.33 per cent). In Munich, the changes relate to new logistics properties, for which the range increased from EUR6.35-7.25 per sq m (Q1 2020) to EUR6.45-7.95 per sq m. Starting rents in the Bavarian metropolitan region thus grew 1.57 per cent more expensive, while prime rents rose by 9.66 per cent.

In Düsseldorf, rents increased for both new and existing buildings. According to Realogis, the range for existing properties is EUR4.40-4.95 per sq m (Q1 2020: EUR4.30-4.75 per sq m), while for new buildings it is EUR5.30-5.95 per sq m (Q1 2020: EUR5.00-5.70 per sq m), meaning that the starting price rose by 6 per cent. The picture is similar in Cologne, where the starting price was up 5 per cent (from EUR4.00 per sq m to EUR4.20 per sq m). For new buildings, the entire range has moved upward compared to Q1 2020, with the starting price rising by 7.37 per cent from EUR4.75 per sq m to EUR5.10 per sq m while the prime rent has risen by 5.45 per cent from EUR5.50 per sq m to EUR5.80 per sq m. In the Ruhr region, slight increases from EUR3.30-3.90 per sq m to EUR3.40-3.95 per sq m were recorded for existing properties. New buildings, by contrast, posted more substantial changes: the starting price climbed by 10 per cent (from EUR4.00 per sq m to EUR4.40 per sq m) and the prime rent by 5.15 per cent (from EUR4.85 per sq m to EUR5.10 per sq m).

Looking at the other logistics markets in northern Germany (besides Hamburg), Kassel stands out in particular: Realogis recorded a 17.07 per cent rise in prime rent for existing properties here (from EUR4.10 per sq m to EUR4.80 per sq m). In Braunschweig, prime rents increased both for existing properties (up 11.69 per cent at EUR4.30 per sq m) and for new buildings (up 2.22 per cent at EUR4.60 per sq m; Q1 2020: EUR4.50 per sq m). The prime rent for existing properties in Hanover/Langenhagen came to EUR5.35 per sq m in Q2 2020, compared with the previous EUR4.90 per sq m (up 9.18 per cent). Bremen and Bielefeld saw increases in rents for existing properties, with the prime rent up 6.67 per cent in Bremen (EUR4.80 per sq m, Q1 2020: EUR4.50 per sq m) and the starting price up 2.22 per cent in Braunschweig (from EUR3.30-3.90 per sq m in Q1 2020 to EUR3.40-3.95 per sq m in H1 2020).

By contrast, the rental markets in eastern Germany are almost unchanged. Only in Leipzig did the rent range change from EUR3.50-4.50 per sq m to EUR3.80-4.60 per sq m for new buildings and from EUR3.00-4.00 per sq m to EUR3.20-4.30 per sq m for existing properties.

Rents in southern Germany have also remained largely similar and stable. There were minor adjustments in the starting price for new buildings, as there are essentially no new buildings for under EUR4 per sq m in Bavaria any more. Starting prices for new buildings increased in the Dingolfing area (up 7.69 per cent from EUR3.90 per sq m to EUR4.20 per sq m) as well as in Würzburg (up 5.26 per cent from EUR3.80 per sq m to EUR4.00 per sq m) and Ingolstadt (up 2.22 per cent: from EUR4.50 per sq m to EUR4.60 per sq m). The prime rent rose by 1.96 per cent in Würzburg (from EUR5.10 per sq m to EUR5.20 per sq m) and by 4.84 per cent in Ingolstadt (from EUR6.20 per sq m to EUR6.50 per sq m).

“The Munich metropolitan region is already the most expensive logistics location in Germany. If things stay as they are – and the big wave of insolvencies forecast by some does not materialise – we expect to see rent increases of 5 per cent to 10 per cent in the next few months. As always, the closer to the centre, the more expensive the rent,” says Clemens Kerscher, Managing Director of Realogis Immobilien München GmbH.

“We anticipate a slight increase in rents in the Hamburg region. Firstly, we expect to see stronger demand as of the end of 2020, which will also last throughout 2021. At the same time, space is still in short supply and large-volume new development projects that would provide users with modern space for their orders are not possible either due to a lack of land,” reports Jörg Lojewski, Managing Director of Realogis Immobilien Hamburg GmbH. “In Hamburg, we anticipate rent ranges between EUR6.10 and EUR6.30 per sq m for new buildings and between EUR5.50 and EUR6.70 per sq m for existing properties,” adds Stefan Imken, also a Managing Director of Realogis Immobilien Hamburg GmbH.

“Rents will rise, although this will mainly be on account the ‘cheap’ properties being let and therefore no longer being available. As a result, the average rent will automatically increase – we anticipate a rise of around EUR0.20 to EUR0.40 per sq m,” says Ben Dörks, Managing Director of Realogis Immobilien Berlin GmbH. “In addition, prices for new space in the surrounding area in particular will climb from around EUR3.90-4.20 to EUR4.20-4.90 per sq m, with the business park segment seeing sizeable increases. Here, rents of around EUR10 per sq m are often demanded now for very central areas of the city and hardly anything is available for less than EUR6 per sq m.”

“We expect the prime rent in the Düsseldorf, Mönchengladbach and Lower Rhine sub-market to settle at around EUR6.00 per sq m and thus change only slightly in comparison to the current year,” says Bülent Alemdag, Managing Director of Realogis Immobilien Düsseldorf GmbH.

“In the logistics markets in northern and eastern Germany, the basic price for logistics rents is rising. In the automotive region Kassel, around 50,000 sq m of new space is being added to the market, causing prices to develop aggressively at the moment. New buildings are also to be added in Hanover. We generally anticipate an increase of 20 per cent for just some individual project developments, with the nationwide average around 10 per cent. However, the medium- and long-term trends on the property market remain to be seen and will only start to reveal themselves over the next few months,” says Christian Beran, Managing Director of Realogis Immobilien Deutschland GmbH and responsible for the northern and eastern Germany markets.

“For the logistics regions in the south of Germany, I expect rents to remain around the same level in the months ahead,” says Florian Stork, Managing Director of Realogis Immobilien Deutschland GmbH and responsible for southern Germany. “But this may change from the first or second half of 2021 onwards. In the long term, I anticipate a clear increase in rents.”