Hamburg Warehouse and Logistics MarketView

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1 Warehouse and Logistics MarketView H2 212 GDP Q4 GER -.6% Q-o-Q GDP Q3 GER +.2% Q-o-Q IFO BUSINESS CLIMATE INDEX 15.2 Jan. 212 Global Research and Consulting GFK CONSUMER CLIMATE INDEX 5.7 Jan. 212 UR HH 7.6 % Jan. 212 OVERVIEW 1 Quick Stats 212 J/J Take-up thereof H1 212 thereof H2 212 Share of owneroccupier Hot Topics 565,5 sq m 241,6 sq m 323,9 sq m Economic slowdown due to euro-crisis reaches logistics location Letting take-up 212 significantly below the very good result of 211 but nevertheless third best result since 25 As the gateway to the world for Germany s export trade, s port further strengthens its position and is likely to profit from increasing world trade in 213 Letting markets should further stabilise in 213 demand for logistics space is boosted by the online shopping and fashion retail sector Demand for modern warehouse and logistics properties by institutional investors to increase further 33.6% Prime rent 5.7 sq m Prime yield 6.5% Investment volume 14bn Take-up decreases year-on-year With a take-up of 565,5 sq m of warehouse and logistics spaces, the overall volume decreased by around 25% compared to the previous year. The decline can be mainly attributed to the lack of high-quality and basic warehouse and logistics spaces as well as low vacancies and few project developments. Share of owner-occupier increases further The share of owner-occupied take-ups increased by 4%-points to around 34% compared to the previous year. The result was mainly driven by the sale of an around 3, sq m large logistics property to Wellensteyn in Norderstedt as well as the newly developed 25, sq m large PCH Packing Center in Wilhelmsburg. Stable prime rents due to high demand Prime rents for modern warehouse and logistics properties with prime fitout and location qualities remained stable at 5.7/ sq m/month yearon-year. Above average completion volume With 161,9 sq m of warehouse and logistics space, the completion volume of was around 1% above the long-term average (26-212). Investment volume decreases due to lack of adequate assets Investments into the asset class warehouse/logistics/production decreased by around 22% to 14m compared to the previous year. -Waltershof: Container Terminal Burchardkai

2 Q1 2 Q1 21 Q1 22 Q1 23 Q1 24 Q1 25 Q1 26 Q1 27 Q1 28 Q1 29 Q1 21 Q1 211 Q Oct-7 Jan-8 Apr-8 Jul-8 Oct-8 Jan-9 Apr-9 Jul-9 Oct-9 Jan-1 Apr-1 Jul-1 Oct-1 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 H2 212 Warehouse and Logistics MarketView Market environment After a good start to the year, the German economy significantly lost momentum towards the end of the year and Chart 1: Seafreight rate indices contracted by.6%-points compared to the third quarter BDI according to official statistics. The economic growth of one Index =1 of the world s leading export nations was particularly slowed 14, down by the global economic downturn and the financial Baltic Dry Index ConTex 12, crisis in Europe although Germany was able to defy most turbulences caused in the context of the euro-crisis. 1, Germany s largest port,, was confronted with decreasing demand in Germany s import sales market, 8, particularly China. Hence, not only container handling 6, declined by 1.7% to 8.9 million TEU compared to the previous year but also cargo rates in container shipping 4, (ConTex), which had started declining mid-year. Although China registered with 7.8% the weakest economic growth 2, since 1999 in the past year, first indicators point to a fast recovery. The Chinese purchasing managers' index increased for the third month in a row (December 212: 56.1 points) and the lateral movement of the Baltic Dry Index, reflecting the development of cargo rates for dry bulk Source: Baltic Exchange, Shipbroker s Association (VHSS e.v.) (e.g. ores, coal, building materials), also indicate a turnaround of economies worldwide. According to the Chart 2: Port of economic barometer of the Chamber of Container handling volume Commerce 38.6% of all interviewed companies from the German wholesale and foreign trade sector assesses their 1. current state of business increasingly positive. A greater part 9. of all interviewed companies (53.3%) assumes that business outlooks will remain more or less unchanged compared to 8. the current situation, whereas 22.6% see clear signs of 7. growth and 24.1% are less optimistic. Only 2.6% of all Average container handling volume 6. ( ): 5.28 million TEU companies from the export industries assume that export will decrease, whereas 35.3% expect a recovery. The 5. outstanding ruling of the Federal Administrative Court in 4. regard to the deepening of the shipping channel of the River Elbe, which is expected by the end of this year, will also 3. have a significant impact on the local economy. 2. Furthermore, the expansion of the Central Terminal Steinwerder is not to be expected before 22 due to the 1. lease renewal of the Buss group.. ConTex Index =1 1,2 1, Source: Port of Chart 3: Balance 6 s economy barometer Economic sector: Wholesale / export Investment planning Staff planning Economic situtation Economic outlook Source: Chamber of Commerce

3 Chart 4: 1, sq m Take-up Environs Urban area Greater Chart 5: Prime rents Pan-European comparison /sq m/month Annual average (25-211): 492,7 sq m Take-up With a take-up of 565,5 sq m in 212, the market for warehouse and logistics properties saw an above average result. Compared to the record result of the previous year, however, take-up declined by around 25%. Nevertheless, the second half of the year proved to be more dynamic with a take-up of almost 324, sq m, compared to the first six months of 212; a development that might indicate the turnaround of the economy. The majority of all letting transactions (62%) were registered in itself. Due to a number of single lettings by Navigare Schifffahrts GmbH, 18% of the overall take-up (11,8 sq m) was generated in the Billbrook/ Gewerbegebiet submarket. It was followed by the traditionally strong Harburg/Süderelbe submarket with a share around 17.5% (99, sq m), where predominately large lettings in the second half of the year such as by DSV Solutions GmbH (33, sq m) or Spedition Mickeleit (2, sq m) contributed to the submarkets good year-end result. Considering the Greater area, Norderstedt registered, with a share of 22%, the highest take-up. The largest transaction 212 was the purchase of an around 3, sq m large logistics property owner-occupied by Wellensteyn International GmbH in the first half of the year. While the overall number of transactions declined by 3% compared to the previous year, the average warehouse and logistics space let per transaction increased by 8% to 3,9 sq m. Areas for subletting are only of minor importance in the current market; the further economic developments remains to be seen. In addition to medium-term lettings (up to five years), an increase of short-term lettings (up to two years) has already been observed. H2 212 Warehouse and Logistics MarketView Barcelona Lisbon Rotterdam Warsaw Chart 6: Prime rents Comparison Germany München Frankfurt Dusseldorf Amsterdam Helsinki Paris Ile-de-France Valencia Rents The second half of 212 did not see a reversal of the rental price development for warehouse and logistics properties in European logistics centres. While rents further decreased in Southern Europe, Helsinki in Northern Europe registered a slight increase of rents by +.3% year-on-year. Prime rents in the metropolises Paris ( 7.5/sq m/month) and ( 5.7/sq m/month) remained unchanged on the level of the previous year. Despite the lateral movement in the demand for premium areas in prime locations remains high. However, due to the decreasing stock of appropriate warehouse and logistics space, the pressure on prime rents is increasing. Thus, in some locations of the market area first rental prices increase have been registered. 3 Berlin /sq m/month

4 H2 212 Warehouse and Logistics MarketView Completions and pipeline With around 162, sq m completed warehouse and logistics space, the increase in 212 was not as high as in the previous year but still significantly above the long-term average. It, however, becomes apparent that the supply of space is gradually running short. First signs of a similar development are noticeable in the submarkets of the Greater Area. This development is, amongst others, a result of declining numbers of speculative project developments. For 213, however, the pipeline shows first signs of improvement. As things stand, around 225, sq m of new spaces will be added to the warehouse and logistics market, of which, albeit, 92,5 sq m or around 41% are already pre-let or owner-occupied and thus not available on the market. INVESTMENT While the overall volume invested in German warehouse and logistics properties increased from around 9m in 211 to approximately 1.65bn in 212, the investment volume in declined considerably by 22% to around 14m. However, the declining transaction volume cannot be attributed to a waning attractiveness of as investment location. In fact, the demand for suitable investment products by institutional investors has even increased and more dynamic investment activities were only impeded by the lack of available modern, premium and space efficient warehouse and logistics properties. Despite the pressure on demand in regard to investment properties in the warehouse, transport and distribution logistics sector, prime yields remained unchanged at 6.5%. Only Berlin registered a further decline of prime yields by 25 basis points year-on-year. Thus, net initial yields for core products in all five large German logistics centres are at 6.5%. Furthermore, institutional investors are increasingly interested in warehouse and logistics properties as means of risk diversification for their investment portfolios. Particularly special funds are focusing on this asset class. Chart 7: 1, sq m Chart 8: Completions and pipeline Prime yield and transaction volume* million % Annual Average (26-211): 147, sq m Annual Average: (23-211): 141,4m Transaction volume* (million ) Prime yield (%) *Investment volume for city area + environs (list of municipalities belonging to market area see page 5/6) 213F Completed Spekulative Pre-let Owner-occupied Outlook The German economy is only expected to gather significant momentum mid-year 213 and even higher dynamics are only expected for the following year. Nevertheless, a fast recovery is anticipated due to the currently further stabilising situation in the Euro-zone, Germany s most important sales market. The ifo-index for Germany increased in January 213, particularly due to the positive expectations of the interviewed experts in the Euro-zone, for the third time in a row to a present 14.2 points. It also indicates an increased optimistic mood of the interviewed companies in Germany. Real growth of the German economy for 213 is expected to reach.7% and will be mainly driven by strong domestic demand at the beginning of the year which will compensate for the initially weak export sector. Based on these projections we expect that this year s logistics take-up in will develop similarly as in the previous year.

5 Submarket Urban Area Environs Greater Cumulated take-up 212 sq m Future supply sq m Prime rent /sq m/month 351,6 13, ,9 125, ,5 229,3 5.7 H2 212 Warehouse and Logistics MarketView 5

6 H2 212 Warehouse and Logistics MarketView For more information about this MarketView, please contact: Research Germany Dr. Jan Linsin Senior Director Head of Research Germany Bockenheimer Landstr Frankfurt t: e: Frank Sgonina Analyst Valentinskamp t: e: frank.sgonina@cbre.com Agency Industrial Frank Freitag Director, Head of Industrial/Logistics Valentinskamp t: e: frank.freitag@cbre.com Logistics Investment Jan Koch Associate Director, Logistics Investment Valentinskamp t: e: jan.koch@cbre.com + FOLLOW US GOOGLE+ FACEBOOK 6 Disclaimer Information herein has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the market. This information is designed exclusively for use by GmbH clients, and cannot be reproduced without prior written permission of GmbH.