Hamburg Office MarketView

Transcription

1 Hamburg Office MarketView Q2 213 GDP Q1 GER +.1% Q-o-Q GDP Q4 GER -.6% Q-o-Q IFO BUSINESS CLIMATE INDEX 15.9 June 213 CBRE Global Research and Consulting GFK CONSUMER CLIMATE INDEX 6.5 June 213 UR HH 7.3% June 213 OVERVIEW Quick Stats Q2 213 Q/Q Take-up 118,5 sq m Vacancy 1.6m sq m Prime rent 24. /sq m Prime yield 4,75% Completions 35,4 sq m Economy In the first quarter, real German GDP increased slightly (.1%) quarter-onquarter. According to Consensus Forecast,.5% economic growth is expected in the course of the year. The general economic data for Hamburg also indicate a robust trend. For instance, the unemployment rate in June was 7.3%,.1 %-points lower year-on-year, while the number of employees registered for social insurance in April was 1.9% higher than a year earlier. According to the IHK Hamburg Konjunkturbarometer (economic barometer), considerably more Hamburg firms took a positive view of the future business situation at the end of the first quarter, compared with the figure three months earlier Office market In the first half of 213 around 218,5 sq m of office space was taken up in the Hamburg office market. Despite the smaller proportion of owneroccupiers, take-up slightly increased (3%) year-on-year. Office vacancy was at the same level as the previous year, 1.6m sq m. As the office stock has increased by 1.2% to 13.43m sq m, the vacancy rate has fallen slightly, to 7.9%. The prime rent for high-quality office space is unchanged at the previous year s figure of 24. /sq m/ month. Hot Topics Take-up slightly higher year-on-year Vacancy stable, vacancy rate still decreasing Prime rent unchanged in the last year Prime yield on office property still at a record low Investment market In the first half of 213, the transaction volume on the Hamburg investment market reached 1.17bn, a 48% increase year-on-year. Investments in office property, accounting for 62% of the total volume, were dominant. In second position was the Hotel asset class, with almost 16%. Despite increasing demand for high-quality office property, even in B-locations, investments in the core sector predominated. As a result the prime yield on office property has remained steady at the record low of 4.75%. Table 1: Office market key data Q2 212 Q2 213 Y-o-Y 1 Stock, million sq m % Take-up, cum. 1, sq m % Vacancy, million sq m % Vacancy rate, % %-Pts. Prime rent, /sq m/month % Prime yield, % %-Pts. Capital value index (Q = 1) % 213, CBRE GmbH

2 1, sq m % 1, sq m Q2 213 Hamburg Office MarketView 2 TAKE-UP In the first half of 213 around 218,5 sq m of office space was taken up in the Hamburg office market, an increase of 3% compared with the previous year. Lettings of office space with top-quality fit-out in prime locations (socalled A-Grade space) predominated, accounting for more than 7%. As in the first quarter, the largest take-up was registered in the City-South submarket. The approx. 6, sq m let there equates to 27% of the total volume and represents a considerable increase (43%) year-on-year. Hamburg City was next, with 19%. The strong letting performance in the small to medium-sized office segment there played a major part in this. In third place was the Hamburg-West submarket, with 9% of the total. The largest office letting was the around-14, sq m lease to Philips GmbH in the Airport submarket. Correspondingly, the Industry/Construction sector accounted for the highest proportion (around 12%) of the half-yearly take-up. The Trade sector, which traditionally accounts for a high level of take-up, was similarly high at around 12%. The Health/Social sector was in third place. Transactions that contributed to the high proportion (9%) of take-up there included the letting to Barmer GEK in City-South, facilitated by CBRE. The first half-year once again demonstrated that the Hamburg office market can rely on a large number of smallscale lettings. Around 8% of all lettings were in the under- 1, sq m category. In absolute terms this equates to around 44% of the total take-up in the half-year. The average floor area per letting, at around 775 sq m (1% higher year-on-year) substantiated this. Taking this into account, the slight increase in take-up, despite the absence of major lettings and large-scale owner-occupiers, is even more significant. VACANCY Compared with the second quarter of 212, office vacancy declined by.5% to around 1.6m sq m. Apart from a slight (.1 percentage point) fall to 7.9%, the vacancy rate is almost the same as a year ago. This trend is primarily due to the present very low completion rate of speculative office accommodation, at the same time as stable office take-up. In the last two quarters this was particularly evident in the HafenCity, where for example vacancy continued to decline in the second quarter of 213. The vacancy rate fell by 4.3 %- points to 7.1%, the lowest since records began. The amount of unlet office space also declined in most of the submarkets near to the city centre. For instance, the rate in City-North fell by 1.7 %- points to 2.4% and in City- East/St.Georg by.9 %- points to 4.8%. To a very large extent, vacancy in the largest submarkets, City and City- South, was stable at the previous year s level, with only marginal declines. As a result of the low volume of speculative completions and the high demand for high-quality office space, the major fall in vacancy was in the top quality of fit-out and prime location (so-called A-grade space) segment. On the assumption that this trend will continue, no major volatility of office vacancy can be expected. Chart 1: Office space take-up Chart 2: Office space take-up (cumulated, %) by sectors* - Top 5 - Chart 3: 1,4 1,2 1, year average:: 464, sq m Remaining sectors 51% Office space vacancy 1 year average: 7.9% Q1 Q2 Q3 Q Q2 Vacancy Industry, Construction 12% Vacancy rate Trade 12% Health, Social 9% Transport, Traffic Further 8% Education 8% *in total 2 sectors , CBRE GmbH

3 1, sq m Index Q = 1 /sq m/month Chart 4: Prime rent/ Weighted average rent Q2 213 Prime rent Weighted average rent Chart 5: Rent index 3 25 Rent The high take-up of so-called A office space reflects the unfailing demand for high standards of fit-out and location for new lettings. As this demand cannot be adequately satisfied by the low volume of speculative completions, there is a corresponding effect on the prime rent for top-quality office space in prime locations. For six quarters in succession this has been stable at 24, /sq m/ month. The weighted average rent has declined slightly (-1.5%) year-on-year, to /sq m/ month. However, as a result of varied lettings in the planned new development sector, this is a 2% increase on the first quarter of 213. The largest increases were recorded in the submarkets close to the city centre: Außenalster (+21%); Winterhude/Barmbek (+2%) and Eppendorf (+12%). Various lettings, particularly in the high-value newbuild segment, were responsible for this. The average rent in Hamburg South/East also increased considerably (+2%). A number of logistics services providers contributed to this significant increase in rental value. While the trend in the central submarkets was stable, major falls in rental value were seen in only Harburg/Süderelbe (-28%) and Hamburg-West (-11%). In the wake of increases in rental value in Munich, Dusseldorf and Berlin, the CBRE Rental Value Index (Q1 1986=1) rose by 2.6 index points year-on-year, to 28.9 points. The stable prime rent in Hamburg meant that the index was unchanged at points. Q2 213 Hamburg Office MarketView Chart 6: Germany Hamburg Office space future supply PIPELINE Construction activity in the Hamburg office property market remained at a comparatively low level in the first half of 213. Nevertheless with around 99, sq m of office space was completed, 4% above the ten-year average takeup in the first half-year (95, sq m) and 5% above the volume completed in the first half of year average: 211,3 sq m The planned volume of completions in the coming half-year, around 89, sq m of office space, means that the total volume completed in 213 will be slightly under the 1-year average of 211,3 sq m p.a. The proportion of speculative completions in this period is relatively low, at 32%. Around 5% of the space currently under construction is already prelet. Not until 214 will the proportion of speculative space recover significantly, to 64%, although even here a large proportion - around 71, sq m is already pre-let. In contrast, owner-occupied office properties are mainly in the Hamburg office pipeline from 215, when the planned roughly 4, sq m will constitute about 32% of the volume of completions Completed Speculative Pre-let Owner-occupied 213, CBRE GmbH

4 Index Q = 1 % 1, sq m Q2 213 Hamburg Office MarketView PIPELINE BY SUBMARKETS In terms of the proportionally largest volume of completions by 215, around 247, sq m (approx. 6%) of the total volume is relatively evenly spread across the top 5 submarkets. HafenCity not only has the largest proportion of total volume, around 13.5%, but also the most owneroccupied office space, around 4, sq m. Since the plans for the Überseequartier are as yet uncertain, the proportion of speculative space in the submarket has fallen to 9%. The proportion of speculative accommodation is much higher in the Außenalster (62%) and City (75%) submarkets. Nevertheless, some of the project developments in these submarkets have a high ratio of pre-lets and therefore only small amounts of space are available to let. Worthy of mention in this respect is the Sophienterrassen in the Außenalster submarket, which is planned for 214. The volume of projects in Harburg/Süderelbe is around 45. sq m. This includes the majority of the ZAL TechZentrum and the Europa-Center Finkenwerder, close to the Hamburg Airbus works. Both properties are planned for 214. INVESTMENT Chart 7: Office space future supply (Q ) by submarkets* -Top 5- Chart 8: Prime yield, capital value and benchmark yields *in total 2 submarkets FORECAST The half-year results for the Hamburg office market reflect the city s good general economic data as well as Germany s robust economic situation. The number of employees registered for social insurance once again rose in April, illustrating the importance of Hamburg as a location for employment and offices. In this context however, the slight increase in office take-up on the previous year is not yet promising. Nevertheless, with the current stable demand, a positive trend can be anticipated during the year, leading to a year-end result similar to that in 212. In terms of prime rent and vacancy rate, we assume that there will be a stable trend in the Hamburg office location Hafen- City Auß.- alst. City Speculative Pre-let Owner-occupier Confidence in the stability of Hamburg as an economic location is also reflected by growth in the investment market The transaction volume of around 1.17bn in the first half of 213 is already more than the previous year s result. 2 5 Investments in office property once again predominated, 4 accounting for around 62% of the total volume. Hotels were 15 next, with almost 16% of the total investment volume, due to a few large-scale transactions in the first quarter, such as the 3 sale of the Vier Jahreszeiten and Le Royal Méridien hotels. 1 Solely due to lack of availability of suitable properties, 2 investment activity in the retail property sector was only half that in the same period of 212, totalling around 128m in 5 1 the period under consideration. The most active group of purchasers were Private Investors (including Family Offices), Q2 accounting for around 34%. These invested a total of around 44m, more than three times the amount they Capital value index Prime yield (%) 1y government bond (%) invested in the first half of 212. Open-end real estate funds/special funds were next, with 15%, followed by Insurance companies and pension funds with 14% of the investment volume. The largest vendor groups were Companies (31%); Open-ended/Special Funds (19%); and Asset and Fund Managers (14%). Foreign investors increasing interest in Hamburg as an investment location was reflected in the figures for the half-year. For example, compared with the first half of 212, the volume placed by foreign investors was well over four times higher, reaching 18% of the total market activity. Although there is increasing demand for high-quality office property in B locations, investors are still concentrating on core properties in established investment locations. The prime yield on office property remained correspondingly low, at 4.75% for the fifth quarter in succession. Har. Süd. HH-W 4 213, CBRE GmbH

5 Table 2: Submarket key data Cumulated Take-up sq m Future supply Q sq m Vacancy rate % Rental band /sq m/month Weighted average rent /sq m/month Außenalster 3 53, City 41,5 51, City-North 4, n/a City-East/St. Georg 4, City-South 59,8 39, City-South-Extension 4, n/a Eppendorf 5, 11, Airport 15,7 2, Harbour 9,6 32, HafenCity 13,4 55, Hamburg-North/East 2, n/a Hamburg-South/East 3,5 5, Hamburg-West 18,9 41, Harburg/Süderelbe 1,4 45, Schnelsen/Niendorf 2, n/a Stellingen/Lokstedt/Eimsbüttel 1, n/a St. Pauli/Altona 9,1 14, Wandsbek 2, Westl. Hafenrand 13, Winterhude/Barmbek 8,7 36, TOTAL 218,5 49, Q2 213 Hamburg Office MarketView 5 213, CBRE GmbH

6 Q2 213 Hamburg Office MarketView For more information about this MarketView, please contact: Research Germany Dr. Jan Linsin Senior Director Head of Research Germany CBRE Bockenheimer Landstr Frankfurt t: e: Frank Sgonina Analyst CBRE Valentinskamp Hamburg t: e: frank.sgonina@cbre.com Agency Hamburg Heiko Fischer Managing Director, Head of Agency Hamburg CBRE Valentinskamp Hamburg t: e: heiko.fischer@cbre.com + FOLLOW US GOOGLE+ FACEBOOK Global Research and Consulting This report was prepared by the CBRE Germany Research Team which forms part of CBRE Global Research and Consulting a network of preeminent researchers and consultants who collaborate to provide real estate market research, econometric forecasting and consulting solutions to real estate investors and occupiers around the globe. 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 CBRE GmbH clients, and cannot be reproduced without prior written permission of CBRE GmbH , CBRE GmbH