Realogis publishes Germany’s logistics properties rental map for Q3 2019: double-digit growth in six markets

Realogis, the Germany property consulting company for industrial and logistics properties and business parks, has looked at changes in rental prices for industrial and logistics properties in 32 markets over the last nine months. According to this analysis, the Hamburg, Göttingen, Kassel, Dresden, Würzburg and Nuremberg logistics markets have recorded double-digit growth since the beginning of 2019.

Realogis’s logistics properties rental map provides companies in the retail, e-commerce, commercial and production sectors as well as institutional and private investors with information on the development of rents for project developments and existing properties in a total of 32 logistics locations. Most changes up to the end of the third quarter of 2019 relate to new construction developments* and, in particular, initial rents. The Hamburg logistics market is the most affected, with initial rents for new buildings driven up from EUR 4.50/sqm to EUR 6.00/sqm – a rise of 33%.

Realogis also identified major changes in project developer supply in Göttingen (up to 19% increase for new construction) and in Kassel (up to 38% increase for new construction), due mainly to higher land prices.

In the Kassel region, the last time an initial rent of EUR 3.40/sqm was offered for a major project was in 2018. The space has since been let. However, project developers have since raised rents by up to 38% in some cases (to EUR 5.50/sqm), citing higher construction costs and general contractors’ full order books. “Our current estimate for the Kassel region for new construction is prime rent of between EUR 4.20 and EUR 4.50/sqm, which we consider healthy rental price development,” commented Christian Beran, Managing Director of Realogis Immobilien Deutschland GmbH.

A rise of 22% has been identified for existing properties** in Dresden, putting the current upper limit at EUR 5.50/sqm.

Southern logistics regions have also undergone key changes in the last nine months, for example in Nuremberg (maximum: up 14% for new construction and up 20% for existing) and Würzburg (maximum: up 18% for new construction and up 14% for existing). Florian Stork, Managing Director of Realogis Immobilien München GmbH, reported: “Limited supply combined with high demand means that owners in Nuremberg are raising rents, which is currently being accepted by users.

The highest prices for existing properties can be found at the port. Our estimates show that rents are also rising in Würzburg, not least because of its location between the core logistics property markets of Nuremberg and Frankfurt.”

For the first time, Realogis is showing the regions of Wolfsburg and Braunschweig separately to reflect the fact that rental prices in the two regions have diverged sharply and to ensure maximum transparency. “In the Wolfsburg region, high demand is met by low supply, causing prices to rise,” said Christian Beran. The Braunschweig region, on the other hand, currently has a large number of low-quality existing properties for which there is less demand. In the new-build segment, rental prices have developed similarly in both regions on the back of high construction costs.

On the other hand, the top 8 locations in the Ruhr region, Cologne, Dusseldorf, Hamburg and Berlin have seen a very moderate upturn against the beginning of the year, with growth of 1% to 3%.

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