Market report Munich full-year 2023

In 2023, lettings in existing properties accounted for 161,000 m² or 59.6% of total take-up. However, compared with 211,200 m² or 84.5%, they suffered a significant drop of 50,200 m² in absolute terms (-23.8%) and also lost in importance in relative terms with a decline of 24.9 percentage points.

Brownfields, i.e. the use of sites that have had previous developments on them, did not record any transactions in the reporting period – in contrast to previous years that each saw up to seven projects developed. Instead, owner-occupier and rental transactions in new buildings on greenfield sites in particular significantly increased their importance for the Munich market in 2023 as a whole. The total annual take-up of new-build projects was 109,000 m², meaning that the segment grew by a significant 70,200 m² compared to the previous year, representing an almost threefold increase (2022: 38,800 m², +180%). New builds gained 24.9 percentage points in terms of their relative importance in the overall annual result.

The region is also the only one to gain in relative importance. At +37.6 percentage points, the region's share is 75.5%, meaning that the North region accounted for more than three out of four square metres of the take-up in the overall market last year.

For the first time: all top deals in just one region
All of the top rental deals on the Munich industrial and logistics property market were located in the North region in 2023. Its accumulated take-up totalled 121,000 m² or 59% and included the largest deal of the year conducted by Group 7 for 60,000 m². The West region submarket remains in secondplace with 29,700 m² or 11% (2022: 78,200 m² or 31.3%), but became less important both in absolute terms (-48,500 m² or -62%) and in relative terms (-20.3 percentage points).

The East region follows in third place in terms of take-up with 24,200 m² or 9% (2022: 41,400 m² or 16.6%). In absolute terms, this represents a delta of 17,200 m² or 42% and a proportionate loss of importance of 7.6%. The South region is in last place with 12,300 m² or a 4.6% pro rata take-up (2022: 35,700 m² or 14.3%; the second most significant slump of all submarkets in absolute terms at 23,400 m² or -66%; this submarket lost 9.7 percentage points pro rata).

In addition, three of the top deals, totalling 81,000 m² and including the highest, concluded by Group 7, of 60,000 m², are attributable to this sector. The second strongest demand, at 92,300 m² or 34.2%, was seen from companies in the manufacturingsector, which still required the most space – 100,200 m² or 40.1% – in 2022. This represents a slight decline of 7,900 m² (-7.9%) in absolute terms, with retail the only other sector to experience the same trend. Manufacturing thus shed 5.9 percentage points in relative terms. With a -26% fall, the sector is also below its own 5-year average of 125,000 m². Of the top deals, the lettings by Siemens Mobility (30,000 m²) and Yaskawa (10,000 m²) are allocated to this sector and contribute a total of 40,000 m² or 43%.

Retail remains in third place with 31,100 m² or 11.5% (dropping from 57,200 m² or 22.9% in 2022, this is the most significant absolute decline, totalling 26,100 m² or -45.6% and thus losing close to a half of its previous values). At 46.8%, the retail sector is also well below its 5-year average of 58,600 m². Within the sector, the decline can be attributed in particular to the sub-category of traditional retail. In a year-on-year comparison, this now occupies only second place with figures of 10,500 m² or 33.8%, falling from 44,200 m² and 77.3% and no longer setting the pace (-33,700 m² or -76.2% and also 74% below its own 5-year average of around 40,000 m²). In contrast, e-commerce accounted for 20,600 m² and thus around two thirds of take-up (66.2%) within the retail sector (+7,600 m² or +58.5% and around 11% higher than its own 5-year average of 18,580 m²). The miscellaneous category "Other" remains in last place with 28,400 m² or 10.5% (2022: 19,100 m² or 7.6%).

Only the two largest categories were able to increase take-up in 2023. The segment for large spaces of 10,001 m² or moretook top spot in the past full year with 101,000 m² or 37.4% and thus climbed three places compared to the previous year (2022: 66,200 m² or 26.5%). The contracts signed by Group 7 (60,000 m²), Siemens Mobility (30,000 m²) and the Raben Group (11,000 m²) are responsible for the total take-up in this size category.

Of all the space categories, large spaces saw the most significant growth in absolute terms, recording an increase of 34,800 m² (+53%). Proportionally, they also gained the most space with an increase of 10.9 percentage points. However, the 5-year average of 114,400 m² was missed by 11.7%.

Medium to large spaces between 3,001 and 5,000 m² are still in fourth place with 27,950 m² or 10.4% (2022: 36,100 m² or 14.4%; absolute loss: 8,150 m² or -23%; proportionate: -4.1 percentage points).

The size category of small to medium-sized spaces between 1,000 and 3,000 m², which ranked first in the same period of the previous year, lost two places with currently 63,200 m² or 23.4% (2022: 88,800 m² or 35.5%; the most significant decline of all categories with 25,600 m² or -29% and also the most significant proportionate loss of importance with -12.1 percentage points share of take-up).

The smallest spaces of less than 1,000 m²continue to rank last in the past full year at 13,950 m² or 5.2% (2022: 14,500 m² or 5.8%; slight absolute decline of 500 m² or 4%).