These and other results are provided by the latest market report from Realogis, Germany's leading consultancy for industrial, logistics and commercial properties.

"More than two thirds of take-up in the first six months was accounted for by existing properties. At 92,900 m², or a share of 68.2%, compared to 91,100 m² in the first half of 2023, there was almost a sideways movement," explains Florian Schulz, Consultant at Realogis Immobilien Berlin GmbH.

New builds account for 42,100 m² or 31.2%, up 19,100 m² or +83% from 23,000 m² in the same period last year. However, the average of the last 5 first half-years is 73,420 m² and was missed by 42.7 % (the exceptional major deal signed by Tesla in the first half of 2022 was not taken into account).

"As in the first half of the previous year, the Berlin market was predominantly a tenant's market: 91.4 % of contracts signed, or 123,400 m², are currently accounted for by tenants and only 11,500 m², or 8.6 %, by owner-occupiers," says Florian Schulz. In the same period of the previous year, all new contracts were concluded with tenants, or 114,100 m².

In terms of building type, business parks lead the way with 51,800 m² or 38.4 %, followed by 79,100 m² or 69.3 %, although this is where the only drop of 27,300 m² or 34.5 % was recorded. This is again followed by other properties with 43,600 m² or 32.3 %, up from 27,100 m² or 23.8 %, which corresponds to an increase of 16,500 m² or 60.9 %. The most significant growth was seen in big boxes (+31,700 m², up from 7,900 m² or 6.9 %), although they are still in third place with 39,600 m² or 29.3 %.

Regional ranking: Berlin city area still ahead of the surrounding area
Berlin's urban area remains responsible for the largest  rental of space in the first half of 2024, with 90,100 m² or two out of three square metres (66.7%) taken up (H1 2023: 92,400 m² or 81%). Although the absolute difference is 2,300 m² or 2.5 %, the city area is the most significant area in terms of proportion, losing 14.2 percentage points. The 5-year average of 103,050 m² was missed by 12.6 %.

Within Berlin's urban area, the South once again recorded the highest take-up with 26,400 m² or 29.3 % (H1 2023: 32,100 m² or 34.7 %). This means that the top position can be maintained despite the second-strongest decline within the urban areas of -5,700 m² (or -17.8 %).

Berlin East is close behind with 25,700 m² or 28.5 % (H1 2023: 17,100 m² or 18.5 %), recording the most significant growth of all urban areas with an increase of 8,600 m² (or +50.3 %). In third place is the previously second-placed submarket Berlin North with 20,200 m² or 22.4 %, coming from 27,500 m² or 29.8 %. This corresponds to the sharpest drop of all four urban areas with -7,300 m² or -26.5 % and leads to a drop of one place. Berlin West brings up the rear with 17,800 m² or 19.8 % after 15,700 m² or 17 % (+2,100 m² or +13.4 %).

Looking at the surrounding areas of Berlin, the South also maintained its position. With 23,200 m² or 17.2 %, this submarket is in second place behind the Berlin city area, coming from 15,300 m² or 13.4 %. Although this corresponds to the second-highest absolute growth of 7,900 m² or 51.6 %, the 5-year average of 75,839 m² was clearly missed by 69.4 %.

The surrounding area west of Berlin is in third place with 19,700 m² or 14.6 %. No completions were registered in this region in the previous year. The 5-year average of 26,727 m² was undercut by 26.3 %.

The Berlin East region followed in fourth place with 2,000 m² or 1.5 %; the 5-year average of 57,200 m² (even without the Tesla completion half-year 2022) was almost completely missed at -96.5 %. The surrounding area north of Berlin, where Realogis did not observe any deals in the past six months, came in last place, coming in third with 6,400 m² or 5.6 %. The 5-year average of 8,720 m² shows that this region has played a subordinate role in Berlin's industrial and logistics property rental market in the past 5 first half-years.

Sector ranking: Traditional retail responsible for more than half of space absorption
Retail remains the sector with the largest decrease in space: at 75,700 m² or 56.1 %, it is the sector with the largest increase of all, up 12,900 m² or 20.5 % from 62,800 m² in H1 2023. However, it remains almost equally relevant for the Berlin market, as more than every second square metre is still taken up by retail companies. The 5-year average of 98,048 m² was nevertheless missed by 23 %, albeit less significantly than in the first half of the previous year due to the increase (where the 5-year average of 105,368 m² was undercut by a significant 40 %).

Realogis could only register transactions in the traditional retail sector; e-commerce companies did not appear in the reporting period (in contrast to the same period of the previous year with 19,200 m² or 30.6%). This is also unusual for the Berlin market, as e-commerce companies took up an average of 37,572 m² over the five-year period.

However, the significant growth in traditional retail and wholesale (+32,100 m², up from 43,600 m² or 69.4 %) more than compensated for the decline in e-commerce (-19,200 m²) and was the only (sub)sector to exceed the 5-year average by 25 % (60,476 m²).

Second place is still occupied by the miscellaneous category Supply/Others with 31,600 m² or 23.4 %, up from 22,200 m² or 19.5 % (absolute growth of 9,400 m² or 42.3 %), almost exactly matching the 5-year average of 31,460 m².

This is followed by the manufacturing sector with 17,500 m² or 13 %, up from 13,600 m² or 11.9 %. However, the increase of 3,900 m² or 28.7 % is not nearly enough to achieve an average first half-year result: The 5-year average of 35,342 m² (excluding the major Tesla deal in H1 2022) is missed by 50.5 %.

The logistics/distribution sector brought up the rear with 10,200 m² or 7.6 %, down from 15,500 m² or 13.6 %, and was the only sector to record a decline in take-up (-5,300 m² or -34.2 %) and a below-average half-year result. Only around 17% of the 5-year average was achieved and this was by far the sharpest decline of all sectors (-83%).

 

Space larger than 5,000 m² responsible for 54.6 % of the decrease in space
Every fourth square metre that was taken up on Berlin's industrial and logistics property market in the first half of the year was accounted for by large spaces of 10,001 m² or more. With 33,400 m² or 24.7 %, they moved up two places to second place in the ranking. The three largest top deals account for the total take-up of space here.

At 18,100 m² or more than double the 15,300 m² recorded in the first half of the previous year (share H1 2023: 13.4 %), this is the most significant increase in absolute terms. However, the result is well below the 5-year average of currently 52,000 m² (excluding H1 2022) and is undercut by 35.8 %.

Units between 5,001 and 10,000 m² are currently in the lead with 40,300 m² or 29.9 %, followed by second place with 25,800 m² or 22.6 % (second most significant increase of 14,500 m² or +56.2 %). The agreements concluded by Peek & Cloppenburg and Chep totalled 17,900 m² or around 44 % of take-up. Due to the good results of the previous year, this category also fell short of the 5-year average of 58,920 m² by a significant 31.6 %.

"More than half of the newly let square metres on Berlin's industrial and logistics property market in the first half of the year were for units over 5,000 m²," reports Florian Schulz.

Lessors with the highest take-up in H1 2024

Medium to large spaces between 3,001 and 5,000 m² ranked fourth with 21,700 m² or 16.1 %, coming from 23,200 m² or 20.3 % (moderate delta of only 1,500 m² or 6.5 %; 5-year average is 30,120 m²: -28 %).

Smaller to medium-sized units between 1,000 and 3,000 m² are in third place with 29,600 m² or 21.9 %, after first place with 40,100 m² or 35.1 % (clearest delta of 10,500 m² or 26.2 %; 5-year average is 39,460 m²: -25 %).

Units in the smallest category of less than 1,000 m² totalled 10,000 m² or a share of 7.4 % and thus continue to bring up the rear, coming in at 9,700 m² or 8.5 % (sideways movement with a slight increase of 300 m² or 3.1 %; 5-year average is 14,800 m²: -32.4 %).

"Overall, the first half of 2024 is a below-average half-year, which applies to all size categories: Each size category is at least 25% to a maximum of just under 36% below the 5-year average," summarises Florian Schulz.

Prime rent scratches the 10 euro-mark
Prime rents on Berlin's industrial and logistics property market are continuing the positive trend of previous years and have recorded the second most significant increase of the past five first half-years. It rose by 9.4% to the current provisional high of €9.85/m². Only in the previous year did the prime rent increase more significantly in the last five first six months, rising by 13.9% from €7.90/m² to €9.00/m². The current prime rent is 19.4 % above the 5-year average of €8.25/m².

The average rent is also developing dynamically with an increase of 8.3 % to €7.80/m², up from €7.20/m². This is the second-highest increase in the last five first half-years and is only surpassed by the first half of 2022, in which the average rent rose from €5.90/m² to €6.80/m². The 5-year average of currently €6.70/m² is exceeded by 16.4 %.

REALOGIS press contact:
SH/Communication - Agency for Public Relations
Silke Westermann
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E-Mail: s.westermann@shcommunication.de

Company contact REALOGIS:
REALOGIS Holding GmbH
Silja Schuppler
Marketing
Leopoldstraße 154, 80804 München
Tel: +49/89/51 55 69 17
E-Mail: s.schuppler@realogis.de
www.realogis.de

REALOGIS. No. 1 for industrial and logistics properties

The REALOGIS Group is Germany’s leading player for the consulting and brokering of industrial, logistics and commercial properties. Founded in 2005 as a pioneer for the asset class of logistics and industry, the owner-operated group has enjoyed healthy growth, is crisis-resistant and knows the German market like no other. In 2022 Realogis generated nearly 1.25 million m² of usable space alone in the letting segment. The net commission revenue of all services in the financial year 2023 are around EUR 19 million.

In 2021, REALOGIS also won the German Real Estate Prize in the “Commercial Player” category, which honours companies for their outstanding commitment, creativity, innovative strength and sustainability.

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In short, REALOGIS creates more room for its customers’ success in every sense. Further information: https://www.realogis.de/