As a result, this is the weakest first half-year in terms of take-up since 2019 and the second-worst half-year since Realogis began keeping records in 2014.

"Many companies are acting cautiously and postponing investment decisions due to the uncertain economic situation. Instead, existing rental agreements in existing properties are being extended," reports Jörg Lojewski, Managing Director of Realogis Immobilien Hamburg GmbH.

"On the property side, too, there is currently little evidence of entrepreneurs focusing on opportunities. Project developers are postponing new speculative project developments and only building to suit. This trend is exacerbated by the fact that there are only a few plots of land available for development for production and distribution space in the Hamburg area and the metropolitan region - despite a growing population," says Stefan Imken, Managing Director of Realogis Immobilien Hamburg GmbH.

Downward spiral already started in 2022
The downward spiral in the port metropolis began as early as 2022, with a 21.9% drop in take-up from 320,000 m² to 250,000 m² in 2021 and a delta of -12% to 220,000 m² in 2023.

A look at the average figure for the past five first half-years, which currently stands at 219,000 m², reveals a significant difference of 36%.

As in the same period of the previous year, transactions in existing properties accounted for the majority of take-up, but at 82% or 115,000 m², their dominance is increasing (H1 2023: 69.1% or 152,000 m²; in absolute terms, there was a decline of 37,000 m² or 24.3%).

Contracts in new-build properties totalled 25,000 m², which corresponds to a 17.9% share of total take-up. Starting from 68,000 m² in the same period of the previous year, the slump in take-up was almost two thirds (-63.2%).

The overall weak result is due almost equally to existing properties (-37,000 m² of the total decline or 46%) and new builds. New construction (-43,000 m² of the total year-on-year decline of -80,000 m² or 54%) was hit somewhat harder.

Conversely, transactions in former brownfield space played no role in the past six months, as in the same period of the previous year. "The potential for brownfield sites that are suitable for development or ageing properties in the city with Germany's largest seaport is enormous. The market lacks modern, sustainable properties that can be used by third parties," Jörg Lojewski continues.

Renting instead of owner-occupation
In the first half of 2024, Hamburg's industrial and logistics property market is still almost exclusively a tenant's market (132,000 m² or 94%), with owner-occupiers accounting for just 8,000 m² or 6% of the total result (2023: 92% tenant share and 8% owner-occupiers). In absolute terms, take-up by tenants fell by a significant 69,500 m² (from 201,500 m² to currently 132,000 m²), followed by owner-occupiers with -10,500 m² (from 18,500 m² in the first half of 2023 to currently 8,000 m²).

Business parks ahead of big box logistics properties
In terms of building type, business parks continue to lead the way in the Hamburg metropolitan region (99,000 m² or 70.7%, up from 144,200 m² in H1 2023), followed by big box logistics properties (41,000 m² or 29.3%, up from 75,800 m² in H1 2023).

 In absolute terms, however, business parks recorded a sharper year-on-year decline in take-up of -45,200 m² or -31.3% than big box deals with -34,800 m² or -45.9%.

"Just two years ago, almost three quarters of all space taken up, or 182,500 m², was taken up in big box properties. These figures illustrate that companies are currently increasingly focussing on smaller units when signing new leases," says Stefan Imken.

Regional ranking: Hamburg East in the lead
The East region, which was in last place in the same period last year, has now taken the lead among the regions with 72,500 m² or 51.8%, up from 26,400 m² or 12% and a clear gap to second place. In absolute terms, this is the only region to record growth, with a significant increase of 46,100 m² (+174%). It is also the only region to exceed its 5-year average of 63,580 m² by a significant 14%, according to Realogis.

The deals signed by Kühne + Nagel (9,000 m²) and Freudenberg Industrial Service GmbH (8,500 m²) contributed a total of 17,500 m² or 24.1% of the region's take-up.

The South region, which has consistently been in first place since H1 2019, fell to second place with 44,500 m² or 31.8% (coming from 81,400 m² or 37%). In absolute terms, this region recorded the second sharpest decline of all regions with a drop of 36,900 m² or 45.3%, and also undercut the 5-year average of 97,480 m² by a significant -54.3%. The two top signings are FW Fulfillment + Logistik GmbH (9,000 m²) and Nefab Packaging Germany GmbH (7,500 m²), which contributed a total of 16,500 m² or 37.1% of the region's take-up.

In third place is the West region with 12,500 m² or 8.9%, coming from 79,200 m² or 36% (-66,700 m² or -84.2%); the 5-year average of 25,740 m² was missed by 51.4%. The top contract signed by DREI-D Direktwerbung GmbH & Co. KG accounted for 7,500 m² and thus around 60% of take-up in the region.

The North region is in last place with 10,500 m² or 7.5%, coming in third place with 33,000 m² or 15%. In percentage terms, this region recorded the second largest year-on-year decline at -68.2% or 22,500 m² in absolute terms, with only around a third of the 5-year average of 32,200 m² currently achieved (67.4% short of the target).

The West region is mainly responsible for the weak first half of the year in terms of its share of the year-on-year decline totalling 80,000 m² with 52.9% or -66,700 m², followed by the South region with 29.3% (36,900 m²) and the North region with 17.8% (-22,500 m²). The growth of 46,100 m² in the East region was unable to offset the declines in the other regions.

Sector ranking: Only the logistics/distribution sector increases its take-up
"In terms of the sectors’ share of take-up, companies from the logistics/distribution sector contribute 56,600 m² or 73.9% less space than in the same period last year," comments Jörg Lojewski.

At 65.1%, manufacturing is primarily responsible for the total year-on-year decline of -86,900 m². This is followed by retail with a share of 23.6% (or -20,500 m²) and other with 11.3% (-9,800 m²). The growth in logistics/distribution with +6,900 m² or +8.7% could not offset these declines.

Only the first-placed logistics/distribution sector was able to expand its market share with 86,500 m² or a share of 61.8%, up from 79,600 m² or 36.2% in H1 2023. In absolute terms, the result from the current half-year is 6,900 m² higher than the first half of 2023, while the proportion of total take-up increased by 25.6 percentage points. Nevertheless, the 5-year average of 109,530 could not be maintained and was undercut by 21%. Three of the top five deals fall into the logistics/distribution category and account for a total of 25,500 m² or 29.5% of take-up in the sector.

Retail/wholesale is in second place with 23,500 m² or a 16.8% share of take-up, coming from 44,000 m² or 20%. In absolute terms, this represents the second most significant decline of 20,500 m², which is almost half the previous year's figure (-46.6%). At the same time, less than half of the 5-year average was achieved (-53.6%), which currently stands at 50,620 m². Within the sector, traditional retail accounts for 15,000 m² or 63.8% (H1 2023: 35,200; -57.4%), while e-commerce accounts for 8,500 m² or 36.2% (H1 2023: 8,800 m²; -3.4%). Both sub-categories are significantly below their respective 5-year averages: the average for traditional retail is 35,067 m² and was missed by 57.2%. E-commerce underperformed its average of 14,933 m² by 43.1% with the current result.

In third place is manufacturing with 20,000 m² or 14.3%, followed by second place with 76,600 m² or 34.8%. In absolute terms, the most significant decline in take-up was recorded here with -56,600 m² or -73.9%. The result is around a quarter of the previous year's figure. Proportionally, the category also lost the most at 20.5 percentage points, falling from a 34.8% share of take-up in H1 2023 to 14.3% currently. In the clearly below-average first half of the year, the 5-year average of 42,120 m² was undercut by a significant 52.5%.

The miscellaneous category is still in last place with 10,000 m² or 7.1%, down from 19,800 m² or 9% (-9,800 m², which is  equivalent to a halving and 40.2% below the 5-year average of 16,730 m²).

Lessors with the highest take-up in H1 2024

Total loss of large spaces
The fact that there was not a single large-scale deal in the 10,000 m² and above category in the first half of the past year can be described as historic.

"This total loss in a category that typically accounts for the most space in the Hamburg Metropolitan Region constitutes a novelty since we started keeping records," says Stefan Imken.

In the previous year, this category was still in first place with 75,800 m² or a share of 34.5%. Space of 10,000 m² or more currently ranks at 93,380 m² on a 5-year average.

Larger spaces between 5,001 and 10,000 m² are thus up one place year-on-year and are currently in first place with 51,500 m² or 36.8%, up from 55,000 m² or 25%. In absolute terms, larger spaces fell by 3,500 m² or 6.4%, but were able to exceed the 5-year average of 43,500 m² by a significant 18.4%. Due to the absence of large deals of over 10,000 m², all categories were able to increase their share of take-up, with the category of 5,001 to 10,000 m² recording the most significant increase of 11.8 percentage points.

Medium to large spaces between 3,001 and 5,000 m² occupy the penultimate, fourth place with 25,000 m², coming from last place with 24,200 m² or 11%. In absolute terms, they increased by 800 m² (or 3.3%). The 5-year average of 24,400 m² was exceeded by 2.5%.

Smaller spaces of between 1,000 and 3,000 m² are again in third place with 28,500 m² or 20.4%, up from 33,000 m² or 15%. In absolute terms, the decline amounts to 4,500 m² or 13.6% (second largest decline after large spaces over 10,000 m²). The 5-year average of 34,220 m² was missed by 16.7%.

Very small spaces of less than 1,000 m² recorded a very good first half-year with 35,000 m² or 25% and are in second place, coming in at 32,000 m² or 14.5% (4th place). In absolute terms, they recorded the highest growth of all size categories with 3,000 m² or 9.4%. Of all size categories, they have exceeded their 5-year average of 23,500 m² most significantly at 48.9%.

 

Prime and average rents continue to rise unabated, but at a more moderate pace
The prime rent rose by a moderate 3.1% in H1 2024 to currently €8.25/m² (H1 2023: €8.00/m²). The increase in rents that began in the first half of 2017 is thus continuing uninterrupted. The 5-year average of € 7.25/m² has now been exceeded by 13.8%.

The average rent has also risen without restriction since H1 20217 and is currently rising somewhat more dynamically than the prime rent with an increase of 4.2% to the current provisional high of € 6.25/m². This figure exceeds the current 5-year average of €5.58/m² by 12%.

Outlook
The market is turning towards users. "In order to reduce vacancies or prevent them from arising in the first place, landlords are increasingly willing to offer incentives in the form of rent-free periods, for example," reports Jörg Lojewski.

"A revitalisation of the market is conceivable, as further interest rate cuts are likely and companies will be able to invest more again. We expect take-up by all market participants to reach around 300,000 m² by the end of 2024," Jörg Lojewski continues.

REALOGIS press contact:
SH/Communication - Agency for Public Relations
Silke Westermann
Tel: +49/211/53 88 3-440
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.

Realogis is represented in the country’s seven top logistics locations of Berlin, Düsseldorf, Frankfurt am Main, Hamburg, Leipzig, Munich and Stuttgart, while a dedicated organisational unit ensures transparency in around 15 additional regional logistics markets. 70 real estate professionals advise national and international companies from the fields of logistics, e-commerce, retail and industry as well as private and institutional investors. Quick, flexible, regional, customer-oriented and with a high volume of transactions.

REALOGIS four core competencies are arranging highly creditworthy tenants for new and existing properties, assisting investors with property investments and project development of greenfields and brownfields, outstanding service for locating or selling sites, and the development and implementation of holistic property strategies.

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