Market report Frankfurt half year 2023

The Frankfurt rental and owner-occupied market for logistics and industrial properties continued the previous year’s negative trend in the first half of 2023. The take-up by all market participants declined by 23.9% compared with the first half of 2022 to 139,100 m².

Following the first half of 2021, which was the strongest first half of a year in the last ten years with 309,000 m², this is the second decline in a row. The trend has weakened slightly, but the current result is still below that of the same period of the previous year. The first half of 2023 therefore reached a new low. In terms of take-up, we have not seen a weaker first half of a year in ten years.

Market activity was dominated by rental contracts in existing properties with 93,400 m² or a share of 67.1%. Like in the first halves of previous years (with the exception of H1 2022 with 135,500 m²), the result is therefore around the 100,000 mark.

In the first six months, lettings in new builds accounted for 34,700 m² or 24.9%. This is the crystallisation of a trend that began in the first half of last year. Compared with take-up of 200,000 m² in H1 2021, new build take-up collapsed by 78.1% to 43,900 m² in H1 2022 and has now dropped a further 21% to 34,700 m².

The reasons for this primarily lie in the heavily reduced availability of greenfield sites at the same time as high land prices and construction costs.

In H1 2023, brownfield developments contributed a total of 11,000 m² or 7.9%, including one of the top deals: Bringmeister GmbH signed a lease for 10,000 m² of space at the former Holzwerk Rütgers site in Hanau.

In contrast, take-up in the Rhein-Main South submarket dropped by more than a third (-34.9%) year on year, and the market also saw the biggest decline in share in take-up of 7.1 percentage points. Three of the six largest deals took place in the south, totalling 29,280 m² and thus accounting for half of this submarket.

The Rhein-Main East region, where the other three top deals took place (28,300 m² or around 57% of the region’s take up), remained in second place with 49,300 m² or 35.4% (H1 2022: 50,300 m² or 27.5%).

The Rhine-Main South and Rhine-Main East markets thus continue to dominate take-up. Combined, their take-up amounts to 108,000 m² or three-quarters of total take-up (77.6%).

The Mainz/ Wiesbaden region was again in third place with 10,300 m² or 7.4% (H1 2022: 15,500 m² or 8.5%) followed by Rhine-Main North with 9,900 m² or 7.1%. Last but one was Frankfurt City with 7,700 m² or 5.5%, ahead of Rhine-Main West with 3,200 m² or 2.3%.

The biggest sector in terms of take-up was retail with 55,300 m² or a share of 39.8% (H1 2022: 69,200 m² or 37.8%). More than half of retail’s take up – 57.9% – was attributable to the subcategory e-commerce with 32,000 m², to which Bringmeister GmbH contributed 10,000 m², or nearly a third (31%).

Year on year, e-commerce is currently beating conventional retail as a lessee in the Frankfurt metropolitan region – with a gain of 42.5 percentage points in the first half of the year. On the other hand, the total take-up by companies in the traditional retail sector amounted to 23,300 m² or 42.1%, coming from 58,600 m² or 84.7% (decrease of 35,300 m² or 60% in absolute term).

Manufacturing ranked third with take-up of 27,300 m² or 19.6% (H1 2022: 7,200 m² or 3.9%), making it the industry with the biggest relative growth of +15.7 percentage points. The deals by DE NORA Deutschland GmbH and Thermo Fisher Scientific Germany B.V. & Co. KG contributed a total of 18,300 m² or 67% of the sector’s take-up.

Last place goes to the previously third-placed “Other” category with 9,200 m² or 6.6% (H1 2022: 7,800 m² or 4.3%).

In the first half of the year, large spaces of 10,001 m² and above accounted for only the third-most space at 26,880 m² or 19.3% (H1 2022: 85,800 m² or 46.9%). There were two deals – by Müller - Die lila Logistik SE and DE NORA Deutschland GmbH – neither of which came close to the 20,000 m² mark.

Spaces between 5,001 and 10,000 m² took first place in the first half of the year with 47,260 m² or 34% (H1 2022: 6,200 m² or 3.4%), which is partly attributable to four top deals.

Spaces between 3,001 and 5,000 m² ranked fourth with 18,800 m² or 13.6% (H1 2022: 32,000 m² or 17.5%). Smaller spaces between 1,000 and 3,000 m², with 44,180 m² or 31.8%, again proved highly significant for the Frankfurt market (second place) and were very stable compared with the other size categories (H1 2022: 45,400 m² or 24.8%). The smallest spaces of less than 1,000 m² contributed the least space at 1,900 m² or 1.4% (H1 2022: 13,500 m² or 7.4%).