Market report Hamburg half year 2023

The Hamburg market for rental and owner-occupied logistics and industrial properties has contracted for the second year in succession. Take-up in the Hamburg metropolitan region declined by 12% to 220,000 m² in the first half of 2023 after 250,000 m² in the same period of the previous year. The figure for H1 2022 already represented a downturn of 21.9% compared with the record level of 320,000 m² recorded in H1 2021.

In the same way as for most of the other top markets for logistics and industrial properties, existing properties were the dominant category in Hamburg in the first six months of the year, accounting for 69.1% or 150,200 m² of total take-up. Lettings of new builds amounted to 68,000 m² or 30.9%. No brownfield developments were taken up in the period under review.

Rentals account for the vast majority of take-up: Around 92% or 201,500 m² of take-up was attributable to properties that did not belong to the users, whereas owner-occupiers accounted for just 8% or 18,500 m². By comparison, owner-occupiers were responsible for around one-third of take-up in the same period of the previous year, with a figure of 80,000 m² or 32% in this category.

In terms of building type, business parks accounted for the majority of take-up in H1 2023 at 144,200 m² or 65.5%. This significant increase of 86,700 m² meant that take-up was 2.5 times higher than the figure of 57,500 m² recorded in H1 2022. The relative share of take-up attributable to business parks also rose dramatically by 42.5 percentage points.

Big-box properties accounted for take-up of 75,800 m² or 34.5%. As well as constituting a significant reduction of 106,700 m² in absolute terms after 182,500 m² in the same period of the previous year, this meant the relative share of the market attributable to big-box properties declined by 38.5 percentage points. This property type accounted for around three out of every four square meters taken up in the previous year, whereas the corresponding figure for this year is around one-third. In absolute terms, the downturn of 106,700 m² in this area is almost entirely responsible for the lower half-year result (91%; the remaining -9% or -10,000 m² is attributable to properties that were not previously allocable).

Having been consistently ranked first since H1 2019, the Hamburg South region continued to head the regional ranking in the first half of the current year, accounting for 81,400 m² or 37% of total take-up. However, its lead narrowed considerably, with take-up declining significantly in absolute terms (36,100 m² or -30.7%) as well as in relative terms (-10 percentage points) compared with the figure of 117,500 m² or 47% in H1 2022.

Last year’s second-placed region East, brought up the rear after experiencing the biggest decline in take-up – from 75,000 m² to 26,400 m² (12 %), down 48,600 m² or -64.8% – and the most pronounced reduction in its relative share at -18 percentage points. This is unusual since the region had been consistently ranked second since H1 2019, averaging around 25% of total take-up during this time.

Since H1 2016, logistics/ distribution has consistently been the biggest sector of the Hamburg market in terms of take-up. In the period from January to June 2023, it accounted for take-up of 79,600 m² or 36.2%, compared with 147,500 m² or 59% in H1 2022. This meant logistics/ distribution was the sector with the biggest downturn in absolute terms (67,900 m² or -46%), while its relative share of the market also declined by a substantial 22.8 percentage points. The two top deals by TST GmbH and IGEPA Group accounted for 34,800 m² or 44% of take-up.

Manufacturing saw the strongest sector growth, with take-up of 76,660 m² or 34.8% representing the highest figure since our records began. Compared with the prior-year figure of 10,000 m² or 4%, the second-placed sector in the current ranking recorded growth in terms of absolute take-up (a more than sevenfold increase of 66,600 m²) as well as its relative share of the market (up 30.8 percentage points).

The miscellaneous category “Other” again ranked last with take-up of 19,800 m² and a market share of 9% (H1 2022: 10,000 m², 4%).

The reduction in total take-up in H1 2023 was due largely to the downturn in demand in the logistics/ distribution sector (-67,900 m² or 64% of the cumulative reduction in take-up), followed by the retail sector (-38,500 m² or 36%).

As in the previous year, large units of 10,001 m² or more were the biggest size class in the first half of 2023, accounting for take-up of 75,800 m² or 34%. While large spaces remain the most important size class on the Hamburg market, however, a comparison with the prior-year figure of 162,500 m² or 65% shows that this was the only size class to see a downturn in take-up in absolute terms (-86,700 m² or -53.4%) as well as a 31 percent reduction in its relative share.

Despite a severe shortage of available space and high construction costs, demand for high-quality logistics space remains dynamic. Properties need to be sustainable and satisfy ESG criteria as well as offering resource-saving concepts that help occupiers to lower their energy costs.

Meanwhile, average rents are outperforming prime rents in terms of growth, rising by 9.1% to a new high of EUR 6.00/m². This represents the biggest increase in the past five first half-years and means the current average rent is 13% higher than the five-year average of EUR 5.31/m².

Currently there are almost no new spaces larger than 10,000 m² available. As a result, companies are having to look at sites in the wider Hamburg metropolitan region – along the A7 to Flensburg to the north, the A24 to Berlin to the east, and the A1 to Bremen to the south.

We expect full-year take-up on the Hamburg market for rental and owner-occupied logistics and industrial properties to amount to around 400,000 m² due to a shortage of high-volume space and the prevailing economic uncertainty.