PROPERTY MARKET REPORT 2019 - BUSINESS PROMOTION

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PROPERTY MARKET REPORT 2019 - BUSINESS PROMOTION
PROPERTY MARKET REPORT 2019

BUSINESS PROMOTION
PROPERTY MARKET REPORT 2019 - BUSINESS PROMOTION
PROPERTY SUBMARKETS AT A GLANCE
                                                                                                                                                                                PROPERTY SUBMARKETS AT A GLANCE

    OFFICE                                                                                     RETAIL                                                                            HOTEL                                                                      LOGISTICS                                                                                 RESIDENTIAL

                                                                                                                                                                                  Hannover’s tourism is growing – the number of overnight
                                                                                                                                                                                  stays in 2018 was again more than 4 million in the city and
                                                                                                                                                                                  region. Nine hotel projects with around 1,350 rooms are
     The number of office workers in Hannover will rise to around                                                                                                                 currently in completion or under construction. A further
     153,000 in 2019. This means that the number of office jobs has                                                                                                               twelve hotels with at least 1,700 rooms are already planned
     increased by around 15,000 people or 11 % over the last five                                                                                                                 from 2020.                                                                                                                                                           The residential property market is dominated by regional
     years. The increasing demand for office space is clearly notice-                                                                                                                                                                                                                                                                                  providers and demand from private households. The popula-
     able in the office property market. In 2018, the office space                              The Hannover Region is one of the highest-selling retail locations              Hotel                                                                        The Hannover Region is a European logistics hub and an                                    tion growth in the state capital and the neighbouring districts
     turnover amounted to some 180,000 m².                                                      in Germany. In 2019, it is estimated that sales in the retail sector                                                                                         important, expandable port hinterland location for the                                    are generating an increasing demand for residential prop-
                                                                                                                                                                                Number of accommodation establishments 2018                      351
                                                                                                will be around €7.9 billion. Hannover’s city centre, with its prime                                                                                          seaports in northern Germany. Commercial and industrial                                   erties. In the last five years (beginning of 2014 to the end of
                                                                                                                                                                                 Hannover city                                                    111
  Office                                                                                        locations in the Georgstraße and the Bahnhofstraße, is comple-                                                                                               companies in particular are the customers of the regional                                 2018), the population of the city has grown by around 20,700
                                                                                                                                                                                 Surrounding area                                               240
                                                                                                mented by retail market centres, shopping centres, district                                                                                                  logistics industry. In recent years, many contract logistics                              (up 3.9 %) to 545,100 inhabitants. The number of people
  Rentaloffice space 2019 in m² MF-G                                         5.04 m
                                                                                                centres and attractive inner cities in the region.                              Hotels 2018                                                      164         specialists have established themselves in and around                                     who live in the entire region is 1.18 million (up 3.6 %). During
    Hannover city                                                             4.56 m
                                                                                                                                                                                 Hannover city                                                    45         Hannover, providing logistics services to other companies and                             the same period, only around 4,400 new apartments were
    Surrounding towns of Garbsen, Laatzen and Langenhagen                    0.48 m
                                                                                             Retail 	                                                                            Surrounding area                                                 119        demonstrating high levels of in-house added value. In 2018,                               completed in Hannover city and a further 7,800 apartments
  Office space turnover 2018 in m² MF-G                                     180,000
                                                                                                                                                                                Number of beds (all accommodation types) 2018                30,478          hall area sales increased significantly again and amounted to                             in the surrounding area, so that the current outlook indicates
    Hannover city                                                            173,000         Sales area Hannover Region in m²                                     2.1 million
                                                                                                                                                                                 Hannover city                                                13,770         around 375,000 m².                                                                        a considerable need for new housing. Between 2013 and 2018
    Surrounding towns of Garbsen, Laatzen and Langenhagen                      7,000           Surrounding area                                                         1.2 m
                                                                                                                                                                                 Surrounding area                                            16,708                                                                                                    Hannover city granted planning permission for around 9,030
  Vacancy rate 2019 in m² MF-G                                              150,000            Hannover city                                                           0.9 m
                                                                                                                                                                                Beds in hotels 2018                                          14,889       Logistics                                                                                    new apartments. The Hannover Region reckons that some
    Hannover city                                                           125,000              of which inner city Hannover (Hannover Mitte)                      285,000                                                                                                                                                                            20,500 new apartments need to be built throughout the region
                                                                                                                                                                                 Hannover city                                                  9,118     Logistics area portfolio 2019 in m²                                          3.13 m
    Surrounding towns of Garbsen, Laatzen and Langenhagen                    25,000          Retail centrality index 2018 (Germany = 100)                                                                                                                                                                                                              to meet demand.
                                                                                                                                                                                 Surrounding area                                               5,771       of which built after 2009                                                    1.2 m
  Vacancy rate 2019                                                           3.0 %            Hannover city                                                            121.9
                                                                                                                                                                                Nights (all accommodation types) 2018                        4.05 m       Logistics area turnover 2018 in m²                                        375,000
    Hannover city                                                              2.7 %           Surrounding area                                                           107                                                                                                                                                                       Residential
                                                                                                                                                                                 Hannover city                                               2.25 m       Rents Top locations 2019
    Surrounding towns of Garbsen, Laatzen and Langenhagen                      5.2 %         Purchasing power 2019 in €                                          8.43 billion
                                                                                                                                                                                 Surrounding area                                            1.80 m                                                                                                 Rents 2019
  Prime rental 2019 in €/m² MF-G                                                                                                                                                                                                                            Top rent in €/ m²                                                             5.10
                                                                                               Hannover city                                                          3.90 b
                                                                                                                                                                                Nights in hotels 2018                                        2.29 m                                                                                                   New building, prime rent in €/ m²                                     15.60
    City                                                                        17.10                                                                                                                                                                       Average rent in €/ m²                                                        4.20
                                                                                               Surrounding area                                                        4.53 b
                                                                                                                                                                                 Hannover city                                               1.46 m                                                                                                   New building, average rent in €/ m²                                   13.20
    City periphery                                                             13.80                                                                                                                                                                      Net initial yield logistics centres in prime locations 2019                  4.5 %
                                                                                             Retail sales 2019 in €                                                   7.90 b
                                                                                                                                                                                 Surrounding area                                            0.83 m                                                                                                   Re-let, prime rent in €/ m²                                           13.20
  Average rent 2019 in €/m² MF-G                                                               Hannover city                                                           4.16 b
                                                                                                                                                                                Arrivals (all accommodation types) 2018                      2.22 m                                                                                                   Re-let, average rent in €/ m²                                          9.20
    City                                                                        11.50          Surrounding area                                                        3.74 b
                                                                                                                                                                                                                                                        All values refer to the State Capital Hannover.
                                                                                                                                                                                 Hannover city                                               1.35 m                                                                                                 Home buying 2019
    City periphery                                                              9.50                                                                                                                                                                    Source: bulwiengesa AG; Surveys of Hannover Region; the area portfolio is a continua-
                                                                                             Rent 2019
                                                                                                                                                                                                                                                        tion of the portfolio survey of 2016, data as of mid-2019; data from market players for       Owner-occupied apartments, newbuilds, prime group in €/ m²            5,700
  Net initial yield in peak city locations 2019                               3.8 %                                                                                              Surrounding area                                            0.87 m
                                                                                               Prime rent in prime city location in €/m²*                                185                                                                            the middle of 2019
                                                                                                                                                                                Average length of stay in days                                                                                                                                        Owner-occupied apartments, newbuilds, average in €/ m²                4,400
Source: bulwiengesa AG; Surveys of the Hannover Region; information provided by                Average rent in prime city location in €/m²*                               145   (all accommodation types) 2018                                                                                                                                      Multipliers 2019
market players; data on office employees refer to employees subject to social security
                                                                                             Yields 2019                                                                         Hannover city                                                    1.7
contributions                                                                                                                                                                                                                                                                                                                                         Apartment blocks/investment properties, newbuilds, prime
                                                                                                                                                                                                                                                                                                                                                                                                                             28.4
                                                                                               Net initial yield in prime locations*                                   3.6 %     Surrounding area                                                 1.8                                                                                                 group 2019

 Cover picture: The area of the former main goods station is centrally located on              Net initial yield in specialist retail centres                           5.1 %   Key figures hotel chains Hannover                                                                                                                                     Apartment blocks/investment properties, newbuilds, average 2019        25.4
the Weiden-damm between the centre and the northern part of the city. In recent                                                                                                 (Fairmas) 2018                                                                                                                                                        Apartment blocks/investment properties, stock, prime group 2019        26.9
years, Aurelis Real Estate Service GmbH has extensively rebuilt the goods railway        *
                                                                                             Bahnhofstraße, Großer Packhofsltraße, Georgstraße                                   Occupancy rate, average 2018                                63.6 %                                                                                                   Apartment blocks/investment properties, stock 2019                     18.4
yard and the surrounding area on an plot of around 34,000 square metres and has
                                                                                         Source: Retail portfolio surveys commissioned by the Hannover Region (data as of
repositioned the property through a mix of sports, gastronomy, hotel, logistics and                                                                                              Room price, average 2018 in €                               104.50
                                                                                         the end of 2016); MB Research 2019; detail estimates provided by market players for
service companies. The project was acquired by BEOS AG in 2019 for its Corporate         mid-2019                                                                                RevPAR (revenue per room), average 2018 in €                 66.40     Values represent the annual average                                                       All values refer to the State Capital Hannover.
Real Estate Fund Germany III (CREFG III).
                                                                                                                                                                                 Net initial yield hotel in 2018                              4.5 %     Source: Lower Saxony State Statistical Office; 2019 Fairmas                               Source: bulwiengesa AG; data from market players for the middle of 2019

                 PROPERTY MARKET REPORT 2019                                                                                                                                                                                                                                                                                                                        PROPERTY MARKET REPORT 2019                                     INVESTMENT MARKET HANNOVER   6
PROPERTY MARKET REPORT 2019 - BUSINESS PROMOTION
CONTENTS

FOREWORD

Page 5

INVESTMENT        OFFICE            RETAIL
MARKET            PROPERTY MARKET   PROPERTY MARKET
Page 6            Page 16           Page 32

HOTEL             LOGISTICS         RESIDENTIAL
PROPERTY MARKET   PROPERTY MARKET   PROPERTY MARKET
Page 42           Page 52           Page 70

                  IMPRINT           MAPS

                  Page 90           Pages 15, 29, 41, 51, 67, 87

                                                                   3
PROPERTY MARKET REPORT 2019 - BUSINESS PROMOTION
THE PROPERTY MARKET IN THE HANNOVER REGION

                                                                                                                                                                             Dear Readers,

                                                                                                                                                                             The property market in the Hannover Region is developing dynamically and attracting new users,
                                                                                                                                                                             project developers and investors, as evidenced by full order books and numerous construction
                                                                                                                                                                             sites. The property sector is also gearing up to meet the challenges of the future: buildings are
                                                                                                                                                                             increasingly being thought of in a more ecological, intelligent and flexible way and are thus being
                                                                                                                                                                             developed, built and operated sustainably in the best sense of the word.

                                                                                                                                                                             The commercial property market in Hannover stands for yield-secure investments with develop-
                                                                                                                                                                             ment potential. Hannover is one of Germany’s top shopping addresses; logistics space is in strong
                                                                                                                                                                             demand throughout the region, and the state capital is Germany’s largest office market directly
                                                                                                                                                                             after the seven A-locations. The number of hotel beds will rise steadily in the coming years, and
                                                                                                                                                                             the city and surrounding area are experiencing strong demand for housing.

                                                                                                                                                                             For all submarkets, Hannover offers attractive investment opportunities and attracts investors
                                                                                                                                                                             who want to invest in locations that retain their value.

                                                                                                                                                                             Since 2003, together with 26 well-known partners from the property sector, the regional Business
                                                                                                                                                                             Promotion department has been compiling core data on all relevant submarkets of the region,
                                                                                                                                                                             presenting them in a clear and concise manner and ensuring compliance with the standards of
                                                                                                                                                                             the Gesellschaft für immobilienwirtschaftliche Forschung e. V. (gif - property industry research
                                                                                                                                                                             corporation). The results of the joint work are reviewed and supplemented by the renowned
                                                                                                                                                                             consulting firm bulwiengesa AG.

                                                                                                                                                                             Hannover is perceived as a strong property market location in Germany. The Property Market
                                                                                                                                                                             Report is an impressive testimony to the committed and trusting atmosphere of cooperation
                                                                                                                                                                             existing within Hannover’s property business community.

                                                                                                                                                                             Ulf-Birger Franz                                    Sabine Tegtmeyer-Dette
                                                                                                                                                                             Head of Business, Transport                         Head of Business and Environment
                                                                                                                                                                             and Education Department                            Department, First Town Councillor
                                                                                                                                                                             Hannover Region                                     State Capital Hannover

Comprising two single-storey buildings with a wooden facade joined by a sloping wooden roof, the V-shaped entrance building welcomes visitors to the
zoo with its arms wide open. Seen from the outside, the extraordinary building with the warm wooden cladding, the large animal silhouettes and the
striking roof, arouses curiosity about the zoo experience waiting inside. The building and its forecourt were designed by pape+pape architekten (Kassel)
and nsp landschaftsarchitekten (Hannover).

        4     PROPERTY MARKET REPORT 2019                                                                                                                                                                                                                            FOREWORD      5
PROPERTY MARKET REPORT 2019 - BUSINESS PROMOTION
INVEST-
                                                                                                                                                                                         MENT
                                                                                                                                                                                         MARKET
The office property Pod|BC is the striking prelude to a new quarter being built on the site of the former Oststadt Hospital. STRABAG Real Estate GmbH                                          The Hannover Region is an innovative indus-
developed the office property Pod|BC alongside Pod|BC green, a residential building with around 90 rental units. Universal-Investment partnered German
property manager Coresis to buy thePod|BC business centre on behalf of its Deutsche Wirtschaftszentren fund, which exclusively invests in office buildings
                                                                                                                                                                                               trial location, service metropolis and logistics
in major German cities. Pod|BC green was sold to Aberdeen Asset Management Deutschland AG.
                                                                                                                                                                                               hub for national and international markets.
                                                                                                                                                                                               The positive development of the regional
                                                                                                                                                                                               economy in recent years has led to sustained
                                          1.18 m                                                               510,000                                       €874 m                            demand for property in all submarkets. The
                                                                                                                                                                                               commercial property market in Hannover is
                                        Inhabitants at the beginning                                          Employees subject to social insurance          Investment volume in commercial
                                                     of 2019                                                          contributions mid-2018                      property market 2018
                                                                                                                                                                                               thus consolidating its position as the most
                                                                                                                                                                                               important location after the seven major
                                                                                                                                                                                               A-locations in Germany.

        6     PROPERTY MARKET REPORT 2019                                                                                                                                                                   INVESTMENT MARKET HANNOVER    7
PROPERTY MARKET REPORT 2019 - BUSINESS PROMOTION
Selected transactions 2018/2019

                                                                                                                                                                                           No.      Property name or address         Quarter Year   Seller                   Buyer                      Investor type            Area
                                                       HANNOVER LOCATION FACT CHECK
                                                                                                                                                                                           Office

                                                       	World-renowned brands, a strong economy based on                	With around 325,000 employees, Hannover is the                   1       Pod|Bc                           Q2      2019   STRABAG REAL ESTATE      CORESIS Management         Special fund               6,500 m²
                                                        medium-sized enterprises, and outstanding research                        central place of work in the region, while some                                                                   GMBH                     GmbH/Universal-
                                                        institutions are at home in the Lower Saxony state                        185,000 employees work in the surrounding areas.                                                                                           Investment GmbH
                                                        capital of Hannover and the Hannover Region.                                                                                        2       Telekom (Gradestraße. 18/20)     Q1      2019   Ashtrom Properties/      Hamburg Trust              Special fund              25,800 m²
                                                                                                                         	The regional unemployment rate was comparatively                                                                         Harel Insurance
                                                       	Around 49,300 companies make Hannover the most                           low at 6.4 % in June 2019 (down 0.1 % compared with                                                               Investments
                                                        important economic area in Lower Saxony.                                  June 2018).                                               3       Office and commercial building   Q4      2018   Jpmorgan                 Getec AG                   Project developer/        23,000 m²
                                                                                                                                                                                                    Joachimstraße                                                                                       Principal
                                                       	Nearly 510,000 people were working in the Hannover
                                                                                                                                                                                            4       Office and commercial building   Q3      2018   LIST Develop             RREEF Investment Ltd.      Special fund              25,000 m²
                                                        Region in mid-2018.
                                                                                                                                                                                                    (Vahrenwalder Straße 11)                        Commercial
                                                                                                                                                                                            5       Tower 31                         Q2      2018   Apollo Global Real       Aroundtown SA              Real Estate AG/REIT       23,000 m²
                                                                                                                                                                                                                                                    Estate

                                                 Investment market overview                                                                                                                 6       Former Postscheckamt             Q2      2018   Postbank                 BAUM Group/meravis         Project developer/        45,000 m²
                                                 2019 remains an exciting year for the German investment                has declined significantly and has engendered scepticism                    (Goseriede)                                                              Bauträger GmbH             Principal
                                                 market. On the one hand, market players can look back on               in the wider property investment market.                           Business
                                                 an already unusually long property market cycle, which
                                                                                                                                                                                            7       Office and commercial building   Q2      2019   Private investor         GlaserProjektInvest        Project developer/         2,000 m²
                                                 has had a significant impact on the investment market for              On the other hand, the interest rate level, which is
                                                                                                                                                                                                    Go.Six                                                                   Gmbh                       Principal
                                                 a long time. On the other hand, there are increasing signs             decisive for the property industry, is still at a historic low.
                                                                                                                                                                                            8       Galerie Luise                    Q1      2019   Accom Immobilien         MOMENI Immobilien          Project developer          13,500 m²
                                                 that a trend reversal could be in sight in the medium term.            A far-reaching turnaround in the interest rate structure
                                                                                                                                                                                                                                                    Gmbh                     Holding GmbH               Principal
                                                 For example, ongoing trade disputes, new customs barriers              has not yet happened. Despite the imminent change at the
                                                 and the unclear situation with regard to Brexit are leading            head of the European Central Bank, the ECB, the factors             9       Commercial building              Q3      2018   Kristensen Properties    Project Brühlstraße Gmbh   Project developer/          3,100 m²
                                                 to some uncertainty, which is having a negative impact on              that led to the long-term low-interest phase remains basi-                  (Hildesheimer Straße 41-43)                     A/S                                                 Principal
                                                 economic development.                                                  cally identical in the euro zone.                                   10      Shopping Centre                  Q2      2018   Rockspring Property      Warburg-HIH Invest Real    Special fund              14,500 m²
                                                                                                                                                                                                    in Zuckerfabrik Lehrte                          Investment Managers      Estate GmbH
                                                 At the same time, social changes and a change in consumer              Against this backdrop, the property investment market                                                                       Llp
                                                 behaviour are also having an impact on the property sector.            in and around Hannover developed dynamically in 2018,              Hotel
                                                 For example, the sentiment in the retail property market               with the first half of 2019 being a relatively quiet period by
                                                                                                                                                                                            11      H+ Hotel                         Q4      2018   H-Hotels AG              Deutsche Fondsvermö-       Asset/Fund manager/        179 rooms
                                                                                                                        comparison.
                                                                                                                                                                                                                                                                             gen AG (DFV)               Private equity

                                    Transaction volume of commercial property market
                                                                                                                                                                                            12      IntercityHotel                   Q3      2018   bauwo Grundstücks-       Institutional investor     Institutional investor     228 rooms
                                    Distribution according to submarkets 2014 to 2018                                                                                                                                                               gesellschaft mbH

                                                                                                                1,000
                                                                                                                                                                                            13      Arcadia Hotel                    Q1      2018   n/a                      HR Group                   Owner-occupier            120 rooms
                                    100
                                                                                                                                                                                                    Hannover-Laatzen
                                    90                                                                           900
                                                                                                                         Transaction volume in million €
    Share of transaction volume %

                                    80                                                                           800                                                                       Logistics/production

                                    70                                                                           700                                                                        14      Former main goods station        Q2      2019   Aurelis Real Estate      BEOS AG                    Special fund              19,000 m²
                                    60                                                                           600                                                                                Hannover                                        Service GmbH
                                    50                                                                           500                                                                        15      Logistics centre Häfele Lehrte   Q1      2019   bauwo Real Estate        LIP Invest Ltd.            Special fund              22,700 m²
                                    40                                                                           400                                                                                                                                Company mbH
                                    30                                                                           300                                                                        16      Amazon Sortation Center          Q3      2018   BAUM GROUP OF            L’Etoile Properties        Asset/Fund manager        34,000 m²
                                    20                                                                           200                                                                                Garbsen                                         COMPANIES                Koramco                    Private equity
                                    10                                                                           100                                                                        17      Former Lidl central Warehouse    Q2      2018   Lidl Stiftung & Co. KG   Garbe Industrial Real      Principal                 24,000 m²
                                    0                                                                              0                                                                                Wunstorf (Amazon Distribu-                                               Estate
                                                                                                                                                                                                    tion Centre)
                                                2014

                                                               2015

                                                                              2016

                                                                                           2017

                                                                                                       2018

                                                                                                                                                                                            18      Sonepar Hannover                 Q2      2018   Ernst Russ AG            n/a                        Asset/Fund manager        13,000 m²
                                          Office         Logistics and industry                   Volume in € million                                                                                                                                                                                   Private equity
                                          Retail         Hotel           Other
                                    Source: bulwiengesa AG; Data for the Hannover Region                                                                                                  The numbers refer to the map page 15.

8                               PROPERTY MARKET REPORT 2019                                                                                                                                                                                                                               INVESTMENT MARKET HANNOVER                    9
PROPERTY MARKET REPORT 2019 - BUSINESS PROMOTION
Transaction volume of the commercial property market
                                        Distribution according to size classes 2014 to 2018
                                                                                                                     INVESTMENT                                                                The first half of 2019                                                            Higher share of international investors
                                                                                                                                                                                                      Already in the first half of 2019, there is once again a                  The increased activity of international investors outside the
                                        900
                                                                                                                     VOLUMES IN THE                                                                   strong interest in office and commercial buildings. With                   traditional investment foci in the German metropolises is
                                                                                                                     HANNOVER REGION                                                                  around €159 million and a share of around 51 %, they                       also becoming increasingly noticeable in Hannover. As early
                                        800
                                                                                                                     ROSE IN 2018 BY                                                                  occupy the top rank of the asset classes being invested in.                as 2018, foreign investors invested about €310 million in
 Share of the transaction volume in %

                                                                                                                                                                                                      By the end of June 2019, €68 million was invested in                      Hanoverian properties, representing a share of 37 % of the
                                        700
                                                                                                                     €176 MILLION                                                                     industrial and logistics properties which again accounts                   total investment volume. With €218 million, the majority of
                                        600                                                                          TO AROUND                                                                        for the second largest share representing around 22 %                      these investments went to Hannover city. The remaining

                                        500
                                                                                                                     €874 MILLION.                                                                    of transaction volume.                                                     €92 million was invested in the surrounding region of the
                                                                                                                                                                                                      The investment volume in retail property in 2018 was                      state capital, preferentially in logistics properties.
                                                                                                                     more than €100 million hardly played a perceptible role.                         already exceeded in the first half of 2019 and amounted
                                        400
                                                                                                                     The two largest individual transactions were the sale of                         to €56 million by mid-year.
                                        300                                                                          the office and commercial building in Joachimstraße in                           In the hotel segment, no investment activities were
                                                                                                                     the fourth quarter of 2018 and Podbi Park, both of which                         recorded in the first six months, although the supply of
                                        200
                                                                                                                     changed hands for just under €100 million.                                       investment properties is currently high.
                                        100
                                                                                                                     Shortfall in properties in 2019
                                        0                                                                            There are already signs of a certain change in direction in
                                                                                                                     the first half of 2019. With transaction revenues of almost
                                                          2014

                                                                     2015

                                                                                 2016

                                                                                               2017

                                                                                                            2018

                                                                                                                     €313 million to date, the course of the year has been rather
                                              over € 100 m              € 50–100 m                    € 20–50 m      restrained. However, this is not due to a lack of interest,
                                                                                                                                                                                               Capital origin on the commercial property market 2018
                                              € 10–20 m                 € 5–10 m                      up to € 5 m    but to a lack of opportunities. For this reason, investors are

                                        Source: bulwiengesa AG; Data for the Hannover Region
                                                                                                                     again targeting larger projects. Transactions in the medium
                                                                                                                     size category between €20 and €50 million now account for
                                                                                                                     58 % of all transactions.                                                                                     Other

                                                                                                                     The transaction market underlines Hannover’s                                                                  Bank
                                                                                                                     importance as an office location and logistics market
                                                                                                                     For both 2018 and 2019, more than half of the investments                                          Closed-end fund
                                                                                                                     are accounted for by office property assets, underlining
                                                                                                                     the importance of Hannover as an office location.                                          Insurance/Pension Fund
                                                      Investment volume is approaching the

                                                                                                                                                                                       Buyer types
                                                      €1 billion threshold                                           Developments in 2018                                                                                     Open fund
                                                      The increased interest in the property investment market         Investments in office and commercial buildings
                                                      in Hannover can be clearly seen in the transaction turnover.     accounted for around 55 % of total investment volume                                         Real Estate AG/REIT
                                                      In 2018, this amounted to around €874 million invested in        in 2018. The transaction volume increased from approx.
                                                      commercial property in the Hannover Region. Compared             270 million (2017) to approx. 478 million (2018). The                                        Developer/Principal
                                                      with 2017, this represents an increase in turnover of €176       majority of the investments were implemented in the
                                                      million, while the total volume at that time amounted to         second half of the year.                                                       Asset/Fund manager/Private equity
                                                      €698 million. As a result, the investment volume is already      A s in 2017, 2018 again saw strong investment in indus-
                                                      well approaching the threshold of €1 billion, cementing          trial and logistics properties. In 2018, some €205 million,                                          Special fund
                                                      Hannover’s reputation as the largest and strongest               representing around a quarter of the total transaction
                                                      B-location in Germany in terms of investing in property.         volume, was invested in this submarket, more than two
                                                                                                                       thirds of which were invested in the second half of the year.
                                                      The majority of individual transactions in 2018 ranged           Investments in hotel (around €71 million) and retail
                                                                                                                                                                                                               of which foreign Investors
                                                      between €50 million and €100 million, amounting to               properties (€39 million) represent only a small share of
                                                      around a 44 % share. Transactions below €10 million or           total transactions in 2018.

                                                                                                                                                                                                                                            0

                                                                                                                                                                                                                                                        50

                                                                                                                                                                                                                                                                     100

                                                                                                                                                                                                                                                                                  150

                                                                                                                                                                                                                                                                                                   200

                                                                                                                                                                                                                                                                                                          250

                                                                                                                                                                                                                                                                                                                      300

                                                                                                                                                                                                                                                                                                                                  350

                                                                                                                                                                                                                                                                                                                                             400
                                                                                                                                                                                                                                                               Transaction volume in € million

                                                                                                                                                                                                                                                Buyer           Seller
                                                                                                                                                                                                                                            Source: bulwiengesa AG; Data for the Hannover Region

10                                      PROPERTY MARKET REPORT 2019                                                                                                                                                                                                                                      INVESTMENT MARKET HANNOVER                11
PROPERTY MARKET REPORT 2019 - BUSINESS PROMOTION
In 2018, the strong presence of internationally operating            The status quo leaves yields at their historically lowest
                                                 companies was also noted in property sales, with €210 million        levels. With a view to the near future, no major changes are
                                                 being transacted directly in Hannover city and a further             to be expected. By the end of 2019, yields will only weaken
                                                 €25 million in properties in the surrounding area. At just over      marginally. Due to the lack of supply, it is not expected at
                                                 50 % or just under €160 million to date, the first half of 2019 is   the moment that new records will be set in terms of total
                                                 even more characterised by sales by international investors.         transaction volume.

                                                 Outlook for 2019: increasing interest as supply declines
                                                 Currently, the investment market in Hannover is charac-
                                                 terised by the lack of supply. Many potential buyers are
                                                 confronted by a small number of commercial properties.
                                                 If European and global interest rate policy continues
                                                 along the trajectory of current low interest rates – and
                                                 there is no sign of a turnaround – it can be assumed that a
                                                 lively investment market in Hannover is also on the cards
                                                 provided that the adequate supply of properties on the
                                                 market allows this. The past development of net initial
                                                 yields was already characterised by a strong compression.

                                                                                                                      On 1,000 m² of floor space, the trend sport bouldering, i.e. climbing
                                                                                                                      without rope at jumping height, has moved into the main goods station
                                                                                                                      in Hannover. The Beta Boulder Halle offers state-of-the-art climbing
                                                                                                                      walls, a training area and an opportunity for snacks and drinks.

                                                                                                                                                                                                              Aurelis Real Estate Service GmbH is developing office space and a showroom for the sanitary specialist Bumke on one of the open
                                                                                                                                                                                                              spaces at the former main goods station site.

                         Net initial yield in prime locations 2014 to 2019                                                                                                                                 Property climate on the German investment market 2008 to 2019
                         Commercial property market Hannover

                                                                                                                                                                                              180
                         7

                                                                                                                                                                                              160
                         6.5

                                                                                                                                                                                              140
                         6

                                                                                                                                                                                              120
Net initial yield in %

                         5.5
                                                                                                                                                                                              100

                         5
                                                                                                                                                                                              80

                         4.5
                                                                                                                                                                                              60

                         4                                                                                                                                                                    40

                         3.5                                                                                                                                                                  20

                                                                                                                                                                                              0
                         3
                                                                                                                                              2019*

                                                                                                                                                                                                    2008

                                                                                                                                                                                                                    2009
                                                                                      2016

                                                                                                                         2018

                                                                                                                                                                                                                                2010
                                                                                                     2017
                                        2014

                                                               2015

                                                                                                                                                                                                                                                                                                                           2018
                                                                                                                                                                                                                                                                                                    2016

                                                                                                                                                                                                                                                                                                                                      2019
                                                                                                                                                                                                                                                                                2014

                                                                                                                                                                                                                                                                                            2015
                                                                                                                                                                                                                                                        2012

                                                                                                                                                                                                                                                                    2013

                                                                                                                                                                                                                                                                                                                 2017
                                                                                                                                                                                                                                            2011
                                  Logistics                Hotel                 Office          Retail                                                                                                            Logistics                Hotel                Office                Retail              Residential
                         Source: bulwiengesa AG; yield margins, the lower endpoints are given.                                                                                                             Source: bulwiengesa AG; German Hypo; Real estate market index (June 2019 data)

                         * Forecast

                             12   PROPERTY MARKET REPORT 2019                                                                                                                                                                                                                                                                INVESTMENT MARKET HANNOVER   13
PROPERTY MARKET REPORT 2019 - BUSINESS PROMOTION
NEUSTADT a. Rbge

                                                                                                                                                                                                                                                                                                                                                                                                                                 B3
                                                                                                                                                                                                                                                                                                                                                         Großburgwedel
                                                                                                                                                                                                               Selected projects on the investment market
                                                                                                                                                                               B6
                                                                                                                                                    B 442

                                                                                       Steinhuder Meer                                                                                                                                                         A 352

                                                                                                                                                                                                                     Langenhagen
                               B 441
                                                                                                                                                                                    GARBSEN                                                                    B 522

                                                                                                                            WUNSTORF                                                                                                                                                                                                                                                A 37

                                                                                                               B 441                                                                                                                                                                                                                                                                                                   B 443

                                                                                                                                                                                                        E 30                     A2

                                                                                                                                                                       B 441          Lein
                                                                                                                                                                                           e
                                                                                                                                                                                                                                                                                                                                   1
                                                                                                                                                                                                                                                                                    2
                                                                                                                                                                                                                                                                                        M it
                                                                                                                                                                                                                                                                                               te lla ndkanal
                                                                                                                                                         l
                                                                                                                                  B 442
                                                                                                                                                    dkana                                                                             B6

                                                                                                                                                llan                                                                                                                                                                               B3

                                                                                                                                           Mitte                                                                                                                                4

                                                                                                                                                                                               SEELZE
                                                                                                                                                                                                                      B 441
                                                                                                                                                                                                                                                                       14                                 HANNOVER                                                  A7

                                                                                                                                                                                                                                                                                                                                                                                                                           10
                                                                                                                                                                                                                                                                                7           12
                                                            ndk anal                                                                                                                                                                                                                    6
                                                    Mittella                                                                                                                                                                                                                                          3
                                                                                                                                                                                                                                                                            5                         8
                                                                                                                                                                                                                                                   18
                                                                                                                                                                                                                                                                                                 9

                                                                                                                                                                                                                                                                                                                                                                             B 65

                                                                                                   BAD                                                                                                                                                                                                                                                                                                             B 443

                                                                                               NENNDORF
                                                                                                                                                                                                                                                        B 65

                                                                                                                                                                                                                                                                                                                                  B6    11

       STADTHAGEN
In Lehrte, located directly on the A 2, a 22,000 m² shipping centre for the hardware manufacturer Häfele has been completed, which the developer,
bauwo Grundstücksgesellschaft mbH, already sold to LIP InvEst GmbH     B 65
                                                                          from Munich for €20 million in January 2019.                                B 65

                                                                                                                                                      BARSINGHAUSEN                            GEHRDEN                                     B 217                                                                             13

                                                                                                                                                                                                                                                                                                                                                                         B 443
                                                                                                                                                                                                                                                                            B3

                                                                                                                                                                                                                                                                                                                        Lein
                                                                                                                                                                                                                                                                                                                             e               A 37

                                                                                                                       The Hanoverian property company Glaser-
                                                                                                                       ProjektInvest GmbH acquired a mixed-use                                                                                                                                                                                                                        0         1           2   3 km

                                                                                                                                                                                                                                                                                                                                         Laatzen
                                                                                                                                                                                                                                                                                                                                                                                                                           N
                                                                                                                       existing building opposite the Scoreboard
                                                                                                                       skyscraper from a private community of
                                                                                                                       heirs as another property for its holdings
                                                                                                                       portfolio. The property is being repositioned
                                                                                                    E 30               as a retail space under the name GO.Six.                                                Office                                                                       Hotel                    B 443                                    Key
                                                                                                                                                                                                                                                                                                                                                    B6

                                                                                                                                                                                                 WENNIGSEN     1
                                                                                                                                                                                                                      Pod|BC                                                                   11
                                                                                                                                                                                                                                                                                                          H+ Hotel                                            * outside the map section

                                                                                                                                                                                                                                                                  PATTENSEN
                                                                                                                                                                                                               2                                                                             12
                                                                                        A2                                                                                                                            Telekom                                            Intercity Hotel

                                                                                                                                                                                                               3                                                                             13
                                                                                                                                                                                                                    	Office and commercial building/                                                     Arcadia Hotel                                             Airport
                                                                                                                               B 442                                                                                  Joachimstraße

                                                                                                                                                                                                               4        B 217                                                                        B3
                                                                                                                                                                                                                                                                                                                                                             SARSTEDT
                                                                                                                                                                                                                                                                                                                                                                Exhibition grounds
                                                                                                                                                                                                                      Office and commercial building/
                                                                                                                                                                                                                      
                                                                                                                                                                                                                      Vahrenwalder Straße                                                    Logistics                                                              Main railway station/long-distance rail
                                                                                                                                                                                                                                                                                                                                                                                                                       B 494
                                                                                                                                                                                                               5
                                                                                                                                                                                                                      Tower 31                                                               14
                                                                                                                                                                                                                                                                                                          Former goods station Hannover                                   Tram
                                                                                                                                                                                                                      
                                                                                                                       HANNOVER

                                                                                                                                                                                                                                                                                                                              e
                                                                                                                                                                                                               6                                                                                                                                                                    E 45
                                                                                                                                                                                                                                                                                                                                                                          Suburban rail

                                                                                                                                                                                                                                                                                                                            n
                                                                                                                                                                                                                      Former Postbank office block                                           15
                                                                                                                                                                                                                                                                                                          Logistics centre Häfele Lehrte*
                                                                                                                                                                                                                      

                                                                                                                                                                                                                                                                                                                        Lei
                                                                                                                       CONSOLIDATES
                                                                                                                          BAD MÜNDER
                                                                                                                                     ITS                                                                                                                                                     16
                                                                                                                                                                                                                                                                                                          Amazon Sortation Center Garbsen*                                City boundary
                                                                                                                                                                                                                                                                                                                                                                                                A7

                                                                                                                                                                                                  SPRINGE
                                       B 83
                                                                                                                       REPUTATION AS THE                                                                       Retail                                                                        17
                                                                                                                                                                                                                                                                                                     	Former main Lidl warehouse Wunstorf

                                                                                                                       BIGGEST AND STRONGEST                                                                   7
                                                                                                                                                                                                                    	Office and commercial buildings/GO.Six
                                                                                                                                                                                                                                                                                                       (Amazon distribution centre)*                                                       B6

                                                                                                                       B-LOCATION IN GERMANY.
                                                                                                                                                                                                                                                                                             18
                  er

                                                                                                                                                                                                                                                                                                     	Sonepar Hannover
                 es

                                                                                                                                                                                                               8
                W

                                                                                                                                                                                                                      Galerie Luise

                                                                                                                                                                                                               9
                                                                                                                                                                                                                    	Commercial building/
                                                                                                                                                                                                                      Hildesheimer Straße

                                                                                                                                                            B 217
                                                                                                                                                                                                               10
                                                                                                                                                                                                                      Shopping centre Zuckerfabrik Lehrte
                                                                                                                                                                                                                                                                                                                                        B1
                                                                                                                                                                                                                                                                                                                                                                                                                                HILDESH
                                                                                                                                                                                                                                                                                B3
                                                                                                                                                                                                                                                                                                                                                                                                    B 243

                                                                                   W                                                                                                  B 442

       14     PROPERTY MARKET REPORT 2019                                                                                                                                                                                                                                                                                                                INVESTMENT MARKET HANNOVER                                         15
PROPERTY MARKET REPORT 2019 - BUSINESS PROMOTION
OFFICE
                                                                                                                                                                              PROPERTY
                                                                                                                                                                              MARKET
The new DB building in Rundestraße conveys openness: since June, around 950 employees have been working here in the €64 million headquarters in                                  After the seven major A-locations,
Lower Saxony. The building is owned by Savills Investment, which leases the offices to DB. The building was constructed by the Essen-based project
developer KÖLBL KRUSE GmbH according to a design by the Berlin architects Hascher Jehle.
                                                                                                                                                                                 Hannover is the largest and at the same
                                                                                                                                                                                 time one of the most dynamic locations
                                                                                                                                                                                 on the German property market. In
                                                                                                                                                                                 the last five years, around 245,000 m²
                                €17.10/m²                                                            180,000 m²                                      3.8 %                       of office space have been newly built
                                                                                                                                                                                 and a further 115,000 m² have been
                                               Prime rent 2019                                                         Area turnover 2018            Net initial yield 2019
                                                                                                                                                                                 completely renovated. By 2023 a
                                                                                                                                                                                 further 330,000 m² (85,000 m² of
                                                                                                                                                                                 which refurbished) will have been added.

        16    PROPERTY MARKET REPORT 2019                                                                                                                                                                               17
OFFICE MARKET FACT CHECK

                                                        	Includes Hannover city and towns of Garbsen,           	Since 2014, an average of 138,000 m² turnover per
                                                          Laatzen and Langenhagen.                                 year has been achieved.

                                                        	5.04 million m² of office space (of which around       	T he investment risk is low due to the relatively low
                                                          4.56 million m² in Hannover city).                       vacancy rates; the net initial yield in 2019 is 3.8 %.

                                                        	L argest floor space after the seven A-locations in    	In 2018, the vacancy rate in Hannover was only 3.1 %

                                                                                                                                                                                                                          Continental
                                                          Germany.                                                 while the average vacancy rate in the A-location cities
                                                                                                                   was 3.7 % and in the B-location cities 3.8 %. In 2019,
                                                        	153,000 office employees in Hannover city (2019).       the vacancy rate in Hannover will fall further to 2.7 %.

                                                        	T he number of office workplaces has grown by          	Investment transaction volume was approx.
                                                          around 15,000 or 11 % over the last five years.          €478 million (2018).

                                                        	Since 2014, a total of 690,000 m² of office space
                                                          has been transacted in the Hannover office
                                                          property market.                                                                                                                                                                                                                   Wabco?
                                          Office space turnover 2014 to 2018                                     Office property turnover increased noticeably in 2018
                                                                                                                 The Property Report Project Group Hannover identified
                                          180
                                                                                                                 some 180,000 m² newly rented owner-occupied office            With its new Global Technology and Innovation Center, WABCO is further expanding its global product development and engineering capabilities.
                                                                                                                 areas in Hannover, Garbsen, Laatzen and Langenhagen           Some €25 million have been invested in the 11,500 m² building. It offers modern workplaces for more than 420 employees in Hannover as well as
                                          160                                                                                                                                  innovatively organised offices to facilitate cooperation with the worldwide product development teams.
                                                                                                                 during 2018. Turnover climbed year-on-year by 35,000 m²
                                                                                                                 (plus 24 %) and is approximately 32 % above the average
                                          140
                                                                                                                 for the years 2014 through 2018 (138,000 m²).
     Space turnover in thousand m² MF-G

                                                                                                                                                                                                                                                                                                   Waste disposal company aha is planning a new building
                                          120                                                                    City periphery and arterial roads report strong turnover                                                                                                                          for its head office built to passive house standards in
                                                                                                                                                                                                                                                                                                   Groß-Buchholz. Designed by Bremen architect’s office
                                                                                                                 Most turnover for office properties during 2018 were                                                                                                                              S3, the plans foresee social facilities and offices for
                                          100                                                                    registered in the city periphery and the main arterial                                                                                                                            about 500 waste disposal workers and office staff.
                                                                                                                 roads: at just under 95,000 m², this figure represents
                                          80                                                                     over one half of office space turnover, strongly influenced
                                                                                                                 by the start of construction of the new head office of
                                          60                                                                     Continental AG (around 40,000 m² of office space).

                                          40                                                                     Prime rent climbs in city and on arterial roads
                                                                                                                 Prime rent climbed significantly compared with 2017, at

                                          20
                                                                                                                 17 €/m² at the end of 2018 – an increase of €1.70. Last
                                                                                                                 year, the prime rent of 13.50 €/m² was maintained on the
                                                                                                                 city periphery and the main arterial roads. In previous
                                          0
                                                                                                                 years the rent/m² was considerably less than €11.
                                                                                                                                                                                                                                                                                                   OFFICE PROPERTY
                                                               2014

                                                                       2015

                                                                                 2016

                                                                                           2017

                                                                                                      2018

                                                                                                                                                                                                                                                                                                   TURNOVER IN 2018
                                                Rent, region                       Owner-occupied, region
                                                Rent, Hannover                     Owner-occupied, Hannover
                                                                                                                                                                                                                                                                                                   IS 24 % UP ON THE
                                          Source: Hannover Region surveys, details provided by market players
                                                                                                                                                                                                                                                                                                   PREVIOUS YEAR.

18    PROPERTY MARKET REPORT 2019                                                                                                                                                                                                                                                                     OFFICE PROPERTY MARKET                   19
Office space turnover based according to size 2018

                                                                                                                                                                                                                                        3%
                                                                                                                                                                                                                          4%

                                                                                                                                                                                                             10 %

                                                                                                                                                                                                  18 %                                                                                                               47 %

                                                                                                                                                                                                            18 %

                                                                                                                                                                                  Up to 300 m²                     301–500 m²                      501–1,000 m²
                                                                                                                                                                                  1,001–2,000 m²                   2,001–3,000 m²                  3,001 and more m²
                                                                                                                                                                               Source: Hannover Region surveys; details provided by market players for number of rental contracts (n = 185)

                                                                                                                                                                               The public sector and industry shape transactions in 2018                       The highest rents¹ in 2018 and also up to the middle of
                                                                                                                                                                               In addition to the ground-breaking ceremony for the new                         2019 were noted in the inner-city area – in some cases
                                                                                                                                                                               Continental AG building in 2018, two major leases in EXPO                       significantly higher – at up to 19 €/m² for very good new
                                                                                                                                                                               Park/Kattenbookstrift in Hannover’s south are among                             construction properties and top refurbished spaces. Even on
                                                                                                                                                                               the largest deals in 2018: The State of Lower Saxony                            the outskirts of the city and on arterial roads, prime rents of
                                                                                                                                                                               has leased 10,000 m² of office space at Expo Plaza and                          up to 14.50 €/m² can be achieved in very good properties.
                                                                                                                                                                               FinanzIT has signed a lease agreement for 14,000 m² of
                                                                                                                                                                               office space in the former IBM building.                                        Office property investments in demand
                                                                                                                                                                                                                                                               In recent years, after the prime 7 city locations,
                                                                                                                                                                               Positive prospects for 2019                                                     Hannover has become one of the most sought-after
                                                                                                                                                                               By mid-2019, turnover is around 70,000 m². The largest                          German locations for investments. Due to the low
                                                                                                                                                                               individual contract is a lease on Hans-Böckler-Allee by the                     market risk, stable developments and good growth
                                                                                                                                                                               State of Lower Saxony for the Ministry of Culture (approx.                      prospects, investors from Germany and abroad are inter-
                                                                                                                                                                               7,000 m²). Further larger individual deals (> 3,500 m²)                         ested in properties in Hannover. In 2018, office market
                                                                                                                                                                               were brokered in the Lahe area and in the Expo Park in                          transactions with a volume of approx. €478 million were
                                                                                                                                                                               Hannover’s south.                                                               registered in the Hannover Region. The net initial yield
                                                                                                                                                                                                                                                               at the end of 2018 was 4.3 %; a further decline to 3.8 %
                                                                                                                                                                               In view of the projects under construction or just completed                    is expected in the course of 2019.
                                                                                                                                                                               in the city centre, the main players on the Hannover office
                                                                                                                                                                               property market unanimously expect prime rents to remain                        1
                                                                                                                                                                                                                                                                   The maximum rent achieved is the highest nominal rent before service
                                                                                                                                                                                                                                                                   costs registered in a rental agreement concluded in the respective
                                                                                                                                                                               at the strong level of the previous year in the course of 2019                      reporting period irrespective of the local submarket and the quality and
                                                                                                                                                                               and to rise slightly to 17.10 €/m².                                                 size of the leased space. Not only rental agreements are taken into account
                                                                                                                                                                                                                                                                   here, but also lease extensions that are not counted as rental income.
At the end of July 2018, the ground-breaking ceremony was held for Continental AG’s new campus. 1,250 jobs will be created at the centrally located Pferdeturm site.
Previously the firm’s business activities were distributed throughout the city. In the future all work will be pooled in the new building and will mark a new chapter in the
history of the company. The design by the Berlin-based architectural firm Henn envisages, inter alia, spanning Hans-Böckler-Allee with an approx. 70-m-long bridge to
link the buildings.

        20     PROPERTY MARKET REPORT 2019                                                                                                                                                                                                                                                          OFFICE PROPERTY MARKET                       21
Office area turnover according to location 2018
                                                                                                                                 Vacancies continue to fall
                                          2%                                                                                     Despite many completions over the past five years,
                                     1%                                                                                          vacancies have not increased. The new space coming
                                                                                                                                 onto the market is being fully absorbed. At the of 2018,
                       1%                                                                            18 %
                                                                                                                                 the vacancy rate² in Hannover was 3.1 %, some 400 basis
                                                                                                                                 points lower than in 2017. In absolute terms, the rent-                                                                                                                                                     Directly opposite the New Town Hall, the BAUM group
                                                                                                                                 able vacancies in Hannover fell by a further 10,000 m² to                                                                                                                                                   of companies has completed the extensive revitalisa-
                                                                                                                                                                                                                                                                                                                                             tion of the former adult education centre. The remains
       17 %                                                                                                                      140,000 m². Market players assume that the vacancy rate                                                                                                                                                     of the medieval city wall are preserved in the new
                                                                                                                                 will fall further in 2019 (net minus 15,000 m²) and settle                                                                                                                                                  building named Rathaus Kontor. The City of Hannover
                                                                                                                                                                                                                                                                                                                                             has taken out a long-term lease. On the ground floor
                                                                                                                                 at 2.7 %. This is the lowest vacancy rate since the begin-
                                                                                                                                                                                                                                                                                                                                             there is, for example, an extracurricular educational
                                                                                                                                 ning of market reporting for Hannover. In the surrounding                                                                                                                                                   space on Hannover’s urban society during the National
                                                                                                                                 area, the vacancy rate remains almost stable at 5.2 %.                                                                                                                                                      Socialist era.
       9%

                                                                                                                                 Completion volume continues to grow
                                                                                                                                 In the last five years (2015 to year-end 2019), around 245,000
                                                                                                                                 m² of office space has been newly built and a further 115,000
                                                                                                                                 m² has been completely refurbished. By 2023, a further
                                                                                                                                 330,000 m² (85,000 m² of which will be refurbished) will
                                                                                                 53 %
                                                                                                                                 be added.

                                                                                                                                 2
                                                                                                                                     The basis is a survey update by bulwiengesa AG at the end of 2015/
                                                                                                                                     beginning of 2016 of its full survey of office space and vacan-
                                                                                                                                     cies. bulwiengesa AG’s forecast and model calculations are now
                                                                                                                                     based on the full inventory surveys for 2009, 2012 and 2015.
                     City                                                   City periphery/arterial roads
                     Hannover, other locations                              Expo-Park
                     Roderbruch/Karl-Wiechert-Allee                         Lahe
                     Surrounding area
              Source: Hannover Region surveys; data provided by market players, with respect to total areas in m²

       Net initial yield in prime locations 2014 to 2019                                                           Office rents in Hannover 2014 to 2019*

       6,0                                                                                                         18
                                                                                                                   17
       5,5                                                                                                         16
                                                                                                                   15
       5,0                                                                                                         14
                                                                                                    in €/m² MF-G

                                                                                                                   13
                                                                                                                   12
in %

       4,5
                                                                                                                   11
       4,0                                                                                                         10
                                                                                                                   9
       3,5                                                                                                         8
                                                                                                                   7
       3,0                                                                                                         6
              2014

                              2015

                                           2016

                                                          2017

                                                                         2018

                                                                                       2019

                                                                                                                          2014

                                                                                                                                             2015

                                                                                                                                                              2016

                                                                                                                                                                                2017

                                                                                                                                                                                                 2018

                                                                                                                                                                                                               2019

                 Net initial yield, prime location, office                                                                 Prime rent, city                                      Prime rent, city periphery
       Source: bulwiengesa AG, for yield spreads the respective lower end is given
                                                                                                                           Average rent, city                                    Average rent, city periphery
                                                                                                                                                                                                                       Located in the Science and Technology Park Hannover, near the Leibniz University’s new Mechanical Engineering Campus in Garbsen, the Technopark Hannover is a
                                                                                                                   Source: bulwiengesa AG, Hannover Region surveys, data provided by market players
                                                                                                                                                                                                                       modern competence centre for approx. 30 companies and research institutions. Modern working areas and innovative working environments are created on up to
                                                                                                                   * T he values given for 2019 are based on data provided by market players on developments in the   40,000 m² of rental space, which can be flexibly adapted to individual requirements, such as sterile clean rooms for systems development and testing, or workshops
                                                                                                                      first two quarters 2019.
                                                                                                                                                                                                                       for product development.

                 22         PROPERTY MARKET REPORT 2019                                                                                                                                                                                                                                                                                         OFFICE PROPERTY MARKET                      23
Flexible office space and co-working                                                                             Office vacancy rate 2014 to 2019*
                                                                                                                                                                                                               conquer Hannover
                                                                                                                                                                                                                                                                                                                                350                                                      7%
                                                                                                                                                                                                               Flexible office space in Hannover is mainly found in
                                                                                                                                                                                                               several classic business centres in the city centre and                                                          300                                                      6%
                                                                                                                                                                                                               on the arterial roads in the north and northeast. There

                                                                                                                                                                                                                                                                                                Vacancies in thousand m² MF-G
                                                                                                                                                                                                               are also co-working spaces adjacent to the city centre.                                                          250                                                      5%
                                                                                                                                                                                                               The best-known example of this market segment is

                                                                                                                                                                                                                                                                                                                                                                                              Vacancy rate in %
                                                                                                                                                                                                               Hafven with around 2,000 m² of office and workshop                                                               200                                                      4%
                                                                                                                                                                                                               space. Rent24 and Design Offices will open the first
                                                                                                                                                                                                               major hybrid locations in 2019 and 2020. The new Design                                                          150                                                      3%

                                                                                                                                                                                                               Offices premises on Vahrenwalder Strasse alone will
                                                                                                                                                                                                               provide over 300 jobs. By the end of 2020, including the                                                         100                                                      2%

                                                                                                                                                                                                               announced projects, there will be a total of 17 flexible
                                                                                                                                                                                                               office locations with around 25,000 m² of space and                                                              50                                                       1%

                                                                                                                                                                                                               1,600 jobs in Hannover.
                                                                                                                                                                                                                                                                                                                                0                                                        0%

                                                                                                                                                                                                                                                                                                                                      2014

                                                                                                                                                                                                                                                                                                                                              2015

                                                                                                                                                                                                                                                                                                                                                       2016

                                                                                                                                                                                                                                                                                                                                                                2017

                                                                                                                                                                                                                                                                                                                                                                       2018

                                                                                                                                                                                                                                                                                                                                                                                2019
                                                                                                                                                                                                                                                                                                                                Vacancies, Hannover           Vacancy rate, Hannover
                                                                                                                                                                                                                                                                                                                                Vacancies, Region*            Vacancy rate, Region
                                                                                                                                                                                                                                                                                                               * Value for region (Garbsen, Laatzen, Langenhagen)

                                                                                                                                                                                                                                                                                                               The vacancy figures are based on office space occupancy surveys in 2008,
                                                                                                                                                                                                                                                                                                               2012 and 2015 for the Hannover market area and extrapolated for the
                                                                                                                                                                                                                                                                                                               following years. For the surrounding towns, the data is based on a specific
Hafven Hannover is Hannover’s first large co-working location. The Hafven community now houses more than 1,300 persons, including freelancers,                                                                                                                                                                 vacancy survey carried out as of 2015.
employees, as well as start-ups and established companies. Co-working and maker space is offered on more than 2,000 m², including office workplaces,
                                                                                                                                                                                                                                                                                                               Source: bulwiengesa AG, Hannover Region surveys: details provided by
meeting and workshop rooms, a FabLab, wood and metal workshops as well as a separate café.                                                                                                                                                                                                                     market players

                                                                                                                    Some two years after the excavation of the
                                                                                                                    foundations, completion has taken place of the
                                                                                                                    new administration building at Schützenplatz with
                                                                                                                    its 200-m-long red brick façade, up to six floors
                                                                                                                    and 22,000 m² of usable space. Hannover city
                                                                                                                                                                                              Completions in office market 2014 to 2023*
                                                                                                                    has entered into a 30-year lease agreement with
                                                                                                                    hanova and calls its new address the "Hannover-
                                                                                                                                                                                              200
                                                                                                                    ServiceCenter am Schützenplatz".

                                                                                                                                                                                              175

                                                                                                                                                                        in thousand m² MF-G
                                                                                                                                                                                              150

                                                                                                                                                                                              125
                                                                                                                                                                                                                                                                                                                                      BY 2023 THERE
                                                                                                                                                                                              100
                                                                                                                                                                                                                                                                                                                                      WILL BE A GROWTH
                                                                                                                    BY THE END OF 2020,
                                                                                                                                                                                              75
                                                                                                                                                                                                                                                                                                                                      OF 330,000 M² OFFICE
                                                                                                                    THE SUPPLY OF FLEXIBLE                                                    50
                                                                                                                                                                                                                                                                                                                                      SPACE THROUGH
                                                                                                                    AND CO-WORKING SPACE                                                      25
                                                                                                                                                                                                                                                                                                                                      NEW CONSTRUCTION
                                                                                                                    WILL INCREASE TO                                                          0                                                                                                                                       AND RENOVATION.
                                                                                                                    AROUND 25,000 M².

                                                                                                                                                                                                                                                           2020*

                                                                                                                                                                                                                                                                           2022*

                                                                                                                                                                                                                                                                                   2023*
                                                                                                                                                                                                                                                 2019*

                                                                                                                                                                                                                                                                   2021*
                                                                                                                                                                                                                                         2018
                                                                                                                                                                                                                        2016
                                                                                                                                                                                                        2014

                                                                                                                                                                                                                2015

                                                                                                                                                                                                                                2017
                                                                                                                                                                                                    Newbuild completions Hannover                        Refurbishments Hannover
                                                                                                                                                                                                    Newbuild completions Region
                                                                                                                                                                                              * B ased on the spring forecast of bulwiengesa AG; Hannover Region survey, details provided by
                                                                                                                                                                                                 market players; data as at Q3/2019

       24     PROPERTY MARKET REPORT 2019                                                                                                                                                                                                                                                                                                             OFFICE PROPERTY MARKET                 25
Selected office property projects

                                                                Investor,                                                     Status                                                                     Investor,                                                         Status
 No.     Property                   Address                                                    Area in m² MF-G                             No.   Property                    Address                                                      Area in m² MF-G
                                                                developer or user                                             completion                                                                 developer or user                                                 completion
 New builds                                                                                                                                 21   KraussMaffei Berstorff      VGP Park Laatzen            VGP Gruppe                       18,000 m²                        Q4/2022
                                                                                                                                                                                                                                          office 37,000 m² production/
 Completions
                                                                                                                                                                                                                                          research & development
   1     Deutsche Bahn AG           Rundestraße/Hamburger       Savills KÖLBL KRUSE GmbH       25,000 m² office               Q2/2019
                                                                                                                                            22   Faurecia                    Garbsener Landstraße        BAUM Unternehmensgruppe          17,500 m² gross floor area       Q4/2021
                                    Allee (former ZOB)
                                                                                                                                                                                                                                          office, social and special
   2     Admin building Public      Schützenplatz 1             hanova                         19,000 m² office               Q1/2019                                                                                                     areas 16,000 m² gross floor
         Order                                                                                                                                                                                                                            area production, research and
   3     WABCO Engineering Inno-    Am Lindener Hafen 21        WABCO Fahrzeug-systeme         11,500 m² office/laboratory    Q3/2018                                                                                                     development
         vation Center (2nd CP =                                GmbH                           Owner-occupation                             23   City Gate Nord (2nd CP)     Vahrenwalder Straße 236     Projektentwicklung HRG &         11,000 m² gross floor area       2022
         construction phase)                                                                                                                                                                             Delta Bau GmbH & Co. KG          office/retail
   4     City Gate Nord (1. CP/     Vahrenwalder Straße 236     Projektentwicklung HRG &       9,000 m² office                Q2/2018       24   25 Medical building         Berliner Allee 20           Ärztekammer Niedersachsen        10,000 m² office for own use     2021
         Vodafone)                                              Delta Bau GmbH & Co. KG
                                                                                                                                            25   Siemens AG                  Werner-von-Siemens-         Siemens Real Estate              10,000 m² GFA office             Q3/2020
   5     Pod|BC                     Podbielskistraße 382        STRABAG Real Estate GmbH       6,500 m² office                Q4/2018
                                                                                                                                                                             Straße 1, Laatzen                                            for own use
   6     Bürohaus am Park           Senefelderstraße, Laatzen   VALENTIN KLEIN Immobilien      6,500 m² office                Q3/2019       26   Büroprojekt MS4             Mailänder Straße 4          Delta Bau AG                     9,000 m² office                  2022
         der Sinne                                              GmbH & Co. KG
                                                                                                                                            27   MTU                         Münchner Straße,            Wirtschaftsförderungs-           6,800 m² GFA office              Q2/2021
   7     Telekom AG                 Elfriede-Paul-Allee 15      DIBAG Industriebau AG          5,500 m² office                Q3/2018
                                                                                                                                                                             Langenhagen                 gesellschaft Langenhagen mbH
   8     DHL Freight                Münchner Straße 23,         DHL Freight GmbH               3,800 m² office                Q3/2019       28   Residential and retail      Aronstabweg 2-6             Fischer Bau GmbH                 5,200 m² office                  Q4/2020
                                    Langenhagen                 Deutsche Post DHL Group        Owner-occupation                                  building Seelhorster                                                                     8,100 m² residential
   9     MARQ Marstall Quarree      Am Marstall                 STRABAG Real Estate GmbH       3,020 m² office                Q1/2018            Garten
                                                                                               520 m² gastronomy                            29   Businesspark                Kirchhorster Straße 33/     BOG 21 GmbH                      3,700 m² office                  2021
                                                                                               700 m² residential                                Hannover-Lahe               corner Im Klingenkampe 46
  10     DB Netz AG (Erweiterung)   Lindemannallee 3            DB Netz AG                     2,500 m² office                Q1/2019       30   aha-Zentrale                Karl-Wiechert-Allee 60      aha Zweckverband Abfall-         3,400 m² office for own use      2023
                                                                                                                                                                                                         wirtschaft Region Hannover
   11    Office project             Planetenring 39-41,         Rahlfs Immobiliengruppe        2,450 m² office/practice       Q4/2018
         Planetencenter             Garbsen                                                                                                 31   Buchholzer Grün             Podbielskistraße 386-388    Hanseatic Group                  2,400 m² office, 600 m² retail   Q4/2020

  12     Schindler                  Boulevard der EU 23         Nebel Immobilien               2,000 m² office                Q3/2018       32   Residential and retail      Willi-Blume-Allee           HOCHTIEF Infrastructure          4,800 m² residential             Q4/2020
                                                                                                                                                 building Steinbruchsfeld                                GmbH Building Hannover           1,900 m² office/practice
  13     B6 Office                  Bremer Straße 29, Garbsen   Langwost                       1,700 m² office                Q3/2018
                                                                                                                                                                                                         Wohnen im Steinbruchsfeld        790 m² gastronomy/ retail
                                                                Unternehmensgruppe             (in part owner-occupation)
                                                                                                                                                                                                         GmbH                             trade
  14     State office of health     Roesebeckstraße             Land Niedersachsen             1,100 m² office/laboratory     Q2/2019
                                                                                                                                            33   Assure Consulting           Chicago Lane                assure consulting GmbH           1,600 m² office (co-working)     2021
         (extension)                                                                           Owner-occupation
                                                                                                                                                 Co-Working
  15     LIVIN                      Am Marstall/Am Hohen        HOCHTIEF Infrastructure GmbH   2,600 m² residential           Q3/2018
                                                                                                                                            34   Bumke                       Am Weidendamm               Aurelis Real Estate Service      1,500 m² office 850 m²           Q2/2020
                                    Ufer 5 a/b                  Building Hannover, hanova      920 m² gastronomy
                                                                                                                                                                                                         GmbH                             warehouse 600 m² exhibition
                                                                                               750 m² office
                                                                                                                                           Concrete planning
 Under construction/in preparation
                                                                                                                                            35   Sky City Hannover Airport   Flughafenstraße ,           BAUM Unternehmensgruppe          25,000 m² GFA office
  16     Continental AG             Hans-Böckler-Allee 30/49    Continental AG                 46,000 m² GFA office           2021
                                                                                                                                                                             Langenhagen
         Zentralverwaltung                                                                     Owner-occupation
                                                                                                                                            36   Office ensemble             B 3/corner Weetzener        FIH Fürst Immobilien             18,000 m² GFA office/practice/   2022
  17     Taurus Technopark          Hollerithallee 18           Taurus Holding                 40,000 m² GFA office/          Q4/2021
                                                                                                                                                 Hemmingen                   Landstraße, Hemmingen       Hannover GmbH                    retail/ gastronomy
                                                                                               laboratory/workshop
                                                                                                                                            37   Office project              Marktstraße, Laatzen        VALENTIN KLEIN Immobilien        14,000 m² GFA office             2022
  18     Office and commercial      Vahrenwalder/Ecke           LIST Develop Commercial        25,000 m² GFA office/retail/   Q4/2020
                                                                                                                                                 Laatzen-Mitte                                           GmbH & Co. KG
         building Vahrenwald        Philipsbornstraße           GmbH & Co. KG                  gastronomy/services/hotel
                                                                                                                                            38   Ratsquartier                Bruchmeisterallee           BAUM Unternehmensgruppe          12,000 m² GFA office             2021
  19     Business Park              Vahrenwalder Straße 321     bauwo                          20,000 m² BGF office           2021
         Hannover-Nord                                          Grundstücksgesellschaft mbH                                                 39   State criminal police       Waterlooplatz 11            State of Lower Saxony            10,100 m² GFA office Own-        2022
  20     enercity head office       Glockseestraße 33           enercity AG                    20,000 m² GFA office           2021               agency                                                                                   er-occupation
                                                                                               Owner-occupation                            40    Chicago Lane Office         Chicago Lane                chicago lane office suites en-   10,000 m² office                 2021
                                                                                                                                                 Suites                                                  twicklungsgesellschaft mbH

        26   PROPERTY MARKET REPORT 2019                                                                                                                                                                                                          OFFICE PROPERTY MARKET            27
Großburgwedel
                                                                                                                                                                                                                                                                   A 352
                                                                                                                                                                     Selected office projects
                                                                   Investor,                                                                B6
                                                                                                                                        Status                                                                                                                                                                                                                                                                                   New builds
   No.    Property                     Address                                                   B 442 Area in m² MF-G
                                                                   developer or user                                                    completion                                                                                                                                                                                                                                                                               1
                                                                                                                                                                                                                                                                                                                                                                                                                                         Deutsche Bahn AG                                39
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Forensic Institute

Steinhuder Meer
    41    Expo Campus                  Boulevard der EU/Boule-
                                       vard de Montréal
                                                                   Wohnkompanie Nord GmbH,
                                                                   i Live Group GmbH
                                                                                                       6,000 m² office                  Q3/2023

                                                                                                                                                                                                                                       35
                                                                                                                                                                                                                                                                                                                                                                                                                                 2

                                                                                                                                                                                                                                                                                                                                                                                                                                 3
                                                                                                                                                                                                                                                                                                                                                                                                                                         Administration building Public Order            40

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         41
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Chicago Lane Office Suites

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             B
                                                                                                                                                                                                                                                                                                                                                                                                                                         WABCO Engineering Innovation Center                    Expo Campus
    42    Office project Hanomag       Marianne-Baecker-Allee/     DIBAG Industriebau AG               5,400 m² office
                                                                                                                                                                                                                                                                                                                                                                                                                                 4                                                       42
          plot                         Hanomagstraße                                                                                                                                                                                                                                                                                                                                                                                     City Gate Nord (Vodafone)                              Office project Hanomag grounds

                                                                                                                                                                                                           Langenhagen
                                                                                                                                                                                                                                                                                                                                                                                                                                 5                                                       43
    43    Admin building Region        Akazienstraße               Region Hannover                     5,000 m² office owner-           2022                                                                                                                                                                                                                                                                                             Pod|BC                                                 Administration offices Hannover Region
                                                                                                                                                                                                                                                          8
                                                                                                                                                                                                                                                 27
          Hannover                                                                                     occupier                                                                                                                                                                                                                                                                                                                  6
                                                                                                                                                                                                                                                                                                                                                                                                                                         Office building am Park der Sinne               44
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Office project "Anna"
                                                                                                                                                                                                                                                                                             Langenhagen centre
    44    Office project "Anna"        Anna-Zammert-Straße         Aurelis Real Estate Service         4,500 m² GFA office              2021                                                                                                                   B 522                                                                                                                                                             7
                                                                                                                                                                                                                                                                                                                                                                                                                                         Telekom AG                                      45
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Swiss Life Career Campus

                                                            Wunstorf
                                                                   GmbH                                                                                                                                                                                                                                                                                                                                                                                    A 37
                                                                                                                                                                                  Garbsen
                                                                                                                                                                                                                                                                                                                                                                                                                                 8                                                       46
                                                                                                                                                                                                                                                                                                                                                                                                                                         DHL Freight                                            Office project Freundallee
    45    Swiss Life Career Campus     Swiss-Life-Platz            Swiss Life AG                       3,800 m² office/seminar          2021/2022                       Garbsen                                                                                                                                                                                                                                                  9
                                                                                                                                                                                                                                                                                                                                                                                                                                         MARQ Marstall Quarree                           47
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Expo Gate    B 443
                                      B 441                                                            Owner-occupier                                                   centre
                                                                                                                                                                                  13                                                                                                                                                                                                                                             10                                                      48
                                                                                                       650 m² conference                                                                                                                                                                                                                                                                                                                 DB Netz AG (extension)                                 Office project WA 27

                                                                                                                                                                                                                                                                                                                                                                                                                                 11                                                      49
    46    Office project               Freundallee                 ARTIS Hannover II GmbH              3,500 m² office                  2021                                                                                                                                                                                                                                                                                             Office project Planetencenter                          Office project VS319
                                                                                                                                                                                                           A2
                                                                                                                                                                    E 30                                                                                                                                                                                               Lahe                                                      12                                                      50
                                                                                                                                                                                                                                                                                                                                                                                                                                         Schindler                                              Office project Laatzen
   Medium-term planning                                                                                                                                                     11
                                                                                                                                                                                                                                                                                     19
                                                                                                                                                                                                                                                                                                           Vahrenwalder Straße
                                                                                                                           B 441                     Lein                                                                                                                                                                                                                                                                        13
                                                                                                                                                                                                                                                                                                                                                                                                                                         B6 Office                                       51
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Office project KWA62
    47    Expo Gate                    Kronsbergstraße /           Vastint                             43,000 m² GFA office/hotel                         e                                      17
                                                                                                                                                                                                      22
                                                                                                                                                                                                                                                                                     49
                                                                                                                                                                                                                                                                                                                                                                              29

                                                                                                                                                                                                                                                                                              4                                                                                    45                                            14                                                      52
                                       Münchner Straße, Laatzen                                                                                                                                                                                                                                                                                                                                                                          Landesgesundheitsamt (extension)                       Office project Main goods station

                                                                                                                                                                                                                                                                                                                     M ittellandkanal
                                                                                                                                                                                                                                                                                                      23                                                              5 31
                                                                                                                                                                                                                                                                                                                                                                                                                                 15
    48    Office project WA 27         Weltausstellungsallee       Delta HRG                           22,000 m² office/hotel           2023/2024                                                                                                                                                                                                                                                                                        LIVIN
                                                                                                                                                                                                                                                                                                                                                                       Podbielskistraße
                                                                                                                                                                                                                                                                                                                                                                                                                                 16
                                                                                                                                                                                                                                                                                                                                                                                                                                         Continental AG head office                      Refurbishments
                                                                                                                                                                                                                B6
    49    Office project VS319         Vahrenwalder Straße 319    B 442
                                                                    Delta HRG                          15,000 m² office/hotel           2023/2024                                                                                                                                                                                                                     B3                                                         17
                                                                                                                                                                                                                                                                                                                                                                                                                                         Taurus Technopark                               53
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Rathaus Kontor
                                                                                                                                                                                                                                                                                                                                                           30

    50    Office project Laatzen       Erich-Panitz-Straße/        phoenix Holding GmbH                10,000 m² GFA office                                                                                                                                                                                                                                                                                                      18
                                                                                                                                                                                                                                                                                                                                                                                                                                         Office and commercial building Vahrenwald       54
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                KRH Training Academy

                       al
                                                                                                                                                                                                                                                                                         18

              d  ka  n
                                                                                                                                                                                                                                                                                                                                                                                              32

             n
                                                                                                                                                                                                                                                                                                                                                            51

            a
                          Karlsruher Straße, Laatzen
    51
         l l
      e project KWA62 Karl-Wiechert-Allee 62
  MittOffice                                                       Delta HRG                           9,000 m² office/hotel            2024/2025
                                                                                                                                                                                         B 441                                                                                       34
                                                                                                                                                                                                                                                                                                      56

                                                                                                                                                                                                                                                                                                                        HANNOVER
                                                                                                                                                                                                                                                                                                                                                                                                                                 19

                                                                                                                                                                                                                                                                                                                                                                                                                                 20
                                                                                                                                                                                                                                                                                                                                                                                                                                         Business Park Hannover-Nord                     55
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Ludwig-Fresenius Schools

                                                                                                                                                                                                                                                                                                                                                                                                                                         enercity head office                            56
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                List Lofts
                                                                                                                                                                                                                                                                                     52
                                                                                                                                                                                                                                                                                                  1                                                                   Karl-Wiechert-Allee
    52    Office project Former        Paulstraße/Gertrud-         Aurelis Real Estate                 7,500 m² GFA office              2023/2024                                                                                                                                    60
                                                                                                                                                                                                                                                                                                                                                                                                                                 21
                                                                                                                                                                                                                                                                                                                                                                                                                                         KraussMaffei Berstorff                          57
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Office building Siemensstraße
          main goods station           Knebusch-Straße             Service GmbH
                                                                                                                                                                                                                                            20
                                                                                                                                                                                                                                                              City                                         58
                                                                                                                                                                                                                                                                                     9                           24                                                                                                              22
                                                                                                                                                                                                                                                                           15                                                          16                                                                                                Faurecia                                        58
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Joachims Carrée
   Refurbishments                                                                                                                                                                                                                  3                                                                  59
                                                                                                                                                                                                                                                                                                                                                                                                                                 23
                                                                                                                                                                                                                                                                                          53                                                                                                                                             City Gate Nord (2nd CP)                         59
                                                                                                                                                                                                                                                                                                                                  Hans-Böckler-Allee                                                                                                                                            Office and commercial building Osterstraße
   Completions                                                                                                                                                                                                                                                                           2
                                                                                                                                                                                                                             City centre periphery                              39
                                                                                                                                                                                                                                                                                         38
                                                                                                                                                                                                                                                                                                       43                    44        46                                                                                        24
                                                                                                                                                                                                                                                                                                                                                                                                                                         Ärztekammer Niedersachsen                       60
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              	Quartier Goseriede (former Postbank site)
    53    Rathaus Kontor               Theodor-Lessing-Platz       BAUM Unternehmensgruppe             4,200 m² office                  Q4/2018                                                                                                                       14                                                          10                                                                                             25
                                                                                                                                                                                                                                                                                                                                                                                                                                         Siemens AG
                                       1-2/Ebhardtstraße 1
                                                                                                                                                                                                                                                              42
                                                                                                                                                                                                                                                                                                                57                                                                                                               26
          KRH Bildungsakademie         Schützenallee 5             meravis Bauträger GmbH              3,700 m² office/seminar          Q1/2018                                                                                                                                                                                                                                                                                          Office project MS4
    54
                                                                                                                                                                                                                                                      7                                                                                                                                                                                              B 65
                                                                                                                                                                                                                                                                                                                                                                                                                                 27
                                                                                                                                                                                                                                                                                                                                                                                                                                         MTU                                                    Completions
    55    Ludwig-Fresenius-Schu-       Schützenallee 1             E&H Grundbesitz GmbH                3,500 m² office/seminar          Q1/2019                                                                                                                                                                             Hildesheimer Straße                       28
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    B 443
          len
                           Bad
                                                                                                                                                                                                                                                                                                                                                                                                                                 28
                                                                                                                                                                                                                                                                                                                                                                                                                                         Office and retail building Seelhorster Garten          Under construction/in preparation
                                                                                                                                                                                                                                                  B 65
    56    List Lofts                   Drostestraße 14/16          BAUM Unternehmensgruppe             3,100 m² office                  Q2/2019                                                                                                                                                                                                                                                                                  29
                                                                                                                                                                                                                                                                                                                                                                                                                                         Businesspark Hannover-Lahe                             Concrete Planning

                       Nenndorf
                                                                                                                                                                                                                                                                                                                       55
          Office building              Siemensstraße 10            Schramm & Schön                     2,500 m² office                  Q3/2018                                                                                                                                                                                                                  B6                                                              30
    57
                                                                                                                                                                                                                                                                                                                                                                                  Expo-Park                                              aha head office                                        Mid-term planning
                                                                                                                                                                                                                                                                                                                       54
                                                                                                                                                                                                                                                                                                                                                                                                                                 31
   Under construction/in preparation                                                                                                                                                                                                                                                                                                                                                                                                     Buchholzer Grün

    58    Joachims Carrée              Joachimstraße 8             Joachims Carrée GmbH                2,000 m²
                                                                                                    B 65
                                                                                                                                        2021                                                                                                                                                                                                                                                                                     32
                                                                                                                                                                                                                                                                                                                                                                                                                                      	Office and residential building
                                                                                                                                                                                                                                                                                                                                                                                                                                        Steinbruchsfeld
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         Key                   Sehnde
    59    Office/commercial            Osterstraße 44-46/          BAUM Unternehmensgruppe             12,000 m² GFA office/ retail     2020                                                                                                                                                                                                                                                                                     33                                                             Airport
          building                     Breitestraße 10                                                 (basement/loft)
                                                                                                                                                                                                                     B 217                                                      36
                                                                                                                                                                                                                                                                                                                                                      47                            41
                                                                                                                                                                                                                                                                                                                                                                                                                                         Assure Consulting Co-Working
                                                                                                                                                                                                                                                                                                                                       Laatzen                               26
                                                                                                                                                                                                                                                                                                                                                                                                                                 34                                                             Exhibition grounds
                                                                                                                                                                                                                                                                                                                                                                                                                                         Bumke
   Medium-term planning                                                                                                                                                                                                                                                                                                                 Centre                                     40
                                                                                                                                                                                                                                                                                                                                                                             48
                                                                                                                                                                                                                                                                                                                                                                                         33                                      35            B 443
                                                                                                                                                                                                                                                                                                                                                                                                                                         Sky City Hannover Airport
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                Main station/main line trains
    60    Goseriede quarter (former    Goseriede, Brüderstraße     BAUM Unternehmensgruppe,            45,000 m² office (currently)                                                                                                                                                  B3
                                                                                                                                                                                                                                                                                                                                                 50
                                                                                                                                                                                                                                                                                                                                                                 25   6            12

          Postbank site)                                           meravis Bauträger GmbH              19,000 m² plot including resi-                                                                                                                                                                                                                                                                                            36                                                                 Tram
                                                                                                                                                                                                                                                                                                                                                                                                                                         Büroensemble Hemmingen
                                                                                                                                                                                                                                                                                                                                                 Lein
                                                                                                                                                                                                                                                                                                                                                                             Laatzen
                                                                                                                                                                                                                                                                                                                                                                      37
                                                                                                       dential/hotel in the planning                                                                                                                                                                                                                  e                                                          21
                                                                                                                                                                                                                                                                                                                                                                                                                                 37
                                                                                                                                                                                                                                                                                                                                                                                                                                         Office project Laatzen-Mitte
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    Suburban rail

                                                                                                                                                                                                                                                                                                                                                                                                                                 38                                                                 City boundary
                                                                                                                                                                                                                                                                                                                                                                                                                                         Ratsquartier
                                                                                                                                                                                                                                                                                                                                                                                                   0   0,5   1    1,5 km
                                                                                                                                                                                                                                                                                                                                                                                                                           N

         28     PROPERTY MARKET REPORT 2019                                                                                                                   29   PROPERTY MARKET REPORT 2019                                                                         OFFICE PROPERTY MARKET                                      29                                                                                                                                                    OFFICE PROPERTY MARKET                     30
Subzones of Hannover’s office property market (see also map of office projects on page 29):

 The Hannover office market with approx. 5.04 million m² of office space (MF-G) comprises Hannover city and
 the surrounding towns of Garbsen, Langenhagen and Laatzen, which border directly on the state capital to the
 north and south respectively and are functionally closely linked to it.

Map        Subzones location                                                                    Office        Number           Of which
                                                                                                space in      of office        > 10,000 m²
                                                                                                m² MF-G       buildings

                                                                                                                                                                                                                                                                                                                 RETAIL
           City centre: Bordered by the city ring road. This area comprises Georgstraße,             1.18 m          220              20
           Georgsplatz, Raschplatz, Friedrichswall, Aegidientorplatz and Schiffgraben.

           City centre peripheral locations and arterial roads: High-quality office                  1.88 m          323                  37
           locations are situated in the north and southeast of the city centre with the main
           traffic axes comprising Vahrenwalder Straße in the north, Podbielskistraße in the

                                                                                                                                                                                                                                                                                                                 PROPERTY
           northeast, Marienstraße/Hans-Böckler-Allee in the east and Hildesheimer Straße
           in the south and extends west towards the HANOMAG area

                 City periphery                                                                   584,000             145                 4

                 Podbielskistraße                                                                 546,000              50                 17

                 Vahrenwalder Straße                                                               343,000             59                  7

                                                                                                                                                                                                                                                                                                                 MARKET
                 Hildesheimer Straße                                                               238,000                42              4

                 Hans-Böckler-Allee                                                                165,000                27              5

           Office centre Karl-Wiechert-Allee: With direct access to the expressway this            322,000             36                 9
           location hosts the large sites and facilities of the Hannover Medical School and
           the adjacent Medical Park, and in particular owner-occupied office complexes
           for groups involved in the finance, insurance and tourism sectors.

           EXPO Park: High-quality office buildings oriented towards IT, design and media,         148,000                14              6
           partially comprising some of the original buildings and open spaces constructed
           for the EXPO 2000 World Exposition. The buildings constructed on the nearby
           Kronsberg (Kattenbrookstrift) are exceptional examples of modern architecture.

           Office centre Lahe: Location in the north-east of Hannover boasting excellent            95,000             20                 2
           transport connections to the A 2 and to the tram system. A number of rezoning
           and restructuring activities offer considerable scope for further developing the
           potential at this location.

           City of Langenhagen: Office buildings concentrated in the town centre                   217,000             44                 0
                                                                                                                                               In November 2018, the Westphalian trading company Manufactum opened its eleventh store, occupying 600 m² and three floors. The company                               Hannover and its environs offer many
           and around the LRT station Langenhagen-Mitte. Also, excellent transport                                                             primarily offers high-quality products, manufactured in small batches and often by hand. The branch offers an add-on gastronomy area.
           connections to the motorways and the airport. Additional office properties
                                                                                                                                                                                                                                                                                                                    attractive retail opportunities. The
           in Godshorn and Airport business parks.                                                                                                                                                                                                                                                                  Georgstraße in Hannover is one of
           Stadt Garbsen: Office buildings concentrated around the centre of the city               121,000            36                 0                                                                                                                                                                         Germany’s busiest shopping streets.
           and the new Mechanical Engineering Campus of Leibniz University. Excellent
                                                                                                                                                                                                                                                                                                                    The Hannover Region itself also offers
                                                                                                                                                                                     2.1 m m²                                                         €185/m²                           3.6 %
           transport connections including light rail transit, and direct proximity to the A
           2 and B 6 roads.                                                                                                                                                                                                                                                                                         many attractive shopping opportunities,
           City of Laatzen: Office buildings concentrated around the centre of Laatzen.            128,000                22               1                                                                                                                                                                        drawing shoppers from beyond the
           Directly adjacent to the Hannover Exhibition Grounds and the A 37/A 7 motor-                                                                                                         Retail sales area                                                    Prime rent 2018    Net initial yield 2018
           ways, excellent local public transport connections.
                                                                                                                                                                                                                                                                                                                    region’s borders.

                                                                                                 OFFICE PROPERTY MARKET              31         32    PROPERTY MARKET REPORT 2019                                                                                                                                                                         33
Purchasing power and turnover 2014-2019

                                                                                                                                                                        9,000
                               RETAIL FACT CHECK
                                                                                                                                                                        8,000                                                                                                                               Turnover Hannover
                                                                                                                                                                                                                                                                                                            Turnover Region
                                	Hannover’s Georgstraße has been ranked amongst                    	The towns of Laatzen, Langenhagen, Isernhagen-                    7,000
                                                                                                                                                                                                                                                                                                            Purchasing power relevant to retail, Hannover
                                  Germany’s ten best shopping streets for many years                 Altwarmbüchen and Garbsen all offer strong shopping                6,000
                                                                                                                                                                                                                                                                                                            Purchasing power relevant to retail, Region
                                  now and is one of the nation’s top locations in terms              centres and retail centres and are successful
                                                                                                                                                                        5,000
                                  of pedestrian frequency and prime rent.                            on a supra-regional level.                                                                                                                                                                          Source: MB-Research 2019

                                                                                                                                                               In € m
                                                                                                                                                                        4,000

                                	The centrality of Hannover city and the region is high,           	In 2018, retail properties were sold for around                   3,000

                                  with a catchment area stretching far beyond Lower                  €39 million.                                                       2,000
                                  Saxony’s border in the west through to the state of
                                                                                                                                                                        1,000
                                  North-Rhine Westphalia.
                                                                                                                                                                        0

                                	The sales floor total area in the Hannover Region is

                                                                                                                                                                                  2014

                                                                                                                                                                                                     2015

                                                                                                                                                                                                                        2016

                                                                                                                                                                                                                                           2017

                                                                                                                                                                                                                                                              2018

                                                                                                                                                                                                                                                                                 2019
                                  approximately 2.1 million m², of which some
                                  285,000 m² are located in Hannover’s city centre.

                             The region is one of the country’s
                             top retail locations for turnover                                     Outstanding centrality                                                          Region offers over 2.1 million m² sales floor area
                             Despite the increasing market share now enjoyed by                    Hannover is a retail location which is very much in                             The total sales floor area for the Hannover Region as a whole
                             e-commerce in retail sales in Germany, local retail                   demand. Compared with cities of a similar size, such as                         is estimated at 2.1 million m². The sales floor area available
                             turnover has remained stable or even risen slightly.                  Bremen, Dortmund, Nuremberg, Essen and Leipzig, the                             in Hannover is approximately 885,000 m². Overall, the city
                             According to MB-Research, retail sales in the Hannover                rents achieved in Hannover’s inner-city shopping streets                        centre (district Mitte) offers approx. 285,000 m² sales floor
                             Region topped €7.9 billion during 2019. The Hannover                  are much higher. Hannover boasts excellent centrality and                       area.3 The top four prime sites (Bahnhofstraße, Georg-
                             Region continues to rank amongst those German                         actually beats metropolises such as Berlin, Hamburg and                         straße, Große Packhofstraße and Karmarschstraße) have a
                             towns and cities with the highest turnover levels.                    Munich in this regard.                                                          combined sales floor area of approx. 190,000 m².

                                                                                                                                                                                   3
                                                                                                                                                                                         Data for Hannover Region, acquired as part of the develop-
                                                                                                                                                                                         ment of the Regional Retail Concept. Data as at 2016

                Retail indexes 2014 to 2019
                                                                                                                                                                                   Pedestrian frequency prime location Hannover to 2019
                130

                125                                                                                                 Turnover index, Hannover                                                                                   Ø Hourly frequency                                           Range            Ø Hourly frequency                                         Range
                                                                                                                    Turnover index, Region                                               Road
                                                                                                                                                                                                                                                  Tuesday                        for Germany                                  Saturday                             for Germany
                120
                                                                                                                    Centrality index, Hannover
                115                                                                                                 Centrality index, Region                                             Georgstraße                                                   4,877                                         2                               7,650                                   3
Germany = 100

                                                                                                                    Purchasing power index, Hannover                                     Karmarschstraße                                                2,341                                      16                                4,168                                  18
                110
                                                                                                                    Purchasing power index, Region
                                                                                                                                                                                         Große Packhofstraße                                           2,286                                        17                               4,498                                  16
                105
                                                                                                            Source: MB-Research, 2019
                100

                                                                                                                                                                                   Source: Engel & Völkers Hannover Commercial, hystreet.com GmbH. Average hourly value during the observation period from 10-20 hours on all Tuesdays or Saturdays in May 2019.
                95                                                                                                                                                                 Bahnhofstraße was not counted for technical reasons. The rank nationwide reflects the placement among a total of 55 shopping streets examined

                90
                      2014

                                   2015

                                                 2016

                                                              2017

                                                                            2018

                                                                                            2019

34              PROPERTY MARKET REPORT 2019                                                                                                                                                                                                                                                                                         RETAIL PROPERTY MARKET                       35
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