PROPERTY MARKET REPORT 2020 - BUSINESS PROMOTION

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PROPERTY MARKET REPORT 2020 - BUSINESS PROMOTION
PROPERTY MARKET REPORT 2020

BUSINESS PROMOTION
PROPERTY MARKET REPORT 2020 - BUSINESS PROMOTION
CONTENTS                                                                                   THE PROPERTY MARKET IN THE HANNOVER REGION

    Foreword                                                                    3
                                                                                                            Dear Reader,
    Investment market                                                           4

    Office property market                                                      8                           At the year's midpoint, the property market was dominated by the corona pandemic, which has been having varying
                                                                                                            levels of impact on the property submarkets. After enjoying a very good start to 2020, Hannover’s retail, hotel and
    Logistics property market                                                   14                          gastronomy submarkets are now considered to be the most severely affected. In the residential, office and logistics
                                                                                                            submarkets, medium to long-term effects of the economic crisis caused by the pandemic remain unclear.
    Residential property market                                                 18
                                                                                                           Traditionally, property markets experience a delayed response to crisis situations. For investors, Germany has always
    Retail property market                                                     22                           been considered a safe haven in uncertain times, and Hannover in particular has in the past been generally less vola-
                                                                                                            tile than other regions in Germany.
    Hotel property market                                                      26
                                                                                                           The decline in all submarkets in Hannover this year has however been particularly high due to the exceptionally good
    Imprint                                                                    30                           previous year. In 2019 several records were broken, with floor-space turnover of almost 200,000 m2 for offices and
                                                                                                            380,000 m2 for logistics, and peak office rents of 18 €/m2. Hannover was also very well positioned last year in the
    Images                                                                      31                          hotel and retail sectors. The total transaction volume in the Hannover Region for the four commercial submarkets
                                                                                                            in 2019 exceeded €1 billion for the first time. The residential property market has been characterised for years by a
                                                                                                            near-insatiable demand.

                                                                                                            How Hannover's property sector will overcome the corona crisis is not yet fully clear from the perspective of the
                                                                                                            majority of market players. At present, market data that is usually used for valuation purposes seems to be of limited
                                                                                                            meaning or should be interpreted only cautiously.

                                                                                                            It is therefore particularly important that assessing and categorising current developments in the Hannover property
                                                                       HANNOVER AS A                        market is made on sound data and opinions from regional players. For this reason, this shortened issue of the market
                                                                       PROPERTY LOCATION                    report presents the most important market data and trends, and is being published already at the beginning of

                                                                       HAS THE POTENTIAL                    August.

                                                                       TO OVERCOME THIS                     Hannover as a property location has the potential to overcome this crisis in a sustainable way. Property businesses
                                                                       UNPRECEDENTED CRISIS                 who have been working together for 17 years with the city and region as well as with the support of bulwiengesa AG

                                                                       IN A SUSTAINABLE WAY.                to produce the property market report, are convinced of this. This property market report once again demonstrates
                                                                                                            the commitment and trust in working together within Hannover’s property sector, especially in difficult times.

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

    Cover page: me and all hotel hannover, Aegidientorplatz Hannover

2   PROPERTY MARKET REPORT 2020                                                                                                                                                                                               FOREWORD   3
PROPERTY MARKET REPORT 2020 - BUSINESS PROMOTION
INVEST-
    MENT–
    MARKET
                                                       View from the Intercity Hotel, Raschplatz Hannover

                                  AN INVESTMENT         	The Hannover Region is an innovative industrial location,     expanded Hannover's position as the most important

                                  VOLUME OF AROUND       a service metropolis and a logistics hub for national and      location after Germany’s seven major A-locations. At the
                                                         international markets. The regional economy has developed      same time, Hannover has been offering ever more appealing
                                  €1 BILLION MADE        positively in recent years leading to a sustained demand for   investment opportunities and attracting investors wanting
                                  2019 AN ABSOLUTE       property in all submarkets. This has consolidated and          to invest in locations that retain value.

                                  RECORD YEAR IN THE
                                  HANNOVER REGION.

4   PROPERTY MARKET REPORT 2020                                                                                                                              INVESTMENT MARKET      5
PROPERTY MARKET REPORT 2020 - BUSINESS PROMOTION
MARKET MOODS
    AND TRENDS

    An investment volume of around €1 billion made                                                      Transaction volume for commercial property market                                                                                                               Transaction volume for commercial property market                                                                                                 When the markets pick up after the crisis,
    2019 an absolute record year in the Hannover                                                        Distribution according to size classes 2015 to 2019                                                                                                             Distribution according to submarkets 2015 to 2019                                                                                                 Hannover as a property location must by then at
    Region. The first quarter of 2020 also got off to                                                                                                                                                                                                                                                                                                                                                                     the latest be in a position to again quickly satisfy
                                                                                                        1,200                                                                                                                                                           100                                                                                           1,000
    a very promising start. Shortly before the start of                                                                                                                                                                                                                                                                                                                                                                   demand for core properties with the aforemen-
    the corona lockdown, it was expected that 2020                                                                                                                                                                                                                                                                                                                                                                        tioned characteristics.
                                                                                                                                                                                                                                                                        90                                                                                             900
    could even reach similar levels to previous record                                                  1,000
    years.                                                                                                                                                                                                                                                              80                                                                                             800                                                Investment pressure from national and interna-
                                                                                                                                                                                                                                                                                                                                                                                                                          tional investors remains very high due to a lack

                                                             Share of transaction volume in million €
                                                                                                                                                                                                                                                                        70                                                                                             700

                                                                                                                                                                                                                                     Share of transaction volume in %
    Towards the middle of the year, there was                                                           800                                                                                                                                                                                                                                                                                                               of alternatives, thus securing opportunities for

                                                                                                                                                                                                                                                                                                                                                                                Transaction volume in million €
    however a collapse in activity and hence in the                                                                                                                                                                                                                     60                                                                                             600                                                investment in the Hannover Region. The situation
    Hannover Region’s property investment market.                                                                                                                                                                                                                                                                                                                                                                         is likely to calm down again at the beginning of
                                                                                                        600                                                                                                                                                             50                                                                                             500
    Hardly any significant new contracts were                                                                                                                                                                                                                                                                                                                                                                             the third quarter, but will remain tense for the
    concluded in the second quarter. Some transac-                                                                                                                                                                                                                      40                                                                                             400
                                                                                                                                                                                                                                                                                                                                                                                                                          time being, particularly in submarkets such as
    tions that were initially suspended or postponed                                                    400
                                                                                                                                                                                                                                                                                                                                                                                                                          retail or hotels, in view of the ongoing incidences
    due to the pandemic give hope for a catch-up                                                                                                                                                                                                                        30                                                                                             300                                                of infection.
    effect in the second half of the year, but a repeat
                                                                                                                                                                                                                                                                        20                                                                                             200
    of the previous year’s strong result is currently not                                               200

    anticipated.                                                                                                                                                                                                                                                        10                                                                                              100

                                                                                                        0                                                                                                                                                               0                                                                                                   0
    Any concerns about a rise in opportunist investors

                                                                                                                                                               2018

                                                                                                                                                                                                                                                                                                                                                 2018
                                                                                                                                  2016

                                                                                                                                                                                                                                                                                                          2016
                                                                                                                                                                          2019

                                                                                                                                                                                                                                                                                                                                                             2019
                                                                                                                    2015

                                                                                                                                                                                                                                                                                           2015
                                                                                                                                                2017

                                                                                                                                                                                                                                                                                                                               2017
    with speculative intentions in the regional market
    are not shared by the majority of Hannover’s
    players. Instead, they see opportunities and                                                            Above € 100 m                 € 50–100 m                  € 20–50 m                                                                                               Office              Retail  	                                                 Volume in € m
    expect new developments in all submarkets to                                                            € 10–20 m                     € 5–10 m                    Up to € 5 m                                                                                             Logistics and industry                     Hotel               Other
    focus even more strongly in future on sustain-                                                      Source: bulwiengesa AG, data for the Hannover Region                                                                                                            Source: bulwiengesa AG, data for the Hannover Region

    able utilisation and sustainable sectors rather
    than on short-term high returns. Both users and                                                                                                                                                                                                                     Net initial yield in prime locations 2015 to 2020
    project developers and investors will have to give
    even greater attention to the sustainability of                                                                                                                                                                                                                     6.5

    buildings. Flexibility, digitalisation and the ability
                                                                                                                                                                                                                                                                        6.0
    to deal with crisis situations (e.g. from pandemics
    and climate change) will be the key issues of the                                                                                                                                                                                                                   5.5

                                                                                                                                                                                                                                     Net initial yield in %
    future.
                                                                                                                                                                                                                                                                        5.0

    Only when locations such as Hannover strengthen                                                                                                                                                                                                                     4.5

    their capabilities in this area will they be able to                                                                                                                                                                                                                4.0
    compete with national property markets. Over
    the years, construction and development in                                                                                                                                                                                                                          3.5                                                                                                                                               AN INCREASE IN
    Hannover has taken place according to needs and                                                                                                                                                                                                                     3.0                                                                                                                                               OPPORTUNIST
    with little speculation. Needs-driven projects in
                                                                                                                                                                                                                                                                                                                                                                                                                          INVESTMENT IS

                                                                                                                                                                                                                                                                                                                                                             2020
                                                                                                                                                                                                                                                                                                                                      2018
                                                                                                                                                                                                                                                                                    2015

                                                                                                                                                                                                                                                                                                   2016

                                                                                                                                                                                                                                                                                                                                                     2019
                                                                                                                                                                                                                                                                                                                  2017
                                                                                                                                                                                    Main rail freight station, Weidendamm Hannover

    all submarkets are currently tending to coun-
    teract vacancies and the threat of falling prices.                                                                                                                                                                                                                                                                                                                                                                    NOT EXPECTED FOR
    From the perspective of the regional property                                                                                                                                                                                                                                 Logistics                      Office                                                                                                   THE TIME BEING.
    sector, this could prove to be a competitive                                                                                                                                                                                                                                  Hotel                          Retail
    advantage in this crisis.                                                                                                                                                                                                                                           Source: bulwiengesa AG
                                                                                                                                                                                                                                                                        For yield spreads, the lower end points are always given.

                                                                                                                                                                                                                                                                              Data situation uncertain due to corona effects
                                                                                                                                                                                                                                                                              Forecast first quarter 2020

6   PROPERTY MARKET REPORT 2019
                           2020                                                                                                                                                                                                                                                                                                                                                                                   HANNOVER REGION INVESTMENT MARKET                    7
PROPERTY MARKET REPORT 2020 - BUSINESS PROMOTION
Visualisation, Continental AG, Hans-Böckler-Allee Hannover

                                                                Office                                                                                  In 2019, office space turnover was almost

                                                                Office rental space 2020 in m2 MF-G                                         5.06 m
                                                                                                                                                        200,000 m2, an absolute record for Hannover and
                                                                                                                                                        the three surrounding towns of Garbsen, Laatzen
                                                                  Hannover city                                                              4.57 m
                                                                                                                                                        and Langenhagen. There is no shortage of attrac-
                                                                  Surrounding towns of Garbsen, Laatzen and Langenhagen                      0.49 m
                                                                                                                                                        tive projects. In the past five years (2014 to 2019),
                                                                Office space turnover 2019 in m2 MF-G                                      198,000
                                                                                                                                                        around 240,000 m2 of new office space has
                                                                  Hannover city                                                            158,000
                                                                                                                                                        been built and a further 115,000 m2 has under-
                                                                  Surrounding towns of Garbsen, Laatzen and Langenhagen                     40,000
                                                                                                                                                        gone complete renovation. By 2023, a further
                                                                Vacancy rate 2020 in m2 MF-G                                               180,000
                                                                                                                                                        400,000 m2 is to be added (of which 80,000 m2
                                                                  Hannover city                                                            145,000
                                                                                                                                                        will be redevelopments).
                                                                  Surrounding towns of Garbsen, Laatzen and Langenhagen                     35,000

                                                                Vacancy rate 2020                                                            3.6 %

                                                                  Hannover city                                                               3.2 %

                                                                  Surrounding towns of Garbsen, Laatzen and Langenhagen                       7.7 %

                                                                Peak rent 2020 in m2 MF-G

                                                                  City                                                                        17.00

                                                                  City periphery                                                              15.30

                                                                Average rent 2020 in m2 MF-G

                                                                  City                                                                        13.00

                                                                  City periphery                                                               11.50

                                                                Net initial yield in prime city locations 2020                               3.8 %

                                                               Source: bulwiengesa AG; Hannover Region surveys; information from market participants;
                                                               data as at mid-2020

                                                                                                                                                        MARKET MOOD:
                                                                                                                                                        STABLE DEVELOPMENT
                                                                                                                                                        DESPITE CORONA

                                                             OFFICE
                                                             PROPERTY
                                                             MARKET
        8      PROPERTY MARKET REPORT 2020
                                      2019                                                                                                                   OFFICE PROPERTY MARKET                 9
PROPERTY MARKET REPORT 2020 - BUSINESS PROMOTION
design offices, Philipsbornstrasse Hannover

                                     Office space turnover 2015 to 2019                                                                                            THE OFFICE                                                                                                 Office rents 2015 to 2020

                                     200                                                                                                                           PROPERTY MARKET                                                                                            20

                                                                                                                                                                   IS IN THE MAIN                                                                                             18
                                     180
                                                                                                                                                                   UNFAZED AND STABLE.                                                                                        16
                                     160
                                                                                                                                                                                                                                                                              14

                                                                                                                                                                                                                                                    in €/m2 MF-G
                                     140
                                                                                                                                                                                                                                                                              12
Space turnover in thousand m2 MF-G

                                     120                                                                                                                                                                                                                                      10

                                                                                                                                                                                                                                                                              8
                                     100

                                                                                                                                                                                                                                                                              6
                                     80

                                                                                                                                                                                                                                                                                                                                                                               2020
                                                                                                                                                                                                                                                                                          2015

                                                                                                                                                                                                                                                                                                                                             2018
                                                                                                                                                                                                                                                                                                            2016

                                                                                                                                                                                                                                                                                                                                                              2019
                                                                                                                                                                                                                                                                                                                             2017
                                     60
                                                                                                                                             Office space vacancy 2015 to 2020
                                                                                                                                                                                                                                                                                        Peak rent, city                                    Average rent, city
                                     40                                                                                                      400                                                                          8
                                                                                                                                                                                                                                                                                        Peak rent, city periphery                          Average rent, city periphery
                                                                                                                                             350                                                                          7
                                     20                                                                                                                                                                                                                                       Source: bulwiengesa AG; Hannover Region surveys; information from market participants

                                                                                                                                                                                                                                                                                    Data situation uncertain due to corona effects, forecast to mid-year 2020
                                                                                                                                             300                                                                          6
                                     0
                                                                                                                Vacant in thousand m2 MF-G

                                                                                                                                             250                                                                          5
                                                                                           2018
                                                 2015

                                                               2016

                                                                                                         2019
                                                                             2017

                                                                                                                                                                                                                                                                              Completions 2015 to 2023

                                                                                                                                                                                                                                Vacancy rate in %
                                                                                                                                             200                                                                          4
                                                                                                                                                                                                                                                                              200
                                     Rental surrounding area* Owner-occupier surrounding
                                     				area                                                                                                150                                                                          3
                                                                                                                                                                                                                                                                              175
                                           Rental Hannover                    Owner-occupier Hannover
                                                                                                                                             100                                                                          2
                                     * Value for the surrounding area (Garbsen, Laatzen, Langenhagen)
                                                                                                                                                                                                                                                                              150
                                     Source: Hannover Region surveys; information from market participants                                   50                                                                           1

                                                                                                                                                                                                                                                                              125
                                                                                                                                             0                                                                            0

                                                                                                                                                                                                                                                        in thousand m2 MF-G
                                                                                                                                                                                                           2020
                                                                                                                                                            2015

                                                                                                                                                                                         2018
                                                                                                                                                                     2016

                                                                                                                                                                                                    2019

                                                                                                                                                                                                                                                                              100
                                                                                                                                                                               2017

                                                                                                                                                                                                                                                                              75
                                                                                                                                                  Vacancy Hannover                              Vacancy rate Hannover
                                                                                                                                                  Vacancy in surrounding Vacancy rate in surrounding
                                                                                                                                                  area*		area                                                                                                                 50

                                                                                                                                             * The vacancy rate was calculated and updated on the basis of the 2019 office
                                                                                                                                               space survey for the Hannover market area. On the basis of the current survey,                                                 25
                                                                                                                                               the vacancy figures updated since the 2015 survey using estimates were
                                                                                                                                               retroactively adjusted to the 2019 survey results.

                                                                                                                                             Source: bulwiengesa AG; Hannover Region surveys;                                                                                 0
                                                                                                                                             information from market participants

                                                                                                                                                                                                                                                                                                                                            2020

                                                                                                                                                                                                                                                                                                                                                                2022

                                                                                                                                                                                                                                                                                                                                                                        2023
                                                                                                                                                                                                                                                                                                     2016
                                                                                                                                                                                                                                                                                            2015

                                                                                                                                                                                                                                                                                                                          2018

                                                                                                                                                                                                                                                                                                                                    2019

                                                                                                                                                                                                                                                                                                                                                       2021
                                                                                                                                                                                                                                                                                                                   2017
                                                                                                                                                   Data situation uncertain due to corona effects
                                                                                                                                                   Forecast to mid-year 2020

                                                                                                                                                                                                                                                                                    Newbuild–completions Hannover                                  Renovations Hannover
                                                                                                                                                                                                                                                                                    Newbuild–completions surrounding area                          Renovations surrounding area
PROPERTY MARKET REPORT 2020                                                                                                                                                                                                                                                   Source: Based on the bulwiengesa AG spring forecast; Hannover Region surveys; information from
                                                                                                                                                                                                                                                                              market participants; data as at Q2/2020

                                                                                                                                                                                                                                                                                    Data situation uncertain due to corona effects, forecast as at mid-year 2020

10                                   PROPERTY MARKET REPORT 2020                                                                                                                                                                                                                                                                                                                                    OFFICE PROPERTY MARKET   11
PROPERTY MARKET REPORT 2020 - BUSINESS PROMOTION
design offices, Philipsbornstrasse Hannover

     MARKET MOODS AND TRENDS

     The current half-yearly results for the office prop-   It remains to be seen how office space turnover
     erty market reveal no decline for the time being.      will actually develop. It is currently unclear what
     By mid-2020, office space turnover was around          effect the crisis-related intensification of digital
     100,000 m2, and the peak rent had fallen only          working and increased working from home will
     slightly, remaining at a high level compared with      have and whether the trend towards flexible
     recent years.                                          office space rentals and co-working, which has
                                                            also recently been observed in Hannover, will
     An exceptionally strong first quarter underpins        weaken.
     the positive impression of the first half year. With
     the onset of corona restrictions, however, market      The number of office employees in Hannover is
     activity came to a standstill also on the local        however expected to continue to rise in the com-
     office property market. This initial phase of uncer-   ing years, so working from home and digitalisation
     tainty seemed to have been overcome by the             are likely to have only a short-term dampening
     mid-year, strategic projects have not been halted      effect on office rentals and project development
     and negotiations that had been started are gen-        volumes. Whether “pre-corona” growth rates in
     erally being concluded without changes.                turnover and rents will again be achieved in the
                                                            near future is not yet foreseeable.
     However, the fall in the office property market is
     particularly great this year after the 2019 record
     year. Economic slowdown before corona meant
     there were already initial signs of a cooling down
     at the end of 2019/beginning of 2020. The
     increasing rise seen in inner city rents over recent
     years would probably have levelled off in 2020                                                                    design offices, Philipsbornstrasse Hannover
     even without the impact of the corona crisis. The
     current situation is accelerating the trend, and
     rents should stabilise in 2020 at a still high, but
     slightly declining, level.

                                                                          IN 2020, THE FALL HAS
                                                                          BEEN PARTICULARLY
                                                                          GREAT AFTER THE
                                                                          RECORD YEAR OF 2019.

12   PROPERTY MARKET REPORT 2020                                                                                   OFFICE PROPERTY MARKET                13
PROPERTY MARKET REPORT 2020 - BUSINESS PROMOTION
LAPP logistics centre, Industrieweg Hannover

                                                 Logistics

             LOGISTICS–
                                                 Logistics space available in 2020 in m2                                      3.71 m

                                                   of which constructed after 2009                                            1.45 m

                                                 Logistics space turnover in 2019 in m2                                    380,000

                                                 Rents in prime locations 2020

                                                   Peak rent in €/m2                                                            5.20

             PROPERTY
                                                   Average rent in €/m2                                                         4.25

                                                 Net initial yield of logistics centres in prime locations 2020               4.4 %

                                               All figures refer to the Hannover Region.

                                               Source: bulwiengesa AG; Hannover Region surveys; current space is an update based on
                                               existing space surveys from Q4/2019, data as at mid-2020

             MARKET
                                                  Information provided by market participants in mid-2020

                                               The Hannover Region is a European logistics hub and important hinterland
                                               port location for seaports in northern Germany. Commercial and industrial
                                               companies are the main drivers of demand in the regional logistics industry.
                                               In recent years, many contract logistics companies have established them-
                                               selves at the location, carrying out logistics tasks for other companies and
                                               thus creating a high level of added value for themselves. Warehouse space
                                               turnover at the end of 2019 was at a high of 380,000 m2.

                                               Planned and known projects for the next few years (until 2023) currently
                                               add up to a total of around 650,000 m2 of warehouse space and 30,000 m2
                                               of office and mezzanine space for logistical use.

                                               MARKET MOOD:
                                               CAUTIOUSLY OPTIMISTIC.

        14     PROPERTY MARKET REPORT 2020                                                        LOGISTICS PROPERTY MARKET            15
PROPERTY MARKET REPORT 2020 - BUSINESS PROMOTION
MARKET MOODS
                                                                                                                                                                                                                                                                       AND TRENDS

                                  Logistics property turnover in the Hannover Region 2015 to 2019                                                                 Logistics/production completions in the Hannover                                                     Already in the first weeks of the corona crisis,      The crisis has strengthened upstream and
                                                                                                                                                                  Region 2017 to 2023                                                                                  the logistics industry proved itself to be a key      downstream logistics for the growing online
                                  400                                                                                                                             200                                                                                                  sector, indispensable for the supply of essentials.   retail sector. On the other hand, the situation
                                                                                                                                                                                                                                                                       The shutdown of the brick-and-mortar retailers        is currently tense for property and logistics
                                  350                                                                                                                             180
                                                                                                                                                                                                                                                                       led to a short-term sharp increase in demand          infrastructures, which are primarily designed for
                                                                                                                                                                  160
                                  300                                                                                                                                                                                                                                  for storage solutions for goods that could not        industrial logistics. This has hit the automotive

                                                                                                                                 Warehouse space in thousand m2
 Warehouse space in thousand m2

                                                                                                                                                                  140                                                                                                  be delivered. At the same time, online retailers      sector particularly hard. Regional market players
                                  250
                                                                                                                                                                  120                                                                                                  recorded a massive increase in orders. This devel-    can foresee that in the medium to long term an

                                  200
                                                                                                                                                                                                                                                                       opment not only resulted in an increased demand       increased demand for logistics and production
                                                                                                                                                                  100
                                                                                                                                                                                                                                                                       for warehouse space, but also increased the strain    space (for light industries) could arise by produc-
                                                                                                                                                                  80
                                  150                                                                                                                                                                                                                                  on infrastructures in the courier, express and        tion being brought back to Europe. To improve
                                                                                                                                                                  60                                                                                                   parcel services sector.                               supply chain security in retail and industry as
                                  100
                                                                                                                                                                  40                                                                                                                                                         a whole and make them more crisis-proof,
                                  50                                                                                                                                                                                                                                   These impacts and demand drivers were also            increased logistical space requirements are also
                                                                                                                                                                  20
                                                                                                                                                                                                                                                                       clearly felt in the Hannover Region. Available        likely to arise in the Hannover Region. Market
                                  0                                                                                                                               0
                                                                                                                                                                                                                                                                       space is however somewhat limited after the very      participants urge that the foreseeable increase

                                                                                                                                                                                2017

                                                                                                                                                                                          2018

                                                                                                                                                                                                        2019

                                                                                                                                                                                                               2020

                                                                                                                                                                                                                       2021

                                                                                                                                                                                                                              2022

                                                                                                                                                                                                                                     2023
                                                                                                                                                                                                                                                                       good previous year. For logistics and industrial      and sustained high-level of demand needs to be
                                                                                              2018
                                                                  2016

                                                                                                              2019
                                                 2015

                                                                                2017

                                                                                                                                                                                                                                                                       property, turnover of approx. 135,000 m of2
                                                                                                                                                                                                                                                                                                                             met by designating new commercial sites and
                                                                                                                                                                                                                                                                       warehouse space was recorded at the mid-year,         speeding up approval processes.
                                        Rent            Own use                                                                                                   Source: Surveys and own calculations by the Hannover Region
                                                                                                                                                                                                                                                                       and rents have remained largely stable. Ongoing
                                                                                                                                                                         Data situation uncertain due to corona effects,
                                  Source: Surveys and own calculations by the Hannover Region
                                                                                                                                                                         Forecast based on currently known projections                                                 negotiations and strategic projects already           The increasing importance of logistics property
                                                                                                                                                                                                                                                                       planned are generally being concluded or              as an asset class is evident from the investment
                                                                                                                                                                                                                                                                       continued unchanged.                                  market. Investments in logistics properties also
                                                                                                                                                                                                                                                                                                                             took a leading position in the Hannover Region in
                                  Rents for logistics and warehouse space 2015 to 2020                                                                                                                                                                                                                                       the first quarter and first half of 2020.

                                  8

                                  6
  Rent in €/m2

                                  4

                                                                                                                                                                                                                                            Airport Business Park, Langenhagen
                                  2

                                                                                                                                                                                                                                                                                                                                                                                   LOGISTICAL
                                  0                                                                                                                                                                                                                                                                                                                                                INFRASTRUCTURES
                                                                                                                                                                                                                                                                                                                                                                                   HAVE BEEN
                                                                                                                                                                                                 2020
                                                   2015

                                                                                                                     2018
                                                                         2016

                                                                                                                                                                  2019
                                                                                              2017

                                                                                                                                                                                                                                                                                                                                                                                   SUBJECT TO
                                        Peak rent for logistics and warehouse space                  Average rent for logistics and warehouse space
                                                                                                                                                                                                                                                                                                                                                                                   STRESS TESTING
                                  Source: bulwiengesa AG                                                                                                                                                                                                                                                                                                                           SINCE THE
                                       Data situation uncertain due to corona effects, forecast to mid-year 2020		                                                                                                                                                                                                                                                                 BEGINNING OF
                                                                                                                                                                                                                                                                                                                                                                                   THE CORONA
                                                                                                                                                                                                                                                                                                                                                                                   PANDEMIC.

16                                PROPERTY MARKET REPORT 2019
                                                         2020                                                                                                                                                                                                                                                                                                            LOGISTICS PROPERTY MARKET   17
PROPERTY MARKET REPORT 2020 - BUSINESS PROMOTION
Housing at Kaltenweider Platz, Langenhagen

                                               Residential

             RESIDENTIAL
                                               Rents 2020

                                                 Newbuild, peak rent in €/m2                                            15.70

                                                 Newbuild, average rent in €/m2                                         12.50

                                                 Re-let, peak rent in €/m2                                              13.30

                                                 Re-let, average rent in €/m 2
                                                                                                                        9.30

             PROPERTY
                                               Home buying 2020

                                                 Owner-occupied apartment, newbuild, prime group in €/m2                5,750

                                                 Owner-occupied apartment, newbuild, average in €/m 2
                                                                                                                    4,600

                                               Multipliers 2020

                                                 Apartment blocks/investment properties, newbuild, prime group          30.0

                                                 Apartment blocks/investment properties, newbuild, average              28.0

             MARKET
                                                 Apartment blocks/investment properties, stock, prime group              27.0

                                                 Apartment blocks/investment properties, stock, average                 25.0

                                             All figures refer to the State Capital Hannover.

                                             Source: bulwiengesa AG; data from market participants as at mid-2020

                                             The residential property market in the Hannover Region is characterised by
                                             regional providers and demand from private households. Population growth
                                             in the state capital and neighbouring municipalities has led to rising demand
                                             in the residential property market in recent years. At the same time, housing
                                             completions in the city and surrounding area has been insufficient, so a
                                             considerable need for new housing exists at present and will continue in the
                                             future.

                                             MARKET MOOD:
                                             POSITIVE AND PRACTICALLY NO
                                             NOTICEABLE IMPACT FROM THE
                                             CORONA CRISIS.

        18    PROPERTY MARKET REPORT 2020                                                  RESIDENTIAL PROPERTY MARKET          19
MARKET MOODS
     AND TRENDS

     After a brief corona lull, which was probably due                                   Building permits and completions                                                                                  Purchase prices of owner-occupied apartments                                               Residential rents in the prime price segment in Hannover
     more to uncertainty and a general wait-and-see                                      City and Hannover Region 2015 to 2019                                                                             (newbuilds) in Hannover 2015 to 2020                                                       2015 to 2020
                                                                                         (based on residential units)
     attitude at the beginning of the lockdown, the                                                                                                                                                        6,000                                                                                      18
     residential property market is currently crisis-                                                                                                                                                                                                                                                 16
                                                                                         5,000                                                                                                             5,000
     proof and comparatively unfazed by the impact
                                                                                                                                                                                                                                                                                                      14
     of the corona pandemic. At the moment, the
                                                                                                                                                                                                           4,000                                                                                      12
     overwhelming majority of regional market players
                                                                                                                                                                                                                                                                                                      10
     see no negative impacts of corona on ongoing

                                                                                                                                                                                              in €/m2

                                                                                                                                                                                                                                                                                            in €/m2
                                                                                                                                                                                                           3,000
                                                                                                                                                                                                                                                                                                      8
     and planned projects. For the short term, the                                       4,000
                                                                                                                                                                                                           2,000                                                                                      6
     residential property market in Hannover is experi-
     encing minimal effects from the crisis. Supply and                                                                                                                                                                                                                                               4
                                                                                                                                                                                                           1,000
     demand for residential property continues undi-                                                                                                                                                                                                                                                  2

     minished. Purchase prices and rents are stable to                                                                                                                                                     0                                                                                          0

     slightly rising.                                                                    3,000

                                                                                                                                                                                                                                                                                 2020

                                                                                                                                                                                                                                                                                                                                                                          2020
                                                                                                                                                                                                                                                                                                                   2015

                                                                                                                                                                                                                                                                                                                                                    2018
                                                                                                                                                                                                                                                                                                                             2016

                                                                                                                                                                                                                                                                                                                                                            2019
                                                                                                                                                                                                                     2015

                                                                                                                                                                                                                                                              2018
                                                                                                                                                                                                                                   2016

                                                                                                                                                                                                                                                                     2019
                                                                                                                                                                                                                                              2017

                                                                                                                                                                                                                                                                                                                                        2017
                                                           Number of residential units

     However, even before the crisis a stabilisation in
     purchase/rental rates had already been apparent                                                                                                                                                                 Average                         Prime group                                                    Re-let                Newbuild
     for higher-priced offers. This ongoing trend has
                                                                                         2,000                                                                                                             Source: bulwiengesa AG                                                                     Source: bulwiengesa AG
     been reinforced by the effects of the corona
                                                                                                                                                                                                                Data situation uncertain due to corona effects                                             Data situation uncertain due to corona effects
     pandemic. For the medium to long term, negative                                                                                                                                                            Forecast to mid-year 2020                                                                  Forecast to mid-year 2020
     effects could take on a "hotspot" character,
     where sectors or large companies are particularly
     hard hit. It therefore remains to be seen in the                                    1,000
     Hannover Region to what extent the macroeco-                                                                                                                                                          Residential properties – Multipliers 2015 to 2020
     nomic crisis will impact on major, sector-leading
     companies, e.g. in the automotive and tourism                                                                                                                                                         30

     sectors, which could possibly lead to sustained job                                                                                                                                                   28

     losses and widespread drops in income.                                              0                                                                                                                 26
                                                                                                                                                       2018
                                                                                                        2015

                                                                                                                         2016

                                                                                                                                                                       2019
                                                                                                                                         2017

                                                                                                                                                                                                           24
     If the need for affordable or subsidised housing                                                                                                                                                      22
     were to increase even more than previously,

                                                                                                                                                                                              Multiplier
                                                                                             Permits surrounding area                                                                                      20
     regional actors would see a future need for
                                                                                             Permits Hannover city                                                                                         18
     action. From the perspectives of project devel-
                                                                                             Completions surrounding area                                                                                  16
     opers and housing construction companies, any                                           Completions Hannover city                                                                                     14
     scope for increasing prices for privately financed
                                                                                         Source: State Office for Statistics of Lower Saxony (Landesamt für Statistik Niedersachsen), 2020                 12
     apartments is almost exhausted. This is posing                                      (Construction of new residential and non-residential buildings; excluding construction measures on
                                                                                         existing buildings and excluding residential homes; time series M8100116 and M8090116)		                          10
     increasing problems for companies due to resi-
     dential construction developments in the past

                                                                                                                                                                                                                                                                                                                                                                   2020
                                                                                                                                                                                                                       2015

                                                                                                                                                                                                                                                                                                           2018
                                                                                                                                                                                                                                                       2016

                                                                                                                                                                                                                                                                                                                                        2019
                                                                                                                                                                                                                                                                                 2017
     having usually been possible through publicly and
     privately cross-financed projects.
                                                                                                                                                                                                                   Apartment buildings (existing) average
                                                                                                                          THE SUPPLY AND                                                                           Apartment buildings (existing) prime

                                                                                                                          DEMAND FOR                                                                               Apartment buildings (newbuild) average
                                                                                                                                                                                                                   Apartment buildings (newbuild) prime
                                                                                                                          RESIDENTIAL PROPERTY                                                             Source: bulwiengesa AG
                                                                                                                          IS UNDIMINISHED.                                                                      Data situation uncertain due to corona effects, forecast to mid-year 2020

20   PROPERTY MARKET REPORT 2020                                                                                                                                                                                                                                                                                                                  RESIDENTIAL PROPERTY MARKET    21
Hirmer, Schillerstrasse Hannover

                                                                      RETAIL
                                                                      PROPERTY
                                                                      MARKET
                                                                      Retail 	                                                                                         In terms of turnover, the Hannover Region is one of the
                                                                                                                                                                       strongest retail locations in Germany. In 2019, estimated retail
                                                                      Sales area Hannover Region in m2                                                        2.1 m
                                                                                                                                                                       sales reached around € 7.9 billion. For 2020, pre-corona
                                                                        Surrounding area                                                                     1.15 m
                                                                                                                                                                       forecasts for the region remained at around € 7.6 billion. In
                                                                        Hannover city                                                                       0.84 m
                                                                                                                                                                       addition to Hannover's city centre with its prime locations of
                                                                          of which inner city Hannover (Mitte district)                                   285,000
                                                                                                                                                                       Georgstrasse and Bahnhofstrasse, customers are also attracted
                                                                      Retail centrality 2020        (Germany = 100)                                                    by specialist retail centres, shopping centres, locations in
                                                                        Hannover city                                                                         120.9    various city districts and attractive town centres in the
                                                                        Surrounding area                                                                      106.3    surrounding area.
                                                                      Purchasing power 2020 in €                                                             8.21 b

                                                                        Hannover city                                                                         3.77 b

                                                                        Surrounding area                                                                     4.44 b

                                                                      Retail sales 2020 in €                                                                 7.56 b

                                                                        Hannover city                                                                        3.95 b                                MARKET MOOD:
                                                                        Surrounding area                                                                     3.61 b                                NEGATIVE TRENDS ARE
                                                                      Rent Q1/2020
                                                                                                                                                                                                   EXPECTED TO INTENSIFY.
                                                                        Peak rent, prime city location in €/m2*                                                 185

                                                                        Average rent, prime city location in €/m2*                                              145

                                                                      Yields Q1/2020

                                                                        Net initial yield in prime locations*                                                4.0 %

                                                                        Net initial yield in specialist retail centres                                        5.1 %
                                                                      * Bahnhofstrasse, Grosse Packhofstrasse, Georgstrasse

                                                                      Source: Retail portfolio surveys commissioned by the Hannover Region (data at end of
                                                                      2016); MB-Research 2020; estimates from market participants at the end of the first quarter
                                                                      of 2020

                                                                          Data situation uncertain due to corona effects
                                                                          Forecast values are from the first quarter of 2020.

22   PROPERTY MARKET REPORT 2020                                                                                                                                                                         RETAIL PROPERTY MARKET           23
Retail indexes 2015 to 2020                                                                                                                                                                        MARKET MOODS
                                                130
                                                                                                                                                                                                                                                   AND TRENDS

                                                125
                                                                                                                                                                               Turnover index, Hannover
                                                                                                                                                                                                                                                   In 2019, rental turnover in the retail sector had        Despite the current easing of lockdown for tradi-      Corona should however not be seen as the trigger
                                                                                                                                                                               Turnover index, region
                                                120
                                                                                                                                                                                                                                                   stabilised in Hannover's prime locations as well as      tional brick-and-mortar retailing in the town and      for an unprecedented crisis in traditional retailing,
                                                                                                                                                                               Centrality index, Hannover
                                                                                                                                                                                                                                                   in the city’s individual district locations and in the   district locations in the Hannover Region, it will     but rather as an accelerator of existing trends. In
                                                                                                                                                                               Centrality index, region
                                                115
                                                                                                                                                                                                                                                   surrounding town centres and shopping centres.           take longer before widespread normalisation oc-        Hannover's prime locations, a decline/stabilisa-
                                                                                                                                                                               Purchasing power index, Hannover
 Germany = 100

                                                110                                                                                                                            Purchasing power index, region                                      In 2020, the year got off to a positive start and        curs. Expectations of declining incomes and a          tion in peak rents had already been observable
                                                                                                                                                                                                                                                   demand was good, largely due to gastronomy               lower propensity to consume are affecting retail       over recent years. Online retail is the current
                                                105                                                                                                                    Source: MB Research, 2020                                                   concepts in the traditional retail locations.            sales now and are expected to do so in the future.     growth driver in the retail sector and can con-
                                                100                                                                                                                        Forecast data uncertain due to corona effects                                                                                    It remains to be seen whether economic stimuli,        solidate its position during the pandemic while
                                                                                                                                                                                                                                                   Food retailers and local shops, by supplying es-         e.g. from the temporary reduction in value-added       expanding at the expense of brick-and-mortar
                                                95
                                                                                                                                                                                                                                                   sentials, were able to escape the corona down-           tax, will help brick-and-mortar retailing and gas-     retailing. Insolvencies, particularly in the case of
                                                90                                                                                                                                                                                                 ward trend in the rest of the retail sector and, in      tronomy to stabilise sales in the short term. Reve-    large department stores, fashion retail and ca-
                                                                                                                                                                                                                                                   some cases, substantially increased their sales.         nue losses for tenants have also affected retail       tering, could lead to many concepts (including

                                                                                                                                                     2020
                                                           2015

                                                                             2016

                                                                                                                                     2019
                                                                                                                 2018
                                                                                               2017

                                                                                                                                                                                                                                                   This crisis-driven demand has now returned to            property owners, resulting in rent losses or de-       chain stores) permanently leaving the Hannover
                                                                                                                                                                                                                                                   normal. In Hannover's city centre, 70–80 % of the        mands for rent reduction.                              Region and Hannover city centre. Town districts
                                                Retail rents 2015 to 2020                                                                                                                                                                          previous year's footfall figures (as of the begin-                                                              and integrated retail locations in the surrounding
                                                                                                                                                                                                                                                   ning of July 2020) will again be achieved. Visitor       Many businesses are currently adopting a wait-         area appear to be benefiting from their proxim-
                                                260
                                                                                                                                                                                                                                                   numbers had fallen by over 80 % in some of the           and-see attitude. The expansion of new retail          ity to customers and their local supply function,
                                                240

                                                220
                                                                                                                                                                                                                                                   main shopping streets.                                   concepts from Germany and abroad has been              and could recover more quickly in the foreseeable
                                                200
                                                                                                                                                                                                                                                                                                            largely put on hold for the time being, with de-       future.
                                                180                                                                                                                                                                                                                                                         mand for traditional retail space initially collaps-
                                                                                                                                                                                                                                                                                                            ing completely. This should also have an impact
 Peak rent, city in €/m2

                                                160
                                                140                                                                                                                                                                                                                                                         on the demand for and positioning of retail prop-
                                                120                                                                                                                                                                                                                                                         erties on the investment market. The strength
                                                100                                                                                                                                                                                                                                                         and duration of such effects is currently hard to
                                                80                                                                                                                                                                                                                                                          assess and depends on the further course of the
                                                60                                                                                                                                                                                                                                                          infection.
                                                40

                                                20

                                                0
                                                                                                                                                                                                               2020
                                                                    2015

                                                                                                                                                        2018
                                                                                                2016

                                                                                                                                                                                    2019
                                                                                                                             2017

                                                                                                                                                                                                               Q1/

                                                      Peak rent, city (prime location)                  Average rent, city (prime location)
                                                Source: bulwiengesa AG, estimates by market participants in mid 2020         Data situation uncertain due to corona effects, data status Q1/2020

                                                                                                                                                                                                                                                                                                                                                                                 CORONA DID NOT
                                                Footfall, prime locations, Hannover
                                                                                                                                                                                                                                                                                                                                                                                 TRIGGER THE
                                                                                                                                                                                                                                                                                                                                                                                 CRISIS IN BRICK-
 Comparison with previous year (2019 = 100 %)

                                                120

                                                100
                                                                                                                                                                                                                                                                                                                                                                                 AND-MORTAR
                                                                                                                                                                                                                                                                                                                                                                                 RETAILING, BUT
                                                80

                                                60

                                                40
                                                                                                                                                                                                                                                                                                                                                                                 IT DID MASSIVELY
                                                20                                                                                                                                                                                                                                                                                                                               ACCELERATE
                                                0                                                                                                                                                                                                                                                                                                                                TRENDS.
                                                        Jan. 2020                     Feb. 2020                         March 2020                   Apr. 2020                       May 2020                         June 2020

                                                                                                                                                                                                                                       Hirmer, Schillerstrasse Hannover
                                                                                                                                                                              Source: hystreet.com GmbH, data as at July 2020, total
                                                         Karmarschstraße                               Georgstraße                          Große Packhofstraße               number of registered passers-by per month. Bahnhof-
                                                                                                                                                                              strasse was not included for technical reasons.

24                                              PROPERTY MARKET REPORT 2020                                                                                                                                                                                                                                                                                             RETAIL PROPERTY MARKET                25
me and all hotel hannover, Aegidientorplatz Hannover

     HOTEL
     PROPERTY
     MARKET
     Hannover's tourism has grown steadily in recent years.                      Hotel
     Overnight stays recently numbered over 4 million per year in the
                                                                                 Number of tourist accommodation establishments 2019            354
     city and surrounding area. Business travellers who come to
                                                                                  Hannover city                                                   111
     Hannover, especially for the major trade fairs, are not the
                                                                                  Surrounding area                                               243
     region’s only visitors. An increasing number of city tourists have
                                                                                 Hotels 2019                                                     119
     also been discovering the Hannover Region.
                                                                                  Hannover city                                                   45

     The attractiveness of Hannover as a destination is also                      Surrounding area                                                74

     reflected in the hotel property market. At the beginning of                 Number of beds (all accommodation types) 2019                31,621
     2020, around ten hotel projects offering around 1,350 rooms                  Hannover city                                                14,149
     were being completed or under construction. At least twelve                  Surrounding area                                             17,472
     hotels with around 1,700 rooms are in planning from 2020.                   Beds in hotels 2019                                          14,938

                                                                                  Hannover city                                                9,154

                                                                                  Surrounding area                                             5,784

                                                                                 Nights (all accommodation types) 2019                        4.26 m

                                                                                  Hannover city                                               2.34 m

     MARKET MOOD:                                                                 Surrounding area                                            1.92 m

     THE EFFECTS OF THE CRISIS                                                   Nights in hotels 2019

                                                                                  Hannover city
                                                                                                                                              2.39 m

                                                                                                                                               1.51 m
     ARE HITTING MEDIUM-SIZED                                                     Surrounding area                                            0.88 m

     BUSINESSES IN PARTICULAR.                                                   Arrivals (all accommodation types) 2019                      2.28 m

                                                                                  Hannover city                                                1.4 m

                                                                                  Surrounding area                                            0.88 m

                                                                                 Average length of stay in days (all accommodation types)
                                                                                 2019

                                                                                  Hannover city                                                   1.7

                                                                                  Surrounding area                                                1.9

                                                                                 Key figures for hotel chains, Hannover city (Fairmas) 2019
                          Figures represent the annual average for 2019.          Occupancy rate, 2019 average                                65.7 %
                          Source: State Office for Statistics of Lower Saxony
                          [Landesamt für Statistik Niedersachsen]; Fairmas,       Room price, 2019 average in €                               103.40
                          2020
                                                                                  RevPAR (revenue per room), 2019 average in €                 67.90
                             Current data for the hotel market at mid-2020
                             is not yet available. It is not possible to fore-    Net initial yield hotel in 2019                             4.50 %
                             cast the data at present.

26   PROPERTY MARKET REPORT 2020                                                                                                                        HOTEL PROPERTY MARKET                   27
Intercity Hotel at Raschplatz

                                                                                                                                                                                                                                                                                                                       THE SURVIVAL OF MANY
                                                                                                                                                                                                                                                                                                                       OWNER-MANAGED SMALL
                                                                                                                                                                                                                                     MARKET MOODS
                                                                                                                                                                                                                                     AND TRENDS
                                                                                                                                                                                                                                                                                                                       AND MEDIUM-SIZED HOTELS
                                                                                                                                                                                                                                                                                                                       IS UNDER THREAT FROM THE
                 Beds in hotels – development 2015 to 2019                                                                    Development of hotel businesses 2015 to end of Q1/2020                                                 The effects of the pandemic are being felt particularly strongly in the hotel     CORONA CRISIS.
                                                                                                                                                                                                                                     market. An absence of business travellers, cancellations of trade fairs and
                 9,500                                                                                                        80
                                                                                                                                                                                                                                     other major events as well as travel restrictions have placed extreme
                 9,000                                                                                                        75
                                                                                                                                                                                                                                     pressure on hotels in recent weeks. Looking at the national market data and
                                                                                                                              70
                 8,500
                                                                                                                                                                                                                                     applying it to the Hannover region, initial easing of restrictions has relieved
                                                                                                                              65
                 8,000                                                                                                                                                                                                               the situation only to a limited extent. Across Germany, occupancy rates in

                                                                                                         Number of hotels
                                                                                                                              60
Number of beds

                 7,500                                                                                                                                                                                                               hotels open in June 2020 was only around 25 %. The average room rate was
                                                                                                                              55
                 7,000                                                                                                                                                                                                               € 88.40 and average revenue per room (RevPAR) € 22.20. The hotel industry,
                                                                                                                              50
                                                                                                                                                                                                                                     especially in cities, is therefore still a long way from achieving revenues to
                 6,500
                                                                                                                              45
                                                                                                                                                                                                                                     cover costs or make a profit.
                 6,000                                                                                                        40
                 5,500                                                                                                        35
                                                                                                                                                                                                                                     The extent to which the existence of the regional hotel industry is actually at
                 5,000                                                                                                        30                                                                                                     risk depends to a large extent on further incidences of the virus as well as on
                                                                                                                                                                                                                                     the prospects of a market recovery. All major leading trade fairs at the

                                                                                                                                                                                                                           2020
                                                                                                                                          2015

                                                                                                                                                                                           2018
                                                                                                                                                          2016

                                                                                                                                                                                                             2019
                          2015

                                                                                 2018
                                            2016

                                                                                                2019

                                                                                                                                                                           2017
                                                                 2017

                                                                                                                                                                                                                           Q1/
                                                                                                                                                                                                                                     Hannover location have now been cancelled for 2020 or postponed until
                                                                                                                                                                                                                                     2021. The absence of business travellers in the current year can be compen-
                         City                      Surrounding area                                                                     City                            Surrounding area                                             sated only to a limited extent by city tourists, especially since events that
                 Source: State Office for Statistics of Lower Saxony [Landesamt für Statistik Nieder-                         Source: State Office for Statistics of Lower Saxony, 2020 (annual average 2015 to 2019                 attract visitors, such as sporting and cultural events, etc., have also been
                 sachsen], 2020 (annual average)                                                                              and data as at March 2020, based on hotels still open at that time)                                    cancelled.

                                                                                                                                                                                                                                     Many hotel businesses, especially owner-managed small and medium-sized
                                                                                                                                                                                                                                     businesses, may not survive the crisis under these conditions. Their place
Key data for the Hannover hotel market 2015 to 2019                                                                           Overnight stays in the Hannover Region 2015 to 2019                                                    could be taken by projects developed by the brand-name hotels. From the

                                                                                                                              4.5
                                                                                                                                                                                                                                     property industry's point of view, the economic consequences of the crisis
                                          2015         2016              2017           2018    2019                                                                                                                                 could lead in the short to medium term to a trend towards cheaper concepts
       Hotels                                42           40               43             45      45                          4.0                                                                                                    in the budget and economy sectors. Future project developments may need
                                                                                                                                                                                                                                     to be based on this approach. Although the number of hotel businesses will
       Average                             64.5         63.3             64.8           63.6    65.7                          3.5
                                                                                                                                                                                                                                     decline, the number of beds in Hannover is likely to increase slightly or at
       occupancy in %
                                                                                                                              3.0
                                                                                                                                                                                                                                     least remain stable due to the number of planned hotels to date, with hotel
       Average room                        91.0         99.3             101.6          104.5   103.4                                                                                                                                operations tending to become larger.
       price in €
                                                                                                         Nights in millions

                                                                                                                              2.5
       RevPAR (revenue                     58.8         62.8              65.1          66.4     67.9                                                                                                                                Property investors will also have to contend with these challenges. In recent
                                                                                                                              2.0
       per available                                                                                                                                                                                                                 years, hotels have also been among the increasingly sought-after asset
       room) in €                                                                                                                                                                                                                    classes in Hannover. However, it is questionable whether the many projects
                                                                                                                              1.5
       Average stay                          1.7           1.7             1.7            1.7      1.7                                                                                                                               in the pipeline will actually be realised. Currently, many of the negotiations
       (in days)                                                                                                              1.0                                                                                                    and strategic projects have been put on ice, aborted or suspended. All
                                                                                                                                                                                                                                     regional market players expect that the hotel industry and thus the hotel
       Beds in hotels                    8,889         8,357            8,806           9,118   9,154
                                                                                                                              0.5
                                                                                                                                                                                                                                     property market in particular will take the longest to overcome the
Source: Figures for Hannover city; State Office for Statistics of Lower Saxony, Fairmas performance
                                                                                                                              0
                                                                                                                                                                                                                                     consequences of the corona crisis. Investors will have to price in these
indicators for the hotel chain industry, 2020
                                                                                                                                                                                                                                     increases in risk and reflect them in their returns.
                                                                                                                                                 2015

                                                                                                                                                                                                      2018
                                                                                                                                                                 2016

                                                                                                                                                                                                                        2019
                                                                                                                                                                                   2017

                                                                                                                                    Hannover                 Surrounding area
                                                                                                                              Source: State Office for Statistics of Lower Saxony [Landesamt für Statistik Niedersachsen],
                                                                                                                              2020, Table Z7360151

                                                                                                                                    For all figures: Current data for the hotel market at mid-2020 is not yet available. It is not
                                                                                                                                    possible to forecast the data at present.

                   28      PROPERTY MARKET REPORT 2020                                                                                                                                                                                                                                                                           HOTEL PROPERTY MARKET           29
IMPRINT

                                Region president
                                Business and employment promotion department

The report’s content has been   ANGERMANN Hannover GmbH                                                                        Images   Continental AG/ Henn: page 8
    prepared by the Property    Aurelis Real Estate Service GmbH                                                                        Dirk Laubner: page 17
 Market Report Project Group    BAUM Unternehmensgruppe                                                                                 Frank Aussieker: page 18
                                bauwo Grundstücksgesellschaft mbH                                                                       Henning Scheffen Photography: page 3 below
                                BEOS AG                                                                                                 Peter Hiltmann: page 3 above
                                Delta Domizil GmbH                                                                                      Olaf Mahlstedt: cover, pages 6, 11 , 13 , 14 , 22 , 25, 27
                                Deutsche Reihenhaus AG                                                                                  Region Hannover, Sylvia König-Hapke: pages 5, 29
                                DIE WOHNKOMPANIE NORD GmbH
                                ENGEL & VÖLKERS COMMERCIAL Hannover
                                FIH Fürst Immobilien Hannover
                                GlaserProjektInvest GmbH
                                Gundlach Bau und Immobilien GmbH & Co. KG
                                GWH Bauprojekte GmbH
                                hanova WOHNEN GmbH
                                HAUS & GRUNDEIGENTUM Service
                                HE Hannover Estate GmbH
                                HENSCHEL IMMOBILIEN
                                HOCHTIEF Infrastructure GmbH Building Hannover
                                INTERHOMES AG
                                JLL SE
                                KSG Hannover GmbH
                                Landeshauptstadt Hannover, Fachbereich Wirtschaft
                                MERAVIS BAUTRÄGER GmbH
                                P3 Pekrul ProjektPartner GmbH
                                Business and Employment Promotion Department Hannover Region
                                S-GewerbeImmobilienVermittlung Hannover GmbH
                                STRABAG Real Estate GmbH

                                In cooperation with bulwiengesa AG

                        Text    Hilmar Engel, Economic Development

                       Editor   Sylvia König-Hapke, Marketing Department

                      Layout    neuwaerts GmbH

                     Printing   Druckhaus Pinkvoss GmbH

                        Issue   20/2

                       As at    8/2020

                                No guarantee is given for the correctness of the information, errors and omissions reserved.

    30    PROPERTY MARKET REPORT 2020                                                                                                                                                                IMPRINT | IMAGES   31
REGION HANNOVER                            STATE CAPITAL HANNOVER
Business and Employment Promotion          Business Promotion

Haus der Wirtschaftsförderung              Haus der Wirtschaftsförderung
Vahrenwalder Straße 7                      Vahrenwalder Straße 7
30165 Hannover                             30165 Hannover

Hilmar Engel
Tel:      +49 (0) 511 61623-241            Tel:      +49 (0) 511 16831-313
Fax:      +49 (0) 511 61623-453            Fax:      +49 (0) 511 16841-245

wirtschaftsfoerderung@region-hannover.de   wirtschaftsfoerderung@hannover-stadt.de
www.wirtschaftsfoerderung-hannover.de      www.wirtschaftsfoerderung-hannover.de

       www.immobilienmarktbericht-hannover.de
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