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STUTTGART - ATTRACTIVE LOCATION FOR INNOVITION - The 2018/2019 Stuttgart office market report - German Property Partners
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 ST UT TGART – AT T RAC T I VE LOC ATI O N FO R I N N OV I TI O N
 The 2018/2019 Stuttgart office market report

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STUTTGART - ATTRACTIVE LOCATION FOR INNOVITION - The 2018/2019 Stuttgart office market report - German Property Partners
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                                                                                                                                                                     Alte Bahndirektion
     Look 21
                                                                                                                                                                     Büro + Wohnen
     Office + Residential                                                                                                                                            Büro 43.000 m²
     Office 21 000 m²                                                                                                                                                Fertigstellung 2025
     100 % take-up
     Complection Q1/2019

                  Lautenschlager Areal II
                  Office + Retail + Residential
                                                                                                                                                                                                                                                        K32
                  Office 1 600 m²                                                                                                                                                                                                                       Office + Hotel
                  100 % take-up                                                                                                                                                                                                                         Office 13 000 m²
                  Complection Q2/2020                                                                                                                                                                                                                   100 % take-up
                                                                                                                                                                                                                                                        Complection Q3/2019

                                      THEO 9
                                      Office + Retail
                                      Office 3 400 m²
                                      100 % take-up                                                                                                                                                                                             Eberhardstraße 65
                                      Complection Q1/2018
                                                                                                            Königstraße 29                                                                                                                      Office + Retail + Residential
                                                                                                                                                                                                                                                Office 760 m²
                                                                                                            Office 1 100 m²
                                                                                                                                                                                                                                                Complection Q2/2021
                                                                                                            100 % take-up
                                                                                                            Complection Q1/2019

                                                                                                                                                                    Stiftstraße 3
                Calwer Passage                                                                                                                                      Office + Retail
                Office + Retail + Residential                                                                                                                       Office 700 m²
                Office 11 300 m²                                                                                                                                    100 % take-up
                100 % take-up                                                                                                                                       Complection Q1/2019
                Complection Q4/2020                                                                                               Königstraße 41
                                                                                                                                  Office + Retail
                                                                                                                                  Office 750 m²
                                                                                                                                  Complection 2020/2021
                                                                                                                                                                                                            Eberhardhöfe
                                                                                                                                                                                                            Office + Retail + Residential
                                                                                                                                                                                                            Office 4 000 m²
                                                                                                                                                                                                            100 % take-up
                                                                                                                                                                                                            Complection Q1/2019

                                                                                                                                                                                                                                   Source: Research E & G Real Estate GmbH ©, Stand: 31.12.2018
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      An overview of the                                                                                                                                                         CONTENTS
      Stuttgart office market

                                                                                                                                                                                                          D E V E LO PM E N TS I N 2018/2019                                                                    ST U T TG A RT I N D E TA I L
                    Volume          Representative    Average central           Vacancies              Vacancies                Total space in    Completion    Pre-let volume
      YEAR           in m²           prime rents         business                 in m2                  in %                    million m2      volume in m2        in m2
                                        per m2         district rents
                                                          per m2
                                                                                                                                                                                               06                                                     14                                                                   23
                                                                                                                                                                                           Foreword                             Demand continues to be strongest                                 Stuttgart central business district/city centre –
     2003           149 000            17.50 €            14.50 €                379 000                   5.30                     6.973          145 000          80 000
                                                                                                                                                                                    The City of Stuttgart and                        from industrial companies                                            Locations experiencing shortages
                                                                                                                                                                                        E & G Real Estate
     2004           152 000            17.00 €            14.50 €                415 000                   5.70                     7.102          129 000          93 500
                                                                                                                                                                                                                                                      15                                                                   24

     2005           145 000            17.00 €            13.50 €                402 000                   5.60                     7.170          68 500           51 400                     08                                Number of contracts concluded                                                   Northern Stuttgart –
                                                                                                                                                                                        Developments in                                  continues to decline                                            Supply of offices virtually exhausted
     2006           140 000            17.50 €            13.60 €                467 400                   6.50                    7.222*          52 500           20 500                 2018/2019
                                                                                                                                                                                                                                                      16                                                                   26
     2007           169 000            17.50 €            14.50 €                466 000                   6.40                     7.253          32 600           23 400                     09                                    Prime rents falling due to                                                   Eastern Stuttgart –
                                                                                                                                                                                      Ready for the future                       lack of newly constructed space                                           A transformation is taking place
     2008           180 000            18.00 €            14.50 €                460 000                   6.20                     7.367          117 000          116 000

                                                                                                                                                                                               10                                                     19                                                                   28
     2009           171 000            18.00 €            13.60 €                453 000                   6.12                     7.401          40 000           22 000
                                                                                                                                                                                 Changes in the urban landscape                              Limited offering                                                    Southern Stuttgart –

     2010           194 000            17.50 €            14.30 €                480 000                   6.46                     7.425          42 400           22 400        thanks to innovative district                               for office users                                           Dynamic development in some areas
                                                                                                                                                                                         development
     2011           285 000            18.80 €            14.30 €                424 000                   5.70                     7.449          45 900           41 200                                                                            20
                                                                                                                                                                                               12                                            Solid take-up in                                                              31
     2012           191 500            20.00 €            14.50 €                399 000                   5.40                     7.416          37 000           36 300
                                                                                                                                                                                       Declining take-up                                    the Top 7 locations                                             The Stuttgart office market –
                                                                                                                                                                                     No major transactions                                                                                                         Take-up in 2018
     2013           258 000            20.00 €            14.40 €                365 000                   4.87                     7.496          81 200           62 700

     2014           278 000            21.50 €            15.30 €                325 000                   4.30                     7.536          72 500           91 500
                                                                                                                                                                                                              P R O S P E C TS F O R 2019

     2015           290 000            22.80 €            15.90 €                270 000                   3.54                     7.632          74 900           62 100

                                                                                                                                                                                               32                                                     33
     2016           432 000            23.00 €            16.20 €                220 000                   2.80                     7.728          149 200          119 300
                                                                                                                                                                                          Prospects for                                   Prospects for 2019:
                                                                                                                                                                                              2019                                          A challenging year
     2017           270 000            24.30 €            18.50 €                167 000                   2.10                     7.853          128 600          110 500

     2018           218 000            23.00 €           18.20 €                186 000                    2.30                    7.946           92 800           64 300

                                                                                                                                                                                                                 YO U R C O N TAC TS
     * Data from a survey by BulwienGesa AG + Baasner, Möller & Langwald GmbH                        Source: Research E & G Real Estate GmbH ©, Stand: 31.12.2018

                                                                                                                                                                                                                         34

                                                                                                                                                                                                          E & G R E A L E STAT E A N D G P P

                                                                                                                                                                                                                         36

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          FOREWORD
          T H E C I T Y O F ST U T TG A RT A N D E &G R E A L E STAT E

     Stuttgart is a strong location for companies                                                                                      Innovative power
     Its economy is set for success                                                                                                    continues unbroken

     Stuttgart is booming! The number of new residents is growing; the city is becoming ever younger and any many people view          Stuttgart’s businesspeople and citizens enjoy innovation, demonstrating an interest in future-oriented solutions which
     it and the surrounding region as travel destinations. In addition to this, the economy is currently prospering. Stuttgart comes   others struggle to match. Two prestigious undertakings are good examples of this mindset. The ARENA2036 project has
     into its own when the task is to offer a good work-life balance. The city is recognized for its good jobs and the excellent       been initiated to carry out research into the wide-ranging field of mobility; developing new production companies in the
     salaries which employees earn. Swabians are, however, not just hard workers but also know how to enjoy themselves. We             automotive industry and shaping technological change. It is located on the campus of Stuttgart University and funded by
     are thus particularly proud of the fact that Stuttgart has been named “Germany’s City of Culture” for the fourth time in a row.   numerous respected companies and research institutions in the city and regional state. Meanwhile, the central question
                                                                                                                                       posed by the 2027 IBA StadtRegion Stuttgart international architecture exhibition is “How will we live and work in the
     The world has become faster moving. So we cannot, and do not wish to, take our current success story for granted. Stuttgart       21st century?” Focuses include the development of buildings which are precisely tailored to meet users’ living and working
     wants to continue to offer space for innovation. In recognition of this, the city’s government is supporting diversification of   requirements; creation of vibrant districts and support for infrastructure measures. By the way, on the subject of vibrant
     the economy to ensure that we are equipped to face the future. The creative economy is thus receiving active assistance, as       districts – just how much innovative urban developments have changed the face of Stuttgart in recent years can be seen
     is the healthcare sector in the form of major construction projects at Stuttgart Medical Centre. The city and region are also     at various locations, particularly in the city’s north and east. The new buildings which have already been completed or are
     cooperating to expand the broadband network and deliver a future-proof infrastructure. A matter which is particularly close       still at the planning or construction stage in the Europaviertel district and the Pragsattel, Löwentor and Neckarpark areas are
     to our hearts is the creation of links between Stuttgart’s strong scientific community and business in line with the close        helping to relieve pressure on the extremely tight residential market and increase the offering of modern, high quality office
     geographical proximity of cutting-edge research and top companies. In 2019 the “1st Stuttgart Scientific Festival” will show      space which is so urgently required.
     how smart the clever ideas for the city’s future can be.
                                                                                                                                       Stuttgart’s office market is experiencing challenging conditions. The amount of space available has once again declined, while
     You are invited to actively accompany the city on its journey into the future.                                                    vacancy rates are at an all-time low. Under such conditions it is extremely important not only to carry out creative planning
                                                                                                                                       and development of new office buildings but also to optimize older existing spaces. This will ensure that the city continues
                                                                                                                                       to be able to develop its dynamic power and innovation to the fullest extent.

                                                                                                                                       The following pages present more detailed information on the current situation. We hope that you will find the report both
                                                                                                                                       informative and interesting reading and look forward to your feedback and comments.

     FRITZ KUHN                                                  INES AUFRECHT                                                         MARIO CAROLI                                     BJÖRN HOLZWARTH
     Lord Mayor                                                  Director of Business Development                                      Managing Partner,                                Managing Partner,
     of the State Capital                                        of the State Capital                                                  E & G Real Estate                                E & G Real Estate

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                                                                                                                                                                  D E V E LO PM E N TS I N 2018/2019

        DEVELOPMENTS IN                                                                                          Ready for
        2018/2019                                                                                                the future
     The future starts now. Stuttgart’s attraction and capacity for innovation                              The trends of recent years, such as changes in forms of work and, in consequence,
     are reflected both in numerous projects and booming districts and                                      working environments as well as huge changes in forms of production, are gradually
     also the continuous inflow of well educated workers.                                                   becoming reality. Preliminary work for these changes has either been completed or is
     Performance in the office real estate segment is currently having                                      entering the decisive phase.
     difficulty keeping up with this trend.
                                                                                                            THE PREREQUISITES ARE IN PLACE
                                                                                                                                                                                               have been met. The residential market is currently very tight,
                                                                                                            Corresponding mobile network capacities are key –                                  however the decision to move away from the principle of
                                                                                                            auctioning of the mobile communication frequencies                                “internal development in preference to external development”
                                                                                                            for the 5G network will take place in spring 2019. The                             has created the basis for market conditions to ease in
                                                                                                            automotive industry’s research into the development                                coming years. Improvements in the office market segment
                                                                                                            of new manufacturing processes is reflected in the                                 are not expected until 2023, when the site currently still in
                                                                                                            ARENA2036 (Active Research Environment for the Next                                use by German Railways in the Jägerstrasse area becomes
                                                                                                            Generation of Automobiles) project. In the field of artificial                     vacant, offering development potential in a prime city-
                                                                                                            intelligence (AI) together with the Region of Tübingen, the                        centre location. Approximately 70 000 to 100 000 m² of
                                                                                                            Region of Stuttgart has founded one of Europe’s largest                            office space could be created on the site, which is within
                                                                                                            research cooperation projects – Cyber Valley. Parallel to                          walking distance of Stuttgart’s new main train station.
                                                                                                            the development of self-driving vehicles the network of
                                                                                                                                                                                               IBA 2027 STADTREGION STUTTGART
                                                                                                            e-mobility charging stations is being significantly enlarged,
                                                                                                            while the city is promoting the use of bicycles through a                         The IBA international architecture exhibition, which will
                                                                                                            huge increase in the number of cycle paths. In addition to                         take place in 2027, is a particular incentive for development.
                                                                                                            this, not only is the attractiveness of public transport being                    The exhibition explores a diverse range of topics, seeking
                                                                                                            increased through a comprehensive reform of the tariff                             answers to the question “How will we live and work in the
                                                                                                            structure; its efficiency is also being continuously improved.                    21st century?” In the meantime a board of trustees has been
                                                                                                            Stuttgart’s population has grown to 614 000, making it                             established to address topics such as mobility; districts of
                                                                                                            Germany’s 6th largest city, and will continue grow thanks,                         the future; new building culture; sustainability; solidarity
                                                                                                            among other things, to the attractive employers throughout                         and participation in the city and region. In addition to future
                                                                                                            the region.                                                                        forms of living, issues such as what the working world of the
                                                                                                                                                                                               future will be like and what buildings are correspondingly
                                                                                                            EASING IN SIGHT
                                                                                                                                                                                               required are sure to play an important role in the board’s
                                                                                                            Industry in Stuttgart will continue to make huge efforts to                        considerations. The key focus will, however, be on how a
                                                                                                            respond to new market conditions and defend its position                           city and its environment can be reshaped to meet future
                                                                                                            on global markets. To this end it requires excellent workers,                      requirements and thus become future-proof. An exciting
                                                                                                            who can only be recruited if all other general parameters                          task!

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                                                           D E V E LO PM E N TS I N 2018/2019

          Changes in the urban landscape
          thanks to innovative district development
     The new building development projects of recent years have significantly changed the
     urban landscape, resulting in substantial upgrading of some city districts. The axis from
     the Europaviertel district to the Pragsattel, Löwentor Neckarpark areas in particular will
     contribute to a completely new urban landscape after the relevant plans have been realized.

     THE LIVELY EUROPAVIERTEL DISTRICT
                                                                                        empty manufacturing buildings in the surroundings were,
     The Europaviertel district has become an area characterized                        however, unattractive.
     by its lively nature. It is a successful combination of modern                     The development of the “Wizemann Complex”, with
     office spaces; high-end city apartments; retail units and                          an offering ranging from simple lofts to modern newly
     hotels. Construction on the remaining building plots is                            constructed properties, subsequently boosted the area’s
     already planned, with new projects also a mix of residential,                      value. In addition to this, a DIBAG office project, still under
     office and hotel space. The expansion of the inner city                            construction, has in the meantime already been fully
     ring will thus have been successfully completed in the                             let, while the “leo Business Campus Stuttgart”, a LBBW
     foreseeable future.                                                                Immobilien Development GmbH project, is under way on
                                                                                        the high-profile corner plot Pragstrasse/Löwentorstrasse
     DEVELOPMENT IN THE PRAGSATTEL AREA
                                                                                        and will significantly further upgrade the area. The
     Construction of the “MAYOFFICE” building plus a residential                        development of the “Mahle Future Campus” will close
     development project including offices will make the vacant                         the gap between the “Wizemann Complex” and Mahle’s
     plots around the theatre, disused for a long period, a thing                       corporate headquarters by creating state-of-the-art, high-
     of the past. They will be replaced by a new district with                          quality office space. Completion of the Rosenstein Tunnel at
     a well-balanced mix of cultural use; residential property                          the end of 2021 will result in a further improvement.
     and modern office spaces. The new project planned by
                                                                                        NECKARPARK IS CATCHING UP
     Bülow AG directly adjacent to the Pragsattel ridge is sure to
     become a landmark in the area. The “Porsche Design Tower”                          There was a long wait until construction work could begin
     – an 85-m tall structure – is scheduled for completion at                          on the 22-hectare former site of a railway freight yard. At
     the end of 2022 and will include office and hotel space. In                        present three office buildings are under construction, two
     addition to this, Porsche SE will be building its new Porsche                      of which will be occupied by the Stuttgarter Volksbank bank.
     Centre, with display areas, a gallery and workshops, on the                        Building of two further office projects is scheduled to begin
     neighbouring plot which it owns.                                                   in the very near future, with the architectural competition
                                                                                        for one of them already having taken place. Work on
     LÖWENTOR – A SHOOTING STAR
                                                                                        second-row residential properties will also commence
     The Löwentor area is set to undergo a major transformation                         shortly. A total of 850 apartments is planned as well as a
     after experiencing a Sleeping Beauty-like slumber for                              swimming baths and sports grounds. Taken in conjunction
     many years, despite the fact that construction of two new                          with the generous green space concept the Neckarpark area
     office buildings at the beginning of 2000 showed that the                          is becoming a new, modern urban district which offers a
                                                                                                                                                                                                                                   leo Business Campus Stuttgart
     location is of interest to office users. The old, in some cases,                   high quality of life.

                                                                                                                                                                                                                                          Source: LBBW Immobilien Development GmbH

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                                                           D E V E LO PM E N TS I N 2018/2019

          Take-up declining                                                                                                                               THE THREE LARGEST CONTRACTS CONCLUDED

          No major transactions
                                                                                                                                                             Tenant                                                          Submarket                                                      Total area

     Take-up to 31.12.2018 totalled approx. 218 000 m², thus falling below the 10-year aver-                                                                 Robert Bosch GmbH (Owner-occupier)                              Stuttgart-Feuerbach                                            Approx. 50 000 m2
     age of some 255 000 m². This was primarily due to the lack of large letting contracts in
                                                                                                                                                             Land Baden-Württemberg (Owner-occupier)                         Stuttgart-City centre                                          Approx. 10 800 m2
     2018.
                                                                                                                                                             Land Baden-Württemberg                                          Leinfelden-Echterdingen                                        Approx. 8 800 m2

     TAKE-UP FALLS BELOW THE 10-YEAR AVERAGE                                            FEUERBACH IS THE BEST-PERFORMING SUBMARKET

     At approx. 218 000 m² to 31.12.2018 total take-up for 2018                        The large owner-occupier contract concluded by Robert
                                                                                                                                                          LETTING PERFORMANCE FOR OFFICE SPACE IN STUTTGART 2008 – 2018 IN M2
     was some 19 % under the previous year (31.12.2017: 270                             Bosch GmbH resulted in the Stuttgart-Feuerbach submarket
     000 m²) and some 15 % below the 10-year average. Four                              recording the highest take-up figure (some 54 600 m²),
     owner-occupier contracts for take-up of around 67 000                              followed by Stuttgart-Bad Cannstatt (approx. 34 500
     m² - representing approx. 31 % of the total – made a key                           m²), where a DIBAG new construction project comprising
     contribution to overall results. Of this figure, 50 000 m² were                    around 10 000 m² in the Löwentor area was let to two              Ø letting performance: 254 950
     accounted for by a single company –Robert Bosch GmbH,                              users from the Industry segment. Stuttgart’s city centre
     who in the first quarter decided to occupy a building in the                       took third place with take-up of some 28 400 m² thanks
     Stuttgart-Feuerbach district. In addition to this, the State                       to the owner-occupier contract concluded by the State of
     of Baden-Württemberg acquired a building with some 10                              Baden-Württemberg for a property at Kriegsbergstrasse
     800 m² at Kriegsbergstrasse 32 in the city centre. The largest                    32. Overall the lack of offerings on the market meant that

                                                                                                                                                                    180 000

                                                                                                                                                                                171 000

                                                                                                                                                                                              194 000

                                                                                                                                                                                                         285 000

                                                                                                                                                                                                                           191 500

                                                                                                                                                                                                                                            258 000

                                                                                                                                                                                                                                                                278 000

                                                                                                                                                                                                                                                                                  290 000

                                                                                                                                                                                                                                                                                               432 000

                                                                                                                                                                                                                                                                                                           270 000

                                                                                                                                                                                                                                                                                                                          218 000
     single letting contract, for approx. 8 800 m², was also signed                     very few contracts were signed for newly constructed
     by the State of Baden-Württemberg for an existing building                         properties. In Stuttgart’s central business district the
     in Leinfelden-Echterdingen. This once again demonstrates                           Eberhardhöfe complex, with an area of approx. 4 100 m²
                                                                                                                                                                    2008        2009          2010      2011             2012             2013                2014                2015         2016       2017           2018
     the State’s importance as a client and player on the real                          and approaching completion, was exclusively let to co-
     estate market.                                                                     working space provider Design Offices. The remaining units
                                                                                        for the “Theo 9” project were also let to a single tenant,
                                                                                        while the “Lautenschlager-Areal” site has now also been           LETTING PERFORMANCE IN STUTTGART AND ITS SUBMARKETS IN M2
                                                                                        fully let. In total, however, only around 27 400 m² of space
                                                                                                                                                                                    2007      2008      2009          2010           2011             2012            2013           2014      2015      2016        2017           2018
                                                                                        were let in the CBD. The average value for the last 10 years is
                                                                                                                                                            Central
                                                                                        approx. 49 800 m².                                                  business district      61 500     44 400    38 200        32 800         63 000           61 500          34 600        53 100     65 700    52 800      51 600         27 400

                                                                                                                                                            City centre            46 600     41 700    83 800        66 600         97 500           58 400          51 000        44 200     53 500    32 200      39 300         28 400

                                                                                                                                                            Vaihingen/             13 700     18 500    20 200        26 200         56 300           18 200          62 000        34 700     56 300 141 200        52 000         30 200
                                                                                                                                                            Möhringen
                                                                                                                                                            Fasanenhof                2 300   10 600     2 700         5 300         12 500             7 400             5 700        9 100   10 300    19 600      18 600          6 700

                                                                                                                                                            Feuerbach/                6 800   12 300     3 300        28 500         24 800           18 700          27 200        34 700     37 400    64 700       5 800         54 600
                                                                                                                                                            Zuffenhausen

                                                                                                                                                            Degerloch                 7 200     9 200    4 900         2 100          4 000             4 800             1 900        1 500    1 300     7 100       9 700          3 200

                                                                                                                                                            Weilimdorf                5 100   12 800     5 900        11 400          5 500             5 300             7 700     30 900     42 900    33 100      18 100         15 400

                                                                                                                                                            Bad Cannstatt/         15 400     12 500     8 100         8 300         13 400           12 000          19 800        54 900     15 100    45 500      11 800         34 500
                                                                                                                                                            Wangen
                                                                                                                                                            Leinfelden-            10 400     18 000     3 900        12 800          8 000             5 200         47 900        14 900      7 500    35 800      63 100         17 600
                                                                                                                                                            Echterdingen

                                                                                                                                                            Total               169 000 180 000 171 000 194 000 285 000 191 500 258 000 278 000 290 000 432 000 270 000 218 000

                                                                                                                                                                                                                                                      Source for all diagrams: Research E & G Real Estate GmbH ©, current as of: 31.12.2018

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                                                          D E V E LO PM E N TS I N 2018/2019

          Demand continues to be strongest                                                                                                                                              Number of contracts concluded
          from industrial companies                                                                                                                                                     continues to decline
     Although demand has declined somewhat in the last two years industrial companies,                                                                                       The largest single transaction concluded in 2018 was the development project planned
     particularly in the automotive sector, continue to play the most important role in                                                                                      by Bosch for an office complex with a total of 50 000 m² in Stuttgart-Feuerbach.
     the take-up of office space in the Stuttgart region. The transition to electromobility                                                                                  A total of 226 contracts were concluded in the period to 31.12.2018, with only five
     and digitization presents the industry with challenges since it often requires spatial                                                                                  transactions in the segment above 5 000 m².
     restructuring or expansion.

                                                                                                                                                                             ONLY INCREASE IN THE MEDIUM-SIZED AREA SEGMENT                                                              VERY FEW MAJOR TRANSACTIONS

                                                                                                                                                                             The total number of contracts concluded declined by 11                                                      Very few major transactions were concluded in 2018. There
     HIGH DEMAND FROM PUBLIC SECTOR USERS                                              DEMAND FROM CONSULTANTS
                                                                                                                                                                             % over the previous year. 149 transactions were recorded                                                    were only five contracts in the segment above 5 000 m², a
                                                                                       RELATIVELY STEADY
     In 2018 industrial companies were once again the sector                                                                                                                 for the small area segment up to 500 m² in comparison                                                       further decline over the previous year. Total take-up in this
     with the highest demand, with a take-up of some 76 000                            Demand from “Consultants” was slightly lower than in the                              to 165 contracts in 2017. The most significant decline                                                      segment was 83 000 m². The three largest transactions were
     m², of which 82 % was in the automotive industry. Although                        previous year, with letting contracts concluded for some                              was for the 1 001 to 2 000 m² segment, with 54 % fewer                                                      the Bosch development project in Stuttgart-Feuerbach,
     take-up by industry remains high in comparison to other                          20 100 m², while tenants in the “Media/Communications”                                 contracts concluded than in the previous year while take-up                                                 which accounted for 50 000 m² alone, and the two contracts
     sectors, its demand has, however, decreased significantly                         sector accounted for a total of approx. 11 800 m². A                                  decreased by a huge 60 % to a mere 21 900 m². In contrast,                                                  concluded by the State of Baden-Württemberg for 10 800 m²
     in recent years. While in 2016 take-up by industrial                              significant decrease in demand from users in the “Education                           the 2,001 to 5 000 m² segment saw an increase of over                                                       in the city centre and 8 800 m² in Leinfelden-Echterdingen.
     companies was approx. 199 000 m², in 2017 it was only                             and Health Care” sector was recorded, above all from training                         50 % in the number of transactions, with take-up almost                                                    The principle reason for this negative development is the
     around 109 000 m². The second most important sector was                           companies, who are experiencing serious difficulties finding                          doubling in comparison to 2017, to some 46 400 m².                                                          scarcity of space, which is now affecting all size segments
     Public Organizations, with some 30 700 m² of office space                         suitable premises due to the tight market in conjunction                                                                                                                                          and means that tenants have virtually no choice of
     let. Two large transactions played a major role in this – an                      with their specific structural requirements. Only around 2                                                                                                                                        properties.
     owner-occupier contract for a property with approx. 10 800                        900 m² of space was rented by “Financial services” providers.
     m² space at Kriegsbergstrasse 32 in the central business                         The remaining take-up was wide-ranging, with the “Other
     district and a letting contract in Leinfelden-Echterdingen for                    office users” sector, which includes architects, engineers
     around 8 800 m². Demand from IT companies also remains                            and trading companies, accounting for approx. 20 % of total
                                                                                                                                                                             COMPARISON OF CONTRACTS BY SIZE                                                                                      COMPARISON OF CONTRACTS BY NUMBER
     stable, with this sector accounting for some 22 600 m² or 10                      take-up.
     % of total take-up.

                                                                                                                                                                                         Total figure in 2017: 270 000 m2                                                                                 Total figure 2017: 254
                                                                                                                                                                                         Total figure in 2018: 218 000 m             2
                                                                                                                                                                                                                                                                                                          Total figure 2018: 226

     TAKE-UP BY SECTOR IN %

                                                                                                                                                                                                                                                           120 300
     34.9 % Energy/Industry

                                                                                                                                                                                                                                                                     83 000

                                                                                                                                                                                                                                                                                                  165
     19.8 % Others

                                                                                                                                                                                                                   54 900

                                                                                                                                                                                                                                                                                                        149
     14.1%   Public sector

                                                                                                                                                                                                                                              46 400
                                                                                                                                                                             39 000
                                                                                                                                                                                      37 100

                                                                                                                                                                                                 31 400
     10.4 % IT/Telecommunications

                                                                                                                                                                                                          29 600

                                                                                                                                                                                                                                     23 600
                                                                                                                                                                                                                            21 900

                                                                                                                                                                                                                                                                                                                          42
     9.2 %   Consultants

                                                                                                                                                                                                                                                                                                                     39

                                                                                                                                                                                                                                                                                                                                    35

                                                                                                                                                                                                                                                                                                                                                         14
                                                                                                                                                                                                                                                                                                                                         16
     5.4 %   Media/Communication

                                                                                                                                                                                                                                                                                                                                                                     9
                                                                                                                                                                                                                                                                                                                                                                          5
                                                                                                                                                                                                                                                                                                                                                    6
     4.9 %   Education/Health care
                                                                                                                                                                             ≤ 500 m2          501 – 1 000 m2 1 001 – 2 000 m2 2 001 – 5 000 m2           > 5 000 m2                              ≤ 500 m2        501 – 1 000 m2 1 001 – 2 000 m2 2 001 – 5 000 m2   > 5 000 m2
     1.3 %   Financial services
                                                                                           Source of diagram: Research E & G Real Estate GmbH ©, current as of: 31.12.2018                                                                                                                 Source of diagrams: Research E & G Real Estate GmbH ©, current as of: 31.12.2018

                                               ST U T TG A R T | 2 0 1 8 / 2 0 19 O F F I C E M A R K E T R E P O R T                                                                                                                            ST U T TG A R T | 2 0 1 8 / 2 0 19 O F F I C E M A R K E T R E P O R T
STUTTGART - ATTRACTIVE LOCATION FOR INNOVITION - The 2018/2019 Stuttgart office market report - German Property Partners
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                                                          D E V E LO PM E N TS I N 2018/2019

          Prime rents                                                                                                                                  STUTTGART CENTRAL BUSINESS DISTRICT PRIME AND AVERAGE RENTS FROM 2008 TO 2018 IN € / M²

          falling due to lack of newly constructed space
     The prime rent in Stuttgart as of 31.12.2018 was € 23.00/m² and thus 5.4 % lower than

                                                                                                                                                                                                                                                                                                                    24.30
     in the previous year. It is currently at the same level as in 2016. The average for the entire

                                                                                                                                                                                                                                                                                                     23.00

                                                                                                                                                                                                                                                                                                                                  23.00
                                                                                                                                                                                                                                                                                          22.80
     urban area including Leinfelden-Echterdingen was around € 13.90/m², representing a slight

                                                                                                                                                                                                                                                                       21.50
                                                                                                                                                                                                                                   20.00

                                                                                                                                                                                                                                                      20.00
     increase of 1.4 % over 2016.

                                                                                                                                                                                                                18.80
                                                                                                                                                                    18.00

                                                                                                                                                                                  18.00

                                                                                                                                                                                                     17.50
     HARDLY ANY HIGH-END SPACES                                                        DEVELOPMENT OF RENTS IN THE OUTLYING DISTRICTS                                                                                                       PRIME RENTS

                                                                                                                                                                                                                                                                                                                    18.50

                                                                                                                                                                                                                                                                                                                                  18.20
                                                                                                                                                                                                                                                                                                     16.20
     IN STUTTGART’S CENTRAL BUSINESS DISTRICT

                                                                                                                                                                                                                                                                                          15.90
                                                                                       At € 16.50/m² prime rents in the south of Stuttgart remained

                                                                                                                                                                                                                                                                       15.30
                                                                                                                                                                                                                                   14.50

                                                                                                                                                                                                                                                      14.40
                                                                                                                                                                    14.50

                                                                                                                                                                                                                14.30
                                                                                                                                                                                                     14.30
     In 2018 rental prices developed in line with market                               at the same level as in the previous year, due to lettings

                                                                                                                                                                                  13.60
     conditions. A fall in prime rents was foreseeable due to                          for new-build projects “VISION ONE” in Leinfelden-
     the low number of newly completed buildings in the last                           Echterdingen and “Neo” in Stuttgart-Vaihingen. The average
     two years. The lack of newly constructed space and thus                           rent in the area was € 13.00/m². In the northern fringe                                                                                             AVERAGE RENTS

     small number of rental contracts concluded in the high-end                        areas a prime rent of € 13.00/m² was achieved – a slight
     segment caused the prime rent to decrease from € 24.30/m²                         fall over the previous year caused by the fact that, with             2008               2009              2010       2011            2012              2013                2014                2015       2016           2017         2018
     in 2017 to € 23.00/m² in 2018. The continuing moderate rise                       the exception of one contract concluded for over € 19.00/
     in average rents can be attributed to the ongoing scarcity of                     m² for the “MAYOFFICE” new-build project, letting contracts
     existing space. Increases in rents, in some cases significant,                    were exclusively for existing buildings and for rental prices
     could only be achieved for new lettings of such properties                        ranging from € 9.50 to € 13.00/m². Further lettings for the
     by carrying out renovation and modernization measures. Of                        “MAYOFFICE” project and planned new-build projects “leo
     the total 62 contracts concluded in the CBD 13 were in the                        Business Campus Stuttgart” in the Löwentor area und
     rental price segment € 15.01 to € 17.00/m² and 29 contracts                      “urbanic” in Zuffenhausen are expected to result in an
     (previous year: 41) were in the segment over € 17.01/m².                          increase in prime rents in the outlying northern districts
     The majority of the 46 contracts signed for properties in the                     as early as the coming year. Progressive development of         PRIME AND AVERAGE RENTS IN 2018 IN € / M2
     city centre were in the segment € 11.01 to € 15.00/m².                            the Neckarpark area has already led to a significant rise in
                                                                                       prime rents in the outlying eastern districts to € 15.90/m².
                                                                                      The majority of letting contracts concluded in the outlying
                                                                                       districts were, however, generated in the price segment €
                                                                                                                                                                                                                                                                                                             Ø for the entire city: 13.90
                                                                                      10.01 to € 12.00/m², with 63 contracts signed for total take-                                                                                                                                                                         (2017: 13.75)
                                                                                       up of some 90 000 m².

                                                                                                                                                                                                                                                                                                                  Prime rents

                                                                                                                                                            23.00

                                                                                                                                                                        18.20

                                                                                                                                                                                          17.00

                                                                                                                                                                                                   11.90

                                                                                                                                                                                                                 13.00

                                                                                                                                                                                                                           11.70

                                                                                                                                                                                                                                              15.90

                                                                                                                                                                                                                                                          13.70

                                                                                                                                                                                                                                                                               16.50

                                                                                                                                                                                                                                                                                        13.00
                                                                                                                                                                                                                                                                                                                   Average rent

                                                                                                                                                       Central business
                                                                                                                                                                                          City centre        Outlying districts Outlying districts Outlying districts
                                                                                                                                                           district
                                                                                                                                                                                                               to the north       to the east        to the south

                                                                                                                                                                                                                                                              Source of diagrams: Research E & G Real Estate GmbH ©, current as of: 31.12.2018

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STUTTGART - ATTRACTIVE LOCATION FOR INNOVITION - The 2018/2019 Stuttgart office market report - German Property Partners
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                                                                                     D E V E LO PM E N TS I N 2018/2019

     COMPLETION VOLUME IN STUTTGART IN M2                                                                                                                                                                                                 Limited offering
                                                                                                                                                                                                                                          for office users
          Completion of building                                                                                                                                                                                                     The vacancy rate to 31.12.2018 was approx. 2.3 %. With total existing space of 7.946

                                                                                                                            149 200
                                                                                                                                                                                                                                     million m² this represented an offering of some 186 000 m², an increase of around 11.4

                                                                                                                                                    128 600
                                                                                                                                      119 300

                                                                                                                                                              110 500
          Pre-let                                                                                                                                                                                                                    % over the previous year. The market has, however, by no means eased.

                                                                                                                                                                        92 800

                                                                                                                                                                                             89 700*
                                                                                                        81 900
                                                                 81 200

                                                                                                                                                                                                                 78 800*
                                                                                      72 500

                                                                                                                 69 500

                                                                                                                                                                                                       64 300*
                                                                                                                                                                                                                                     VARYING DEVELOPMENT IN THE SUBMARKETS                                              SPACE REMAINS SCARCE IN THE
                                                                          62 700

                                                                                                                                                                                                                                                                                                                        CENTRAL BUSINESS DISTRICT

                                                                                                                                                                                 47 500
                                                                                                                                                                                                                                     The space available at Fasanenhof Industrial Park increased
                             45 000
           42 000

                                      41 200

                                               37 000

                                                                                                                                                                                                                                     significantly over 2017. This was due, on the one hand,                           The amount of space available in the central business
                                                        36 300

                                                                                               33 600
                    23 200

                                                                                                                                                                                                                                     to completion of the first phase of construction at the                            district remains virtually unchanged and is thus scarce.

                                                                                                                                                                                                                           16.200*
                                                                                                                                                                                                                                     “Fasanenhof Office Campus” and, on the other, to larger                            In the meantime rental contracts have been signed for
                                                                                                                                                                                                                                     existing spaces at the business park becoming vacant. The                          the last available units at new-build developments the
                                                                                                                                                                                                                                     offering in Stuttgart-Degerloch also increased over the                           “Lautenschlager-Areal“ and “Theo 9”; both are thus now
            2010              2011              2012              2013                 2014              2015                 2016                    2017                2018                  2019                2020
                                                                                                                                                                                                                                     previous year due to a large rental space becoming vacant. In                      fully let. The entire Eberhardhöfe complex has already
                                                                                                                                                                                          * Planed completion and/or pre-letting
                                                                                                                                                                                                                                     addition to this, the space available in Stuttgart-Feuerbach/                      been fully let to co-working provider Design Offices prior
                                                                                                                                                                                                                                     Stuttgart-Zuffenhausen and the city centre also increased                          to completion.
                                                                                                                                                                                                                                     slightly, however in all cases only because existing spaces
                                                                                                                                                                                                                                     became available for new tenants. Negative development                             Since the coming three years will see virtually no newly
                                                                                                                                                                                                                                     was recorded for the outlying submarkets of Weilimdorf                             constructed space come onto the market in the central
     VACANT SPACE AS OF 31.12.2018 AND PERCENTAGE CHANGE OVER 2017
                                                                                                                                                                                                                                     (approx. -24.6 %) and Leinfelden-Echterdingen (some -39.0                          business district and city centre Stuttgart’s outlying districts
                                                                                                                                                                                                                                     %). In the latter location it was, however, possible to achieve                    remain the only option for companies seeking large rental
                                                                                                                                                                                                                                     full letting of an existing building, parts of which had                           spaces. In addition to this, a contract is about to be signed
        Area                                                                                                              Vacant space                                           Percentage change over 2017
                                                                                                                                                                                                                                     been vacant for some time, by concluding contracts with                            with a tenant for the “LOOK 21” building, which has some

        Fasanenhof                                                                                                           27 600 m2                                                                                 + 84.0 %      new tenants and extending contracts with existing ones.                           10 000 m² total space and is nearing completion, meaning
                                                                                                                                                                                                                                     Furthermore, the State of Baden-Württemberg leased some                            that it is also no longer on the market.
        Stuttgarter City centre                                                                                              27 400 m2                                                                                 + 25.1 %
                                                                                                                                                                                                                                     8 800 m² in a neighbouring property.
        Möhringen                                                                                                            23 000 m           2
                                                                                                                                                                                                                       − 10.9 %

        Stuttgart Central business district                                                                                  21 300 m2                                                                                     − 3.2 %

        Bad Cannstatt, Wangen, Hedelfingen                                                                                   20 800 m2                                                                                 + 56.4 %

        Degerloch                                                                                                            17 500 m2                                                                                 + 38.9 %

        Vaihingen                                                                                                            15 300 m2                                                                                     − 1.3 %

        Leinfelden-Echterdingen                                                                                              12 300 m2                                                                                 − 35.3 %

        Feuerbach, Zuffenhausen                                                                                              11 600 m2                                                                                 + 23.4 %

        Weilimdorf                                                                                                              9 200 m2                                                                               − 24.6 %

                                                                                         Total vacant space: 186 000 m2

                                                                                                                          Source of diagrams: Research $ & G Real Estate GmbH ©, current as of: 31.12.2018

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                                                          D E V E LO PM E N TS I N 2018/2019

          Solid take-up in the                                                                                                                           COMPARISON OF VACANCY RATES IN GERMANY IN %

          Top 7 locations                                                                                                                                      2012                      2013                      2014                           2015                2016                            2017                      2018

                                                                                                                                                                                                                                                                                         13.9
                                                                                                                                                                                                                                                                                        13.8
     Take-up in Germany’s Top 7 locations (Berlin, Düsseldorf, Frankfurt a. M., Hamburg,

                                                                                                                                                                                                                                                                                      12.5
                                                                                                                                                                                                                                                                                    11.8
                                                                                                                                                                                                                            11.6

                                                                                                                                                                                                                                                                                   11.7
     Cologne, Munich and Stuttgart) to 31.12.2018 totalled approx. 3.8 million m². Vacancy

                                                                                                                                                                                                                           10.9
                                                                                                                                                                                                                          10.9
                                                                                                                                                                                                                          10.4
                                                                                                                                                                                                                        9.8

                                                                                                                                                                                                                                                                                                      8.7
                                                                                                                                                                                                                      8.4
     rates in all locations were at an all-time low.

                                                                                                                                                                                                                                                             7.6
                                                                                                                                                                                                                   7.6

                                                                                                                                                                                                                                                                                                                                                   6.8
                                                                                                                                                                   7.4

                                                                                                                                                                                                                                                            7.4

                                                                                                                                                                                                                                                                                                        7,4
                                                                                                                                                                  7.0

                                                                                                                                                                                                                                                           6.9

                                                                                                                                                                                                                                                                                                                                                 6.3
                                                                                                                                                                                                                                                                                                                                                5.8
                                                                                                                                                                6.0

                                                                                                                                                                                         5.9

                                                                                                                                                                                                                                                         5.7
                                                                                                                                                                                        5.3

                                                                                                                                                                                                                                                                                                                      5.4
                                                                                                                                                              5.2
                                                                                                                                                             5.1

                                                                                                                                                                                                                                                       5.1

                                                                                                                                                                                                                                                                                                                     4.9
                                                                                                                                                                                      4.8
                                                                                                                                                                                     4.3

                                                                                                                                                                                                                                                                                                                    4.3

                                                                                                                                                                                                                                                                                                                                                                      4.0
                                                                                                                                                           4.3

                                                                                                                                                                                                                                                                                                                                                                     3.7
                                                                                                                                                                                    3.7
                                                                                                                                                          3.5

                                                                                                                                                                                                                                                    3.6

                                                                                                                                                                                                                                                                                                                  3.5
                                                                                                                                                                                                                                                   2.6

                                                                                                                                                                                                                                                                                                                2.8

                                                                                                                                                                                                                                                                                                                                                                  2.5
                                                                                                                                                                                 2.2

                                                                                                                                                                                                                                                                                                              2.3
     MUNICH CLEARLY AHEAD OF BERLIN                                                    VACANCIES REACH A NEW ALL-TIME LOW

                                                                                                                                                                               1.8

                                                                                                                                                                                                                                                                                                              2.1

                                                                                                                                                                                                                                                                                                                                                                1.8
     At 940 000 m² Munich’s office market was the front runner                         Existing office space including sublet space in the Top 7
                                                                                                                                                              Hamburg                      Berlin                    Dusseldorf                          Cologne                     Frankfurt a. M.                       Stuttgart                   Munich
     for take-up in 2017 and thus 7 % above the previous year’s                        locations currently totals 90.90 million m², while the volume
     performance. Numerous major transactions contributed to                           of vacant space has declined to 3.05 million m², equating to                                                                                                                                                                                                              Munich

                                                                                                                                                                                                                                                                                                                                                      940 000
     this record-breaking figure, including 38 000 m² of space                         a vacancy rate of some 3.4 %. In both Munich and Berlin the       TOP 7 TAKE-UP FROM 2008 TO 2018 IN %
     let to a financial services provider in the “Campus One”                          amount of space available was at an all-time low, with a

                                                                                                                                                                                                                                                                                                                                    877 000
     building. In Berlin over 770 000 m² of office space was let,                      vacancy rate of just 1.8 %. Stuttgart also had a continuingly

                                                                                                                                                                                                                     853 000

                                                                                                                                                                                                                                                                                                                 764 000
                                                                                                                                                                 765 000
     representing a decline of 14 % over 2017. The largest letting                     extremely low vacancy rate of 2.3 %, followed by Cologne at                                                                                                                                                                                                               Berlin

                                                                                                                                                                                                                                                                                            755 000
                                                                                                                                                                                                                                        716 700
     contract was signed by Vattenfall, for some 29 000 m².                           2.6 %, while in Hamburg the offering also declined, resulting

                                                                                                                                                                                                  590 000

                                                                                                                                                                                                                                                           608 000

                                                                                                                                                                                                                                                                         583 950
                                                                                                                                                                               540 000
                                                                                                                                                                                                                                                                                                                                                                 Frankfurt a. M.
     Although at around 639 400 m² take-up in Frankfurt was                            in a vacancy rate of 3.5 %. In Düsseldorf the amount of                                                                                                                                                                                                                   Hamburg
     12 % lower than the record-breaking figure for the previous                       vacant space fell to 7.6 %, in Frankfurt to 7.4 %. In the years
     year it was, however, still significantly above the 5-year                       2019/2020 a total space of some 2.23 million m² is expected                                                                                                                                                                                                                Dusseldorf

                                                                                                                                                                                                                                                                                                               432 000
                                                                                                                                                                                                                                                                                                                                                                 Cologne
     average. The largest transaction was the deal concluded                           to be completed in the Top 7 locations. Some 75 % of this

                                                                                                                                                                                                                                                                                            290 000
     with the Commerzbank for 36 100 m² at the “Cielo” building.                       space has, however, already been let, meaning that the

                                                                                                                                                                                                                     285 000

                                                                                                                                                                                                                                                            285 000

                                                                                                                                                                                                                                                                           280 000

                                                                                                                                                                                                                                                                                                                                  270 000

                                                                                                                                                                                                                                                                                                                                                      218 000
                                                                                                                                                                180 000
                                                                                                                                                                                                                                                                                                                                                                 Stuttgart

                                                                                                                                                                                                                                        191 500
                                                                                                                                                                                                   194 000
     Hamburg’s performance – take-up of 590 000 m², just 8 %                           tight market is thus not expected to ease in the foreseeable

                                                                                                                                                                              171 000
     lower than in the previous year - was again strong, while                         future.
     take-up in Düsseldorf declined slightly by 7 % to 334 600                                                                                                2008         2009                 2010               2011            2012                  2013          2014               2015                2016                 2017           2018

     m². In Cologne office take-up was approx. 310 000 m² and
     thus almost the same as in the previous year. Stuttgart,                                                                                            STUTTGART IN COMPARISON TO OTHER GERMAN CITIES
     in contrast, experienced a noticeable decrease of 19 %,
     representing take-up of around 218 000 m².                                                                                                                                                              Take-up in m2                         Prime rent in € / m2                     Average rent in €/m2                              Vacancy rate in %

                                                                                                                                                                                                            2017               2018                  2017               2018                    2017                       2018                2017                   2018
     AVERAGE RENT INCREASES IN ALL LOCATIONS

     The highest prime rents were achieved in Frankfurt (€ 43.50/                                                                                           Hamburg                              640 000                   590 000                   26.00             27.50                    15.20                      15.80                 4.3                      3.5

     m²). Berlin saw its prime rent rise the most, to € 33.50/m²,
                                                                                                                                                            Berlin                               900 000                   770 000                   30.00             33.50                    19.00                      21.30                 2.2                      1.8
     representing an increase of 12 %. The only fall in prime
     rents was in Stuttgart, - 5 % to € 23.00/m². Average rents in                                                                                          Dusseldorf                           358 700                   334 600                   27.00             27.50                    15.35                      16.10                 8.4                      7.6

     Stuttgart (+ 1 %) and Frankfurt (– 1 %) remained relatively                                                                                            Cologne                              310 000                   310 000                   21.50             23.00                    13.70                      15.00                 3.8                      2.6
     stable, while in all other locations they increased over the
                                                                                                                                                            Frankfurt a. M.                      729 100                   639 400                   39.50             43.50                    20.30                      20.00                 8.7                      7.4
     previous year. The highest figure, € 21.30/m², was achieved
     in Berlin, followed by Frankfurt (€ 20.00/m²) and Munich (€                                                                                            Stuttgart                            270 000                   218 000                   24.30             23.00                    13.70                      13.90                 2.1                      2.3
     18.65/m²).
                                                                                                                                                            Munich                               877 600                   940 000                   35.00             36.80                    16.90                      18.65                 2.5                      1.8

                                                                                                                                                                                                                                                                      Source of diagrams: Research $ & G Real Estate GmbH ©, current as of: 31.12.2018

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                                                                                                                                                                           ST U T TG A RT I N D E TA I L

        Stuttgart                                                                                                 Stuttgart central business district/city centre -
        in detail                                                                                                 Locations experiencing shortages
     A continuing need for space but significantly changed requirements                                   Stuttgart’s most attractive areas, the central business district and the city centre, are
     regarding the quality of such space have led to growing demand for                                   experiencing the most precarious conditions. Vacant space is practically non-existent,
     development projects and optimization of buildings.                                                  while new development projects will only come on stream in a few years’ time.

                                                                                                          The first indications that space was becoming scarce were                            pressure on the market, is not expected to be created in the
                                                                                                          already noted in 2017, however, were not taken very                                  near future.
                                                                                                          seriously until the signs became clearer in 2018. The last
                                                                                                          two newly constructed projects in the central business                               In response to the scarcity of the offering in the central
                                                                                                          district   (“Lautenschlager-Areal    Construction          Phase         1”          business district various users have turned their attention
                                                                                                          and “Eberhardhöfe”) have now been completed and fully                                to directly adjacent areas, such as the city centre and
                                                                                                          let. The space which will be created within the scope of                             neighbouring districts. The options there are, however, also
                                                                                                          the second phase of construction at the Lautenschlager-                              very limited, as clearly shown by 2018 letting performance
                                                                                                          Areal complex has also already been fully let, although                              for the entire city centre, which totalled 28 400 m². The 10-
                                                                                                          the project has not yet been completed. At present there                             year average is 59 500 m², illustrating the volume of take-up
                                                                                                          is practically no vacant space available on the market,                              achieved in the past.
                                                                                                          neither for small nor large areas. This scarcity caused
                                                                                                          take-up in 2018 to plummet by 46 %. At 27 000 m² it is                               The “Look 21” building, completed at the end of 2018, will
                                                                                                          now significantly below the 10-year average of 52 500                                have been fully let by the first quarter of 2019. This means
                                                                                                          m², while the situation in 2019 will further intensify as no                         that the closest newly constructed space offerings are
                                                                                                          newly constructed space will be completed in the central                             located further to the north, in the Pragsattel area. Upcoming
                                                                                                          business district. Companies in this area will thus lack the                         development projects in the central business district are not
                                                                                                          manoeuvring space and options required for healthy growth.                           expected to come on stream until 2024.
                                                                                                          New space in the city centre area0 which would relieve

                                                                                                              Central business district       ≤ 500 m2               501 – 1 000 m2                 1 001 – 2 000 m2              2 001 – 5 000 m2   > 5 001 m2

                                                                                                              % share of space                 41 %                          25 %                              8%                      26 %             0%

                                                                                                              m 2
                                                                                                                                               11 234                       6 850                            2 192                     7 124             0

                                                                                                              Ø rental price                                                                             18.20 € / m     2

                                                                                                              Prime rent                                                                                 23.00 € / m2

                                                                                                              City centre                     ≤ 500 m2               501 – 1 000 m2                 1 001 – 2 000 m2              2 001 – 5 000 m2   > 5 001 m2

                                                                                                              % share of space                 32 %                          15 %                             11 %                      0%             42 %

                                                                                                              m 2
                                                                                                                                               9 080                        4 260                            3 124                       0            11 928

                                                                                                              Ø rental price                                                                             11.90 € / m     2

                                                                                                              Prime rent                                                                                 17.00 € / m2

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                                                                  ST U T TG A RT I N D E TA I L

                                                                                                                                                       STUTTGART-WEILIMDORF
          Northern Stuttgart -                                                                                                                                                                                                             Average rents have declined to € 10.30/m², while pressure
                                                                                                                                                       A further decrease in the vacancy rate from 3.2 % to 2.4 %,                         on the market means that the prime rent is € 12.50/m². The
          Supply of offices virtually exhausted                                                                                                        or 9 200 m² of available space, in conjunction with another                         decision by Stuttgart’s tram company to build a new depot
                                                                                                                                                       15-% drop in total letting volume to approx. 18.900 m²                              directly adjacent to the industrial park, which previously
     Although only a small number of newly constructed spaces are currently coming onto
                                                                                                                                                       illustrates the scarcity of vacant office space in Weilimdorf.                      only had an S-Bahn suburban rail link, will be advantageous
     the market in northern Stuttgart, a certain degree of dynamism is apparent in the                                                                 A development project for some 15 000 m² is still at the                            for the area as it will create a new connection to the tram
     Feuerbach, Zuffenhausen and Weilimdorf areas.                                                                                                     preparatory stage, the new space will thus not come on                              network. It is, however, currently unclear when the project
                                                                                                                                                       stream until the 3rd and 4th quarters of 2020 at the earliest.                      will commence.

     STUTTGART-FEUERBACH
                                                                                       The overall appearance of the Pragsattel area is set
     As a district which is strongly characterized by the                               to undergo further significant change following an
     automotive industry, Feuerbach has experienced a decline                           announcement made by Porsche SE in December 2018. The
                                                                                                                                                         Feuerbach/                     ≤ 500 m2               501 – 1 000 m2                 1 001 – 2 000 m2              2 001 – 5 000 m2          > 5 001 m2
     in the number of contracts concluded. Take-up in this                              company plans to construct a new branch with workshops
                                                                                                                                                         Zuffenhausen
     area was dominated by the decision of R. Bosch GmbH to                             on a plot which it owns in direct proximity to the “Skyline”
                                                                                                                                                         % share of space                  1%                           1%                               5%                       0%                      93 %
     construct a new building with 50 000 m² of office space for                        office and residential building. Parallel to this, Bülow AG
                                                                                                                                                         m2                                559                          546                            3 495                       0                     50 000
     its own use on a plot owned by the company in Feuerbach.                           will be building a further high-rise building on its plot –
                                                                                                                                                         Ø rental price                                                                            11.70 € / m2
     As a result, total take-up was 54 600 m², an above-average                         the “Porsche Design Tower”. In addition to office space, the
                                                                                                                                                         Prime rent                                                                                16.00 € / m2
     result. No new buildings were completed in 2018, while the                         layout includes hotel use on the upper floors.
     only building completed in 2017 was for an owner-occupier
                                                                                        STUTTGART-ZUFFENHAUSEN
     and thus had no impact on the development of rents. In the
                                                                                                                                                         Weilimdorf                     ≤ 500 m2               501 – 1 000 m2                 1 001 – 2 000 m2              2 001 – 5 000 m2          > 5 001 m2
     meantime, however, the first letting contracts have been                          Virtually no contracts were concluded in Zuffenhausen in
     completed for the new-build projects, with higher rents and                       2018. Realization of the “urbanic” project on the former          % share of space                 21 %                          7%                               0%                       0%                      72 %

     corresponding upward development of prime rents thus                               Fritz OHG site on the corner of Schwieberdinger Strasse/         m2                               3 234                       1 078                                0                       0                     11 088

     once again expected in the foreseeable future.                                     Lorenzstrasse is expected to commence in 2019. The office        Ø rental price                                                                            10.30 € / m2

                                                                                        campus will provide a total of approx. 2 500 new work            Prime rent                                                                                12.50 € / m2

     Construction of the “MAYOFFICE” building has commenced,                            spaces and comprise several buildings grouped around a
     with the first marketing successes already achieved.                               square. This development project will result in continuation
     Completion of the approx. 8 500 m² building is scheduled                           of the upgrading of the surrounding area which began
     for mid-2020, with almost 50 % of the space already let by                         on Porscheplatz square with the museum and adjacent
     the first quarter of 2019.                                                         buildings. What was originally a logistics site will become
                                                                                        a prime office location. The project comprises some 35 000
     Parallel to this project, the Acom Group is building a hotel on                    m² of office space in total, whose direct proximity to the
     the corner of Heilbronner Strasse/Sieglestrasse. It will have                     S-Bahn train station should be advantageous for marketing.
     160 rooms and should be completed in the 2nd quarter of
     2020.                                                                              Overall, the structural alterations being carried out by
     The “Leitz-Areal” complex, the only project of its size on                         Porsche SE at its works in Zuffenhausen are leading to
     the Stuttgart market offering loft-style spaces, was actually                      significant upgrading of the district, with many of the old
     scheduled to be more or less fully completed in 2018,                              factories already replaced by cutting-edge new buildings
     however sales activities and a new strategy focus for the                          and further projects planned.
     product have caused delays. It is currently assumed that this                                                                                                                                                                                                     MAYOFFICE, Stuttgart-Feuerbach
     office space, totalling around 15 000 m², will be available by
     the second half of 2019 at the latest.
                                                                                                                                                                                                                                                                                               Source: GIEAG Immobilien AG

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                                                                ST U T TG A RT I N D E TA I L

                                                                                                                                                         WANGEN/HEDELFINGEN
          Eastern Stuttgart -
                                                                                                                                                         The lack of new space has meant that the Wangen/                                  Rents in this area are correspondingly low, in the range of €
          A transformation is taking place                                                                                                               Hedelfingen submarket was once again not particularly                             8.00 to € 12.00/m².
                                                                                                                                                         dynamic in 2018. In total only seven contracts for areas up
     The Neckarpark and Löwentor areas in Cannstatt are relieving pressure on the office real
                                                                                                                                                         to 1 000 m² were concluded, of which five were for spaces                        Two development projects could result in changes – one
     estate market, while the lack of new buildings south-east of the River Neckar means that                                                            from 500 to 1000 m². These spaces are, in turn, located in                        is located in the Ulmer Strasse area, the other at the
     little change is taking place in that area.                                                                                                         buildings which were constructed more than 15 years ago.                         “Hammerwerk” site in Obertürkheim. The latter project is
                                                                                                                                                         Contracts for smaller areas were for older properties with                        focusing on the revitalization and modern expansion of
                                                                                                                                                         more basic facilities.                                                            former manufacturing sites to create a loft-style complex.

     BAD CANNSTATT
                                                                                        start soon. In addition to this, possible uses for the Q20 and
     75 % of office take-up in eastern Stuttgart was achieved in                        Q9 plots are now being considered.
                                                                                                                                                           Bad Cannstatt/
     Bad Cannstatt. The area’s 10-year average was also exceeded                                                                                                                        ≤ 500 m2               501 – 1 000 m2                 1 001 – 2 000 m2              2 001 – 5 000 m2          > 5 001 m2
                                                                                                                                                           Wangen/Hedelfingen
     by 10 000 m². The large contiguous spaces in this district                         In the Löwentor area the designs for the buildings which
                                                                                                                                                           % share of space               11 %                         15 %                             16 %                     38 %                    20 %
     have resulted in strong demand from users in the Industry,                         will make up the future “gateway” area have been finalized.
                                                                                                                                                           m  2
                                                                                                                                                                                          3 795                       5 175                            5 520                    13 110                   6 900
     Public Sector and Consultants sectors. As a consequence the                       The first of three structures at the “leo Business Campus
                                                                                                                                                           Ø rental price                                                                          13.70 € / m     2

     vacancy rate is now extremely low, at 2.3 % or 20 000 m² of                       Stuttgart” is scheduled to be fully completed and let by the
                                                                                                                                                           Prime rent                                                                              15.90 € / m2
     space distributed across 65 properties.                                            end of the 2nd quarter of 2019.
                                                                                        Construction of the other buildings directly on the corner of
     Further development projects in the Neckarpark area should,                        Pragstrasse/Löwentorstrasse respectively in Pragstrasse will
     however, ease pressure on the market. The last zoning                              begin during 2019. In total some 16 000 m² of cutting-edge
     plan for the area is expected to come into force during                            office space will be created.
     the first half of 2019, allowing construction of second-row
     residential units behind the commercial buildings which                            DIBAG’s project in Löwentorstrasse, also currently under
     are already underway to begin quickly. In addition to prime                        construction, has now been fully let to two automotive
     office workplaces the projects will also create homes for a                        industry users and should be finished by the end of 2019.
     total of some 2 100 people.
                                                                                        Realization of the “Mahle Future Campus” in the
     DIBAG’s “Q4” and “Q7” office buildings along Daimlerstrasse                        Quellenstrasse/Pragstrasse area, announced some years
     will be finished and occupied by the end of the 2nd quarter of                     ago, has been underway since the fourth quarter of 2018.
     2019, while the “Q1” building, also being developed by DIBAG,                     The old manufacturing buildings in Pragstrasse have been
     is now under construction and scheduled for completion at                          demolished and excavation work for the campus, which
     the end of 2019. The winner of the architectural competition                       covers a total area of approx. 24 000 m², has commenced.
     for the Q8 corner plot (Mercedesstrasse/Daimlerstrasse) has                       The overall project is expected to be completed in 2021.
     now also been selected, with building work expected to

                                                                                                                                                                                                                                 leo Business Campus Stuttgart, Stuttgart-Bad Cannstatt

                                                                                                                                                                                                                                                                                Source: LBBW Immobilien Development GmbH

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                                                         ST U T TG A RT I N D E TA I L

                                                                                                                                                        DEGERLOCH
           Southern Stuttgart -                                                                                                                                                                                                            In total 17 600 m² of space was let in 2018; this figure did
                                                                                                                                                        Once again, in 2018 no increase in take-up could be                                not, however, match the outstanding performance of the
           Dynamic development in some areas                                                                                                            identified in the Degerloch area. Due to the lack of available                     previous year. Results in 2017 were, however, primarily due
                                                                                                                                                        space almost all the contracts concluded were for properties                       to the major transaction concluded by Daimler AG, who
     Overall, the office market situation is most positive in Leinfelden-Echterdingen and
                                                                                                                                                        at Tränke Industrial Park, with only one transaction for                           plans to build a new “Daimler Trucks Campus” in Leinfelden-
     Stuttgart-Vaihingen. In addition to this, the “VISION ONE” and “NEO” development                                                                   space in the Albplatz area. Most of the space which is still                       Unteraichen, scheduled for completion in 2021. The vacancy
     projects are contributing to the upgrading of these districts.                                                                                     available, some 17 500 m², is primarily in properties in the                       rate in the Leinfelden-Echterdingen area is currently only
                                                                                                                                                        Tränke area. Even in this district properties which do not                        2.6 % or approx. 12 300 m², distributed across numerous
                                                                                                                                                        come up to current standards or have other defects will                            small spaces and thus offering only limited marketing
                                                                                                                                                        remain vacant for a longer period of time.                                         opportunities. Modern office spaces will not be available
                                                                                                                                                                                                                                           in Echterdingen until the “VISION ONE” project has been
                                                                                                                                                        For years now the area around Albplatz square has been                             completed.
                                                                                                                                                        considered interesting due its attractive infrastructure,
                                                                                                                                                                                                                                           FASANENHOF
                                                                                                                                                        however has virtually no space on offer. The departure of a
                                                                                                                                                        major user should mean that larger areas come back onto                           The Fasanenhof district is making steady progress. Both
                                                                                                                                                        the market by 2022 at the latest. A further development                            the GFT AG start-up incubator and the co-working concept
                                                                                                                                                        project directly on Albplatz will also increase the office                         established by Design Office in the area have contributed to
                                                                                                                                                        spacing offering, however this space is also not expected to                       its upturn. The first construction phase of the extension of
                                                                                                                                                        come on stream before 2021/2022.                                                   the U6 light rail transit line to the airport is planned for 2019
                                                                                                    VISION ONE, Leinfelden-Echterdingen
                                                                                                                                                                                                                                           and should be completed in 2021.
                                                                                                                                                        LEINFELDEN-ECHTERDINGEN

                                                                                                                                     Source: Bülow AG   As in other locations, the space available in the Leinfelden-                     The “Bürocampus Fasanenhof” office complex, which has
                                                                                                                                                        Echterdingen district has also decreased significantly. The                        been under construction since the 4th quarter of 2017,
                                                                                                                                                        same applies for Stuttgart Airport, which is included                              will have been completed and fully let in 2019. A further
       Degerloch            ≤ 500 m2               501 – 1 000 m2                 1 001 – 2 000 m2              2 001 – 5 000 m2   > 5 001 m2
                                                                                                                                                        in the Leinfelden-Echterdingen market. In Leinfelden-                              building phase has been prepared and can begin in the near
       % share of space      33 %                          67 %                              0%                       0%              0%                Unteraichen’s Fasanenweg area large areas of the former                            future, while a small, newly-built office building on the site,
       m 2
                             1 056                        2 144                                0                       0                0               Telekom site, which has been vacant for some time, have                            which has some 3 800 m² of space, has also been almost
       Ø rental price                                                                  12.00 € / m     2
                                                                                                                                                        been re-let, while an existing tenant has expanded his                             fully let.
       Prime rent                                                                      13.00 € / m     2
                                                                                                                                                        premises. Bülow AG’s “VISION ONE” project in Dieselstrasse
                                                                                                                                                        in Echterdingen, which commenced in 2018, has also                                 Both the number of letting contracts concluded and also the

                            ≤ 500 m2               501 – 1 000 m2                 1 001 – 2 000 m2              2 001 – 5 000 m2   > 5 001 m2
                                                                                                                                                        achieved initial letting successes, winning a tenant from                          corresponding volume of space have decreased. At approx.
       Fasanenhof
                                                                                                                                                        the IT sector. In total the office campus will comprise three                      6 700 m² letting performance was well below the 10-year
       % share of space      58 %                          22 %                             20 %                      0%              0%
                                                                                                                                                        buildings with a total area of some 26 000 m². The “VISION                         average of 10 800 m². Only one of the contracts signed was
       m2                    3 886                        1 474                            1 340                       0                0
                                                                                                                                                        ONE” complex is a further element in the remodelling of                            for space over 1 000 m²; all others were for smaller areas.
       Ø rental price                                                                  11.60 € / m2                                                     the industrial park in northern Echterdingen, which has                            At 12.0 % the vacancy rate is significantly higher than that
       Prime rent                                                                      14.50 € / m2
                                                                                                                                                        been underway for some years now. Completion of the new                            for other areas of Stuttgart, which can be attributed to the
                                                                                                                                                        REWE premises directly on the main B 27 road, near to the                          age of the existing buildings and the refurbishment work
       Leinfelden-          ≤ 500 m2               501 – 1 000 m2                 1 001 – 2 000 m2              2 001 – 5 000 m2   > 5 001 m2           A 8 motorway exit, and parallel development of the area                            which this requires. Owners should take advantage of the
       Echterdingen
                                                                                                                                                        on the opposite side of the road have resulted in long-term                        present situation and carry out any required revitalization/
       % share of space       9%                            6%                               7%                      23 %            55 %
                                                                                                                                                        upgrading of the park’s last remaining older area.                                 new construction projects now.
       m2                    1 584                        1 056                            1 232                     4 048           9 680

       Ø rental price                                                                  13.50 € / m2
       Prime rent                                                                      14.50 € / m2

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                                                                   ST U T TG A RT I N D E TA I L

     VAIHINGEN/MÖHRINGEN
                                                                                                                                                                 The Stuttgart office market -
     Most of the shell of Daimler AG’s new building has been                             located near the Daimler Campus in Möhringen, comes on
     completed and should, as planned, be ready for handover                             stream. An architectural competition for the project was
                                                                                                                                                                 Take-up in 2018
     to the users in 2020/2021. The second major project, Allianz                        initiated in 2018.
     AG’s new building, is still at the preparatory stage, with
     construction scheduled to commence at the end of 2020.                              While take-up in Vaihingen/Möhringen in 2018 was not
                                                                                                                                                                         ≤ 10 000 m2
                                                                                         able to match that of previous years, at 26 the number of
     The first letting contract for the “Neo” office project in                          transactions is by far the highest achieved by an outlying                         10 001 to 20 000 m2

     Ruppmannstrasse, which comprises an area of approx. 17                              submarket. Contracts were evenly distributed across all
                                                                                                                                                                            20 001 to 30 000 m2
     700 m² and was speculatively started in the 2nd quarter                             size segments, confirming the widespread interest in this
                                                                                                                                                                                                                                   Trend
     of 2018, has been signed. The tenant is a well-known                                district. Clear variations in rents are due to proximity to the                    30 001 to 40 000 m2                                    Heilbronn

     gym operator, who will be opening a 1 700-m² branch.                                S-Bahn suburban railway line. Those areas of Möhringen                             Above 40 001 m2                                 A 81
     Completion of the project is scheduled for the 4th quarter of                       which are only connected to the tram network and have
                                                                                                                                                                            Industrial/ office locations
     2019. Pressure on the market means that full letting of the                         a less pronounced service industry character must thus be
     project can be expected prior to this date. A further project                       defined as somewhat weaker overall.
     for some 3 500 m², located in the Kupferstrasse, should                                                                                                                                                                       STAMMHEIM
                                                                                                                                                                                                                                                                                MÜHLHAUSEN
     begin at the end of 2019, while it should be possible to                            A range of construction measures currently taking place
                                                                                                                                                                                                                                            ZUFFENHAUSEN
     re-let most of the space in the two buildings which have                            in the area between Vaihingen and Möhringen will
     become vacant on the Daimler Campus in Möhringen to                                 change its appearance significantly. Full connection of
                                                                                                                                                                                                                                                                          MÜNSTER
     users in the creative and automotive sectors.                                       Breitwiesenstrasse to the key Nord-Süd-Strasse road                                          A 81

                                                                                         transport artery is scheduled to be completed in the 3rd
                                                                                                                                                                       Richtung                     WEILIMDORF
                                                                                                                                                                                                                                                                  BAD CANNSTATT
     It is expected that demand for larger spaces in mint                                quarter of 2019. In addition to this, the City of Stuttgart’s                 Singen
                                                                                                                                                                                                                            FEUERBACH

     condition in the district can only be satisfied in a few years’                     twin budget for 2018/2019 includes modification of
     time, when a further development project comprising two                             Nord-Süd-Strasse to meet future traffic requirements,                                                                                             S-NORD

     office towers and a total area of 50 000 m² total floor area,                       with corresponding planning work already initiated.                                                                                                                                                        UNTERTÜRKHEIM
                                                                                                                                                                                                                                                                         S-OST
                                                                                                                                                                                                             BOTNANG
                                                                                                                                                                                                                                                      S-MITTE
                                                                                                                                                                                                                                                                                                         OBERTÜRKHEIM
                                                                                                                                                                                                   S-WEST                                                                                 WANGEN

       Vaihingen/Möhringen/           ≤ 500 m2               501 – 1 000 m2                 1 001 – 2 000 m2              2 001 – 5 000 m2   > 5 001 m2                                                                                              S-SÜD
       STEP                                                                                                                                                                                                                                                                                HEDELFINGEN

       % share of space                  10 %                        19 %                             11 %                     40 %            20 %
                                                                                                                                                           Richtung
       m2                               3 020                       5 738                            3 322                    12 080           6 040       Karlsruhe                                                                                                        SILLENBUCH
                                                                                                                                                                                            VAIHINGEN
       Ø rental price                                                Vaihingen: 12.80 € / m , Möhringen: 11.70 € / m
                                                                                                       2                           2
                                                                                                                                                                                                                                                    DEGERLOCH
                                                                                                                                                                       A8
       Prime rent                                                    Vaihingen: 15.50 € / m2, Möhringen: 12.50 € / m2                                                                                                     MÖHRINGEN

                                                                                                                                                                                                                                                               BIRKACH
                                                                                                                                                                                    Kreuz
                                                                                                                                                                             A 81   Stuttgart
                                                                                                                                                                                                                              FASANENHOF

                                                                                                                                                                                                                                                               PLIENINGEN

                                                                                                                                                                                                                                                                                                   A8    Richtung
                                                                                                                                                                                                             LEINFELDEN-
                                                                                                                                                                                                                                                                                                         München
                                                                                                                                                                                                            ECHTERDINGEN

                                                                                                                                                                                                                                                                                       FLUGHAFEN
                                                                                                                                                                                                                                                                                       STUTTGART
                                                                                                                                                                                                                                                              MESSE
                                                                                                                                                                                                                                                            STUTTGART

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