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The rental volume in 2010 exceeded all our expectations. New leases were signed for 194,000 square metres, a gain of 14 percent over the previous year. The only year with a better turnover was 1999. Thus, after a period of ups and downs, conditions look better than ever for a positive future. Everyone in the market should take advantage of this opportunity to enhance Stuttgart’s attractiveness and in this way ensure its future competitiveness.

Below you will find the PDF-Download of this year's office market report, which we have carefully revised to present these encouraging facts and figures in an attractive format.

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  2. 2. Overview Of the Stuttgart Office market Year Volume Representative Average central Vacancies Vacancies Total space Completion Pre-leased (sq. m) peak rents business district (sq. m) (%) available volume (sq. m) volume (sq. m) rents (mill. sq. m) 1993 140,000 €16.36 €14.50 160,000 2.80 5.609 345,000 No data 1994 120,000 €14.83 €13.60 225,000 4.00 5.926 317,000 No data 1995 120,000 €14.32 €13.35 190,000 3.30 6.056 130,000 No data 1996 135,000 €14.32 €12.75 290,000 4.90 6.108 52,000 No data 1997 140,000 €14.83 €12.65 270,000 4.50 6.231 123,000 No data 1998 180,000 €15.08 €13.85 186,000 2.80 6.266 35,000 No data 1999 230,000 €15.85 €14.80 118,000 1.80 6.296 39,000 No data 2000 205,000 €16.87 €14.90 100,000 1.50 6.356 60,000 No data 2001 160,000 €18.41 €15.34 137,000 2.00 6.516 160,000 130,000 2002 127,000 €17.89 €14.80 292,000 4.20 6.828 312,000 220,000 2003 149,000 €17.50 €14.50 379,000 5.30 6.973 145,000 80,000 2004 152,000 €17.00 €14.50 415,000 5.70 7.102 129,000 93,500 2005 145,000 €17.00 €13.50 402,000 5.60 7.170 68,500 51,400 2006 140,000 €17.50 €13.50 467,400 6.50 7.222* 52,500 20,500 2007 169,000 €17.50 €14.50 466,000 6.40 7.253 32,600 23,400 2008 180,000 €18.00 €14.50 460,000 6.20 7.367 117,000 116,000 2009 171,000 €18.00 €13.60 453,000 6.12 7.401 40,000 22,000 2010 194,000 €17.50 €14.30 480,000 6.46 7.425 42,400 22,400* Data from a survey by BulwienGesa AG + Baasner, Möller & Langwald GmbH Source: Research BANKHAUS ELLWANGER & GEIGER KG ©, figures as of 31 December 2010
  3. 3. Stuttgart 21 ( Site Section a 1) Office + retail + residential for details see page 9LO O K 2 1 Phönixba uTürlen-/HeilbronnerstrasseOffice + retail + residential Königstrasse 5To be completed at unknown date Office Po s tq uar tier completed in 2008 Lautenschlagerstrasse 17 Office + retail To be completed in 2011 C i t y G at e Kriegsbergstrasse 11 Office + retail To be completed at unknown date Mo tel o N e Lautenschlagerstrasse 14 Bü l ow ca rré Hotel Lautenschlagerstrasse 20 To be completed in 2011 Office + retail To be completed in 2012 Qu a d r at Büchsenstrasse 26a Office + retail completed in 2011 W indoW ‘s Theodor-Heuss-Strasse 7 Office + retail P o st o ‘s completed in 2009 Alte Poststrasse Office + retail gallio n haus completed in 20 Theodor-Heuss-Strasse 8 The o 10 h os p i ta l h o f Office + retail Theodor-Heuss-Strasse 10 Büchsenstrasse completed in 2011 Office + retail Office To be completed in 2011 To be completed in 2013 Ca sa Nova Paulinenstrasse 41 Office To be completed in 2011 Source: Manfred Storck
  4. 4. D a V in ci Office + retail To be completed at unknown date3–5009 E 65 Eberhardstrasse 65 Office + retail To be completed in 2013 Qu a r t i e r S Office + retail + residential To be completed in 2013 Paulin e Paulinenstrasse Office To be completed at unknown date Ca l e ido Tübinger Strasse Office + retail To be completed at unknown date
  5. 5. 4 5CONTENTSForeword 6Stuttgart – well prepared for the future 8Stuttgart 21 is on its way 9Rental take-up exceeds all expectations 10Take-up by sectors 12Take-up by size of premises 13Rent prices show a small decline 14Slight increase in vacant office space 16Upturn in the office market throughout Germany 18Central Stuttgart: Big potential for new growth 20Northern Stuttgart: New concepts needed 21Eastern Stuttgart: In a waiting position 22Southern Stuttgart: Positive development continues 23Overview of the Stuttgart office market 25Forecast: Upsurge in Stuttgart’s office market 27Your contacts 28EllwaNGER & GEIGER Real Estate 29
  6. 6. FOREwORdStuttgart – looking to the future.Stuttgart is a city of innovations and ideas: a city in motion.In terms of investment, productivity, services, recreation and urban development, Stuttgart is oneof the most active and attractive cities in Europe.The global economic crisis has been largely overcome. The companies in Stuttgart now havewell-filled order books, their products are in high demand throughout the world and more jobs areavailable. Stuttgart today has some 17,000 enterprises in a wide range of sectors. Together theyemploy almost 350,000 people and generate gross value added of approximately 31 billion euros.In the last three years, in spite of the economic crisis, employment has increased by about 1 percent.This is an encouraging state of affairs, and it is the result of a municipal economic policy that haspursued clear goals over many years and proved to be reliable. The city must continue on this pathto be fit for the future. we recently completed a study of the goals that Stuttgart should focus on inthe coming years. Taking the city’s existing business strength into account, we identified three are-as that need promotion: sustainable mobility, education and tourism. Through strong growth inthese promising areas, up to 18,600 new jobs could be created by 2020.we would like to thank EllwaNGER & GEIGER Privatbankiers for their many years of excellent co-operation and for their continuation of the public-private partnership that has made it possible toproduce a new edition of this publication.This issue of the Stuttgart Office Market provides you with detailed information on trends in thispart of the property market. we invite you to participate actively in its development.dr. wolfgang Schuster Ines aufrechtMayor of Stuttgart director of Business development, Stuttgart
  7. 7. 6 7thiS city offerS excellent opportunitieS. let uS take advantage of them.In 2010, Germany’s seven most important property markets had a total turnover volume ofapproximately 2.74 million square metres, thus exceeding the previous year’s volume by more than19 percent. what about Stuttgart? last year new space amounting to 194,000 square metres waslet in the city. This is a good figure, and the high demand for space especially in the city centre is asign that the growth will continue. It nevertheless pays to take a closer look, because an analysisoften reveals important differences. For one thing, not all office locations in the city are developingat the same rate. For another, prospective tenants now pay greater attention to differences betweennew and old premises. Beyond doubt, that is because of the complex demands on building servicessuch as IT. Moreover, tenants are less and less willing to rent premises that fail to meet modernstandards in energy efficiency and facilities. what does this mean for landlords and investors?In the coming years it will become more and more important for them to keep office premises inan up-to-date condition. Tenants will be less inclined to tolerate delays in renovation, and theywill demand rent reductions when renovation is neglected. with the prospects for growth now sofavourable, it is time to develop new, attractive locations and new office buildings. This will be achallenge to the city and, of course, to private investors.we hope that you find this publication interesting. If you have any questions concerning the officemarket and rentals, we will be glad to help you.Yours sincerely,Mario Caroli Björn Holzwarth
  8. 8. STUTTGaRT – wEll PREPaREd FOR THE FUTUREStuttgart continues to be a location with a sound economic base and strong growth potential.Baden-württemberg’s capital weathered the economic crisis of the past two years very well.and for the years ahead, the atlas of future Business Sectors in 2010, published by the Swissthink tank prognos, rates the city’s prospects as excellent.Wide range of business sectors HigH educational levelOne major reason for Stuttgart’s strong growth potential another factor in the region’s economic success is itsis its good mix of industries. Of central importance are highly qualified workforce. No other major German citythe automotive and automotive supply industries, which has such a high concentration of university graduates asare now enjoying especially strong growth owing to the Stuttgart, with 21.9 percent. with four large universitiesrising demand for electric vehicles and vehicles based on and continuously rising numbers of students, Stuttgartother new technologies. In addition, there are numerous can expect to remain in this position.companies specializing in engineering, environmentaltechnology, communications technology, publishing, loW unemployment ratemedia and finance. Efforts are also under way to form at the end of 2010, Stuttgart’s unemployment rate wasnew business clusters in the Stuttgart economic region. 5.8 percent, well below the national average of 7.2 per-Early signs of such activity can be seen in the programme cent. This was lower than at any time in the last 18 years.of study in medical technology that was established in Moreover, given the predicted economic growth of 2.5winter 2010/2011 at the University of Stuttgart in percent for 2011, the employment situation can becooperation with the University of Tübingen, and in the expected to remain satisfactory. One reassuring fact isrenewable energies programme that will start in the that rising domestic consumption will lead to continuedcoming winter semester. Innovative technologies and economic growth even if exports processes will also be developed at the FraunhoferCentre for Virtual Engineering, which is currently underconstruction. per capita purchaSing power in 2010: citieS with 500,000 or more reSidentS Munich 25,713 Düsseldorf 22,668 Frankfurt 21,627 Stuttgart 21,219 Cologne 20,648 Hamburg 20,158 Berlin 16,880 all figures in euros 0 5,000 10,000 15,000 20,000 25,000 data source: GfK GeoMarketing, June 2010
  9. 9. 8 9 sse ra Türlenst Site section 5 Site section 6 Site section 7 Still available retail + residential residential + office to be completed in 2014 wolfram asse nner Str Heilbro Site section 4 st rasse Still available Site section 8 retail + residential library 21 to be completed in 2014 to be completed in 2011 Sparkassen akademie to be completed in 2013 Europe-Plaza Site section 9 retail + residential to be completed in 2014 Site section 13 Pariser Höfe rt tuttga to be completed in 2012 Site section 12 Still available Site section 15HBF S Still available Present railway lines, in future Site section a2 residential STUTTGaRT 21 IS ON ITS waY construction work for the project Stuttgart 21 has now begun. the northern wing of the railway station was torn down in autumn 2010, and other preparations were carried out in the area of the former bus station at the south side of the building. Following a change in planning for site section a1, the Site sections 6, 8 and 9 on wolframstrasse again created Goldene acht project originally proposed by lBBw was excitement in 2010. a joint building permit application replaced by the Sparkassen akademie, a training institu- submitted just before the deadline by ECE, STRaBaG and tion run by the German Sparkasse banks. The new plan Bayerische Hausbau put an end to the discussion on better comprises a training centre, some 160 apartments for integration of the complex into the urban development overnight accommodation, and office space for about plan. The innovative concept, made up of attractively 330 employees. Each year some 26,000 Sparkasse em- spaced small units, includes 43,000 square metres for ployees will receive instruction here, completing a total of retailers, 4,500 square metres for restaurants, a 4-star 60,000 days of training. This will bring added life to the hotel with 160 rooms, and some 400 apartments. On the district. The library of the 21st Century, an important corner of Heilbronner Strasse and wolframstrasse the attraction that is expected to draw a million visitors each planning calls for a high-rise building with 30 to 50 luxury year, has now grown to full size. Opening is set for the apartments plus office space in the first three stories of fourth quarter of 2011. Construction for Europe Plaza, an the semi-basement. office project covering 16,300 square metres, can begin now that advance rental agreements are in place. Pariser developments in the past year demonstrate that site section Höfe, a project that includes some 250 apartments and a1 continues to offer interesting possibilities, both for an office wing with approximately 8,000 square metres, is project developers and for users. In no other major city under construction. Completion is expected by the second are there such large, contiguous premises available for quarter of 2012. office and other use as at present in the heart of Stuttgart.
  10. 10. RENTal TaKE-UP ExCEEdS all ExPECTaTIONSin 2010, the figures for rental volume in the Stuttgart office market were surprising and encouraging.Some 194,000 square metres were newly rented, reflecting the sharp rise in demand for office spacebrought about by the economic upturn. this is almost the figure achieved in 2000, which was just under200,000 square metres.Rental take-up thus increased by about 14 percent over ministry for approximately 19,000 square metres onthe previous year’s level of approximately 171,000 square willy-Brandt-Strasse. In the city centre the largestmetres. during the period under consideration 301 leases contract in 2010 was for a total of 5,400 square metres,were concluded, 45 more than in the previous year. concluded by an IT service provider.continued strong demand in tHe central upturn in city fringe locationsbusiness district and city centre Thanks to rental transactions by large-scale users, theIn 2010, the locations with the strongest demand and the fringe areas were able to post considerable gains. Inhighest number of leases were again in Stuttgart’s central Stuttgart-Zuffenhausen, for example, the rental volumebusiness district, that is, the area in the city ring between received a strong boost from a contract for some 22,000the main station, Theodor-Heuss-Strasse, Hauptstätter square metres. Significant increases in demand were alsoStrasse and Paulinenbrücke, plus the city centre. although recorded in Vaihingen/Möhringen, Fasanenhof andmore space was let in 2009, about 22,600 square metres, leinfelden-Echterdingen.this was largely the result of a contract by the interior
  11. 11. 10 11rental take-up of office Space in Stuttgart 1995–2010 in Sq. m 250,000 200,000 150,000 100,000 50,000 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Research BaNKHaUS EllwaNGER & GEIGER KG ©, figures as of 31 december 2010rental take-up in greater Stuttgart in Sq. m 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 central business district 35,350 25,350 19,000 4,600 55,100 33,300 43,000 61,500 44,400 38,200 32,800 city centre 36,600 25,710 45,000 28,400 21,700 43,200 31,300 46,600 41,700 83,800 66,600 vaihingen/möhringen 67,400 50,550 6,300 14,450 30,800 10,400 32,600 13,700 18,500 20,200 26,200 fasanenhof 4,900 2,700 11,000 72,500 4,000 3,700 3,500 2,300 10,600 2,700 5,300 feuerbach/Zuffenhausen 40,400 16,700 6,000 8,400 20,600 9,800 2,000 6,800 12,300 3,300 28,500 degerloch 3,830 5,700 2,700 3,000 6,000 3,400 4,500 7,200 9,200 4,900 2,100 Weilimdorf 4,900 13,150 16,000 750 3,000 6,600 6,000 5,100 12,800 5,900 11,400 bad cannstatt/Wangen 2,000 5,000 18,000 14,000 7,700 24,600 13,500 15,400 12,500 8,100 8,300 leinfelden-echterdingen 10,230 14,040 3,000 2,900 3,100 10,000 3,600 10,400 18,000 3,900 12,800 total 205,610 158,900 127,000 149,000 152,000 145,000 140,000 169,000 180,000 171,000 194,000 Source: Research BaNKHaUS EllwaNGER & GEIGER KG ©, figures as of 31 december 2010
  12. 12. TaKE-UP BY SECTORSIn 2010, the category with the highest demand was again In the case of financial service providers, the demand forthe other office users, which included doctors, architects, space rose over the 2009 level by about 2,000 squareengineers, and trading and industrial companies. The metres, to 16,300 square metres. The percentage of totalrental volume, approximately 93,200 square metres, rental turnover remained about the same.again showed an increase over the previous year. This wasmainly the result of a large rental transaction for some In the area of media/communication the financial crisis22,000 square metres on the xcel BusinessCampus in made itself felt through company budget cuts, leading toStuttgart-Zuffenhausen. a decline in demand. In 2010, the volume was only about 7,900 square metres, compared to some 10,500 squareThe IT and telecommunications industry likewise showed metres the previous year.a significant increase in demand. In 2009, the rentalvolume was only 11,000 square metres, whereas in 2010 The public sector also showed a decline in new came to about 34,900 square metres, corresponding to whereas an usually high take-up was achieved in 2009roughly 18 percent of the total. owing to the rental of some 19,000 square metres by the interior ministry on willy-Brandt-Strasse, the newly rentedIn the consultants category the previous year’s result of space in 2010 came to about 15,800 square metres, aapproximately 25,900 square metres increased by almost significant drop.100 percent. leases were concluded for this sectorespecially in the central business district and city centre.take-up By SectorS in % 2003 2004 2005 2006 2007 2008 2009 2010 media/communication 5.02 4 8 6.64 6.27 5.56 6.14 4.07 financial service providers 8.04 34 12 9.93 10.36 15.78 8.36 8.41 consultants 7.03 5 10 20.29 18.4 13.39 7.72 13.35 public sector 4.02 9 21 3.21 17.75 7.22 30.41 8.14 others 73.21 38 41 48.07 37.28 36.94 40.94 48.04 it/telecommunications 2.68 10 8 11.86 9.94 21.11 6.43 17.99 total 100 100 100 100 100 100 100 100 Source: Research Bankhaus EllwaNGER & GEIGER KG ©, figures as of 31 december 2010
  13. 13. 12 13TaKE-UP BY SIZE OF PREMISESin keeping with the characteristic pattern on the Stuttgart office market, demand wasstrongest for premises up to 500 square metres. in this segment there were 222 leases,40 more than in the previous year.In the central business district and city centre 137 office There were 4 leases, for a total of 39,930 square metres,premises in this category were let. The southern fringe for premises larger than 5,000 square metres. Thisareas also showed strong demand. about 27 percent of corresponds to about 21 percent of the total rental take-the total rental take-up was in this category. up. The lease concluded by Bosch for premises in Stuttgart- Zuffenhausen accounted for 22,000 square metres of thisPremises between 501 and 1,000 square metres accounted total. Premises totalling 5,000 square metres were let to afor 46 leases, corresponding to 17 percent of the total private educational institution in Stuttgart-Feuerbach.turnover. For areas between 1,001 and 2,000 square metres another 5,430 square metres were taken by an IT servicethere were 14 leases in 2010, 1 more than in the previous provider in the city centre, plus approximately 7,100 squareyear. Most of the demand was in Stuttgart’s city centre. metres by an office supply company in Stuttgart-Vaihingen.In the segment from 2,001 to 5,000 square metres 15premises were let, 5 more than in 2009.compariSon of new contractS By Size 60,000 55,000 50,000 Total space 2010: 194,000 sq. m 45,000 Total space 2009: 40,000 171,000 sq. m 35,000 30,000 25,000 20,000 15,000 10,000 0 < 500 sq. m 501 – 1,000 1,001 – 2,000 2,001 – 5,000 > 5,000 sq. m 2010 2009compariSon of new contractS By numBer 200 222 Total number 2010: 182 301 Total number 2009: 100 256 46 47 14 13 15 10 4 4 0 < 500 sq. m 501 – 1,000 1,001 – 2,000 2,001 – 5,000 > 5,000 sq. m Source for both charts: Research BaNKHaUS EllwaNGER & GEIGER KG ©, figures as of 31 december 2010
  14. 14. RENT PRICES SHOw a SMall dEClINEthe average rent in Stuttgart’s market for office premises as of 31 december 2010 was 11.00 eurosper square metre, slightly below the previous year’s level. in relation to product quality, rent pricesremained stable.a total of 120 leases were signed in the price segment up there were some leases at high prices, there were ato 10.00 euros per square metre, 32 of which were at number of others for older office properties with simpleprices of 8.00 euros or less. In the range between 10.01 fittings and equipment.and 13.00 euros per square metre there were 133 leases.19 were at prices between 13.01 and 15.00 euros per loW price level in tHe outlying districts tosquare metre. a further 19 leases were in the range tHe nortH and eastbetween 15.00 and 17.00 euros per square metre, and In the outlying districts to the north (Feuerbach/5 exceeded 17.00 euros per square metre. Zuffenhausen and weilimdorf) and east (Bad Cannstatt/ Hedelfingen/wangen), most of the available office spacediffering price trends in tHe central busi- is in existing premises with simple fittings. The average rentness district and city centre level is correspondingly low. Moreover, there is a fairly lowIn the central business district there was a slight decline demand for office space in these districts. Instead of purein peak rents, from 18.00 to 17.50 euros per square metre. office locations one generally finds a mixture consisting ofIn contrast, the average rent in the central business district skilled trades, car repair shops, petrol stations, beveragerose, from 13.60 euros to 14.30 euros per square metre. retailers and similar businesses.One reason was that numerous leases were agreed forpremises in new buildings, although here the prices were looking at these areas in more detail, however, one seesusually below the peak rate. In addition, premises were that there were large transactions at prices below 8.00 eurossublet at subsidized prices in buildings that were almost per square metre almost everywhere. In some cases thesenew. In the city centre the peak rent remained constant were interim transactions in older premises or premises inat 14.90 euros per square metre. The average rent fell by which most investments were made by the tenants.0.30 euros to 11.40 euros per square metre. whereas
  15. 15. 14 15peak and average central BuSineSS diStrict rentS 1995–2010 in €/Sq. m 20.00 19.00 18.00 17.00 16.00 Peak rents 15.00 14.00 13.00 12.00 Average rents 11.00 10.00 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: Research BaNKHaUS EllwaNGER & GEIGER KG ©, figures as of 31 december 2010peak and average rentS 2010 in €/Sq. m 20.00 Peak rents 17.50 average rents 15.00 12.50 10.00 7.50 5.00 2.50 0 Central business district City centre Outlying districts to the north Outlying districts to the east Outlying districts to the south Source: Research BaNKHaUS EllwaNGER & GEIGER KG ©, figures as of 31 december 2010
  16. 16. SlIGHT INCREaSE IN VaCaNT OFFICE SPaCEas expected, the supply of vacant office space increased by 27,000 square metres over the previous year,amounting to approximately 480,000 square metres as of 31 december 2010. with the total office spaceat about 7.42 million square metres, this corresponds to a vacancy rate of 6.4 percent.One reason for the increase in 2010 is the fact that some In weilimdorf the vacancy rate fell by 12,900 square metres33,900 square metres of space were added in the form of in 2010 to 42,300 square metres. However, little furthernewly built premises, plus about 8,500 square metres of improvement can be expected because demand in recentpremises that underwent core renovation. another is that years has been relatively low and the supply is much toospace became available in a number of major existing large in relation to the size of the location. In leinfelden-buildings that had previously been sublet. Echterdingen the vacancy rate increased owing to the relocation of an IT service provider to a new officeThe increase was especially significant in Stuttgart’s central building, which freed the space in its former district. whereas approximately 51,400 square Beyond this, the vacancy rate in the outlying areasmetres were vacant in 2009, the supply amounted to remained constant.some 71,600 square metres as of 31 december 2010.when the Postquartier is completed in 2011, another whereas only 42,400 square metres were completed in13,500 square metres of office space will be added. In the 2010, the completion volume in 2011 will amount tocity centre there was an increase in free premises as well, about 71,500 square metres of office space. This includesamounting to about 10,000 square metres. some 25,600 square metres of office space undergoing core renovation.vacant office Space aS of 31 decemBer 2010 Stuttgart central business district Bad Can 116,900 sq. m 19,700 s15% 24 % 9% 4%Stuttgart city centre weilimdorf73,100 sq. m 42,300 sq. m
  17. 17. 16 17 completion volume in Sq. m 350,000 300,000 250,000 Building completion Pre-letting 200,000 150,000 100,000 50,000 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: Research BaNKHaUS EllwaNGER & GEIGER KG ©, figures as of 31 december 2010nnstatt, wangen etc. degerloch Fasanenhof Möhringen sq. m 11,700 sq. m 28,200 sq. m 30,100 sq. m 16 % 2% 6% 6% 12 % 6% 100% leinfelden-Echterdingen Feuerbach, Zuffenhausen Vaihingen 75,100 sq. m 27,200 sq. m 55,700 sq. m Source: Research BaNKHaUS EllwaNGER & GEIGER KG ©, figures as of 31 december 2010
  18. 18. UPTURN IN THE OFFICE MaRKET THROUGHOUT GERMaNYin 2008 and 2009, the rental take-up in all german cities was affected by the economic crisis. in 2010,however, a distinctly positive trend emerged, and in some areas expectations were exceeded.The marked increases in rental turnover reflected improved decline, but the peak rent here remains stable at 17.50economic figures for many businesses and the accom- euros per square metre.panying rise in demand for office space. In spite of the rise in rental turnover throughout theIn the Big Seven (Berlin, düsseldorf, Frankfurt, Hamburg, country, the supply of office space at the end of 2010Cologne, Munich, Stuttgart) the total rental turnover increased. That was because many older buildings noamounted to some 2.74 million square metres, an increase longer found users, which contributed to a significantof roughly 19 percent over the previous year. Stuttgart gain in vacant office space. another factor affectinglikewise posted a turnover gain of about 14 percent. vacancy was the addition of newly built premises. InMost of the demand came in the second half of the year. Munich, for example, a number of projects launched in 2007 and 2008 reached completion and were put on theThe peak rents varied widely from city to city. whereas market. Now that the economic forecast is favourable,Berlin, düsseldorf and Frankfurt showed slight gains, the demand for office space, in particular modern premises,Munich experienced a drop of 1.00 euro, down to 28.00 can be expected to rise. Thus there will be a decline ineuros per square metre. Stuttgart also registered a slight vacancies in the years ahead.
  19. 19. 18 19compariSon of vacancy rateS in germany in % 20 2006 15 2007 2008 2009 2010 10 5 0 Frankfurt düsseldorf Cologne Munich Berlin Hamburg Stuttgart Source: Research BaNKHaUS EllwaNGER & GEIGER KG ©, figures as of 31 december 2010turnover of Space of the “Big Seven” in Sq. m 900,000 800,000 700,000 600,000 Munich 500,000 Frankfurt Hamburg 400,000 Berlin Düsseldorf 300,000 200,000 Cologne Stuttgart 100,000 0 2003 2004 2005 2006 2007 2008 2009 2010 Source: Research BaNKHaUS EllwaNGER & GEIGER KG ©, figures as of 31 december 2010Stuttgart compared to other german citieS average rent in the central rental volume in sq. m peak rent in € vacancy rate in % business district in € 2010 2009 2010 2009 2010 2009 2010 2009 berlin 425,000 420,000 20.50 20.20 14.00 15.00 8.9 8.4 düsseldorf 370,000 232,000 23.50 22.50 16.50 16.50 11.5 10.3 frankfurt a. m. 500,000 360,000 35.60 35.00 22.00 22.00 15.1 14.3 Hamburg 440,000 387,000 23.00 24.00 13.50 13.50 9.8 7.5 cologne 220,000 200,000 20.00 21.00 11.25 12.50 8.9 8.3 munich 590,000 530,000 29.00 13.00 14.20 13.90 8.2 8.1 stuttgart 194,000 171,000 17.50 18.00 14.30 13.60 6.5 6.5 Source: Research BaNKHaUS EllwaNGER & GEIGER KG ©, figures as of 31 december 2010
  20. 20. CENTRal STUTTGaRT: BIG POTENTIal FOR NEw GROwTHin 2010, the rental volume in the central business district, that is, the area within the city ring and thesurrounding parts of the city centre amounted to some 99,400 square metres. this represents adecline of 22,600 square metres, or roughly 23 percent, from the previous year.33 percent of this rented space, or about 32,800 square whereas about 58 percent of the premises in the centralmetres, was in the central business district. This figure is business district were let for less than 14.00 euros persimilar to that for 2005, when turnover was comparatively square metre in 2009, the figure was only 37 percent inlow. Thus the forecasts made in past years of a steady 2010, an encouraging development. In the price segmentdecline in rental figures owing to a lack of new buildings between 14.01 and 16.00 euros per square metre, thehave been confirmed. Recently, however, a number of proportional share rose from 29 percent in 2009 to 48 per-new projects have been launched to fill the need for cent in 2010. In 2010, 14 percent of all leases were signedlarge, contiguous premises. In addition, since 2010 about for 16.01 euros per square metre and above, roughly the15,000 square metres of sub-let space in almost-new same as the previous year’s figure of 12 percent.premises have been on the market. In contrast, thesurrounding parts of the city centre showed the second In the city centre 92 percent of the premises were let forhighest rental take-up of the last ten years: 66,600 square less than 14.00 euros per square metre, as compared tometres. This demonstrates that many businesses think it 83 percent the previous year. The segment up to 500is important to have a central location. square metres accounted for 28 percent of leases, an increase of 10 percent. 53 percent of leases were in the67 percent of all new leases in central Stuttgart were for segment up to 1,000 square metres. This was an increasepremises in the city centre. In the central business district of 20 percent over 2009.about 12 percent more leases were signed than in theprevious year, even though the rental volume here was about 15 percent of the premises, corresponding to somelower. 5,100 square metres, were let at prices above 16.01 euros per square metre. This is a decline of approximately 38 percent. In 2011, an increase can be expected in this seg- ment.
  21. 21. 20 21NORTHERN STUTTGaRT: NEw CONCEPTS NEEdEdfeuerbacH/ZuffenHausen Weilimdorfa transaction for about 22,000 square metres on the xcel weilimdorf also showed surprisingly good results, thanksBusinessCampus in Zuffenhausen reflects the new confi- to a large rental transaction concluded by an IT/tele-dence in the automotive engineering and component communications company for about 5,400 square metressupply industries, which have always been strong here. and another for approximately 2,200 square metres. TheIn past years the economic recession led to a significant total rental volume was 66.7 percent of the total turnover,decline in rental figures in this sector. Thanks in large part which came to about 11,400 square the new transaction, the rental take-up is now at a ten-year high. This is especially gratifying, because the location has been experiencing a decline in transactions in recent years. TheIn addition, a private educational institution has concluded average rental take-up in the past decade was only aboutan important lease agreement for 5,000 square metres in 7,800 square metres per year.the OaSIS II project in Feuerbach. Together, the twotransactions account for about 95 percent of the total The planned relocation of the auditors Ernst & Young torental volume. the Stuttgart airport in 2015 will worsen the situation, however, increasing the vacant office space by 45,000The other transactions were mostly in the segment up to square metres. as a result, it will be necessary for govern-500 square metres and at prices of 9.00 euros per square ment authorities and owners to address the problem ofmetre and below. Only 18 percent of the leases were the area’s overall structure.signed at a price between 12.00 and 13.00 euros persquare metre. a total of 10 leases were signed, 6 of which were for premises below 500 square metres. For 8 leases the price was less than 9.00 euros per square metre, and for 2 it was between 9.00 and 10.00 euros per square metre.
  22. 22. EaSTERN STUTTGaRT: IN a waITING POSITIONbad cannstatt/Wangen/Hedelfingen In the segment of 500 square metres and less, 9 leasesIn the past two years, following the successful marketing were signed for a total of about 2,060 square metres,of new buildings such as the Cannstatter Carré and the corresponding to about 25 percent of the total rentalOtto Hirsch Center and of large, favourably priced take-up. 38 percent of the premises were in the segmentpremises like the Kodak areal in Hedelfingen, eastern between 501 and 1,000 square metres, and 37 percentStuttgart has seen a significant decline in rental take-up. were between 1,001 and 2,000 square metres.In 2010, a volume of only about 8,300 square metres wasachieved. 60 percent of the premises in eastern Stuttgart were let for less than 8.00 euros per square metre, and roughlywork on the 22-hectare Neckarpark project, a new urban 32 percent were let at prices between 8.00 and 10.00 eurosdistrict comprising apartments, offices and mixed use on per square metre. about 8 percent of the premises werethe site of the former goods station, has been halted. The in the price segment above 10.00 euros per square of Stuttgart is now reviewing the financing. Besides This is a clear sign that most of these premises were inthis, no other projects are being planned. New premises older existing buildings.therefore cannot be expected in eastern Stuttgart in thenear future.
  23. 23. 22 23SOUTHERN STUTTGaRT: POSITIVE dEVElOPMENT CONTINUESdegerlocH leinfelden-ecHterdingenwith its direct access to central Stuttgart and to the B27 In leinfelden-Echterdingen, following a severe decline inhighway, the a8 motorway and the airport, degerloch is 2009, leases were signed in 2010 for a total of 12,800undoubtedly one of the most attractive locations in the square metres of office space. This was an encouragingregion. In spite of this, the rental figures here have development. There were 31 signings, an increase of 230declined for two years running. In 2010, the total volume percent. The location generated particular interest amongwas 2,100 square metres. IT and telecommunications companies.The majority of the new leases were in the segment up to Roughly 41 percent of the rented premises were in the500 square metres, and 2 were for premises between segment up to 500 square metres. The segment between501 and 1,000 square metres. The transactions were 501 and 1,000 square metres accounted for 27 percent ofequally divided between the Tränke area and the area the leases. In addition, there was one contract for 4,000surrounding albplatz. square metres, signed by a consulting company.35 percent of the premises were let for prices below 12.00 63 percent of the premises were let for less than 9.00 euroseuros per square metre, 65 percent were in the segment per square metre. 25 percent were in the segment betweenbetween 12.00 and 13.00 euros per square metre. 9.01 and 10.00 euros per square metre. For approximately 11 percent of the premises the price was between 11.00The only new building project currently being marketed and 12.00 euros per square degerloch is wilhelmshöhe. Completion is planned forthe first quarter of 2011. Tenants have already been foundfor 65 percent of the new premises. Further projects arenot expected.
  24. 24. fasanenHof 35 percent of the rented premises were in the segmentIn early december 2010, Fasanenhof was connected to below 500 square metres or between 501 and 1,000 squarethe urban railway, allowing Stuttgart’s main railway station metres. 19 percent were between 1,001 and 4,000 squareto be reached in 26 minutes. This considerably added to metres. There was 1 lease with an IT service providerthe location’s attractiveness. a significant revival of the between 4,001 and 5,000 square metres and another withmarket was detectable already during that year. Turnover a user in the same sector for more than 5,001 square metres.of space rose from 2,300 square metres in 2009 to 5,300square metres in 2010. For 68 percent of the rented premises the price was between 10.00 and 12.00 euros per square metre, and30 percent of the rented premises was in the segment up for 25 percent the price was between 12.00 and 13.00to 500 square metres. In the segment between 1,001 and euros per square metre.2,000 square metres and between 2,001 and 3,000 squaremetres there was 1 lease for an energy company and 1 for The STEP 8.2 office project, like its predecessor STEP 8.1,an insurance company. 90 percent of all leases were in the was fully let before construction was finished. Completionrange from 9.00 to 10.00 euros per square metre. is scheduled for the first quarter of 2011. These projects have been so successful that planning has already begunFor alphaHaus Stuttgart, the former headquarters of for STEP 8.3.debitel aG, a renovation concept has now been decided on.These premises, which cover about 12,000 square metres, The former IBM complex has been significantly improvedwill thus soon be available for a new user. The Business through a renewal of the grounds and the ensemble itself.Park is likewise being refurbished to meet modern office It is now called Carré 5. The attractive buildings, locatedrequirements. The entire ensemble is to be redeveloped on some 40,000 square metres of campus-like terrain, areby architects and engineers. ready to be let. an IT service provider has already signed a contract for some 4,900 square metres.vaiHingen/möHringen and stepThe Vaihingen/Möhringen area, and especially STEP, a number of other projects are also under way in Vaihingen/which celebrated its tenth anniversary in 2010, continues Möhringen. Planning rights have already been secured,to be one of the most sought-after office locations in and construction can begin as soon as sufficient advancesouthern Stuttgart. The total rental volume in 2010 was rental agreements are in place.26,200 square metres, about 30 percent more than in2009. STEP accounted for 61 percent of the newly rentedspace.
  25. 25. 24 25 Turnover of office space in 2010 < 10,000 sq. m 10,000 – 20,000 sq.m 20,000 – 30,000 sq.m 30,000 – 40,000 sq.m > 40,000 sq. m Industrial/office locations OVERVIEw OF THE STUTTGaRT OFFICE MaRKET a 81 towards Heilbronn a 81 towards singen Northen Stuttgart Central Eastern Stuttgart Stuttgart Western Stuttgart Southern Stuttgarta 8 towards Karlsruhe motorway intersection stuttgart a 81 a 8 towards munich
  26. 26. 26 27UPSURGE IN STUTTGaRT’S OFFICE MaRKETin 2010, 301 leases were concluded in Stuttgart’s office market, 45 more than in the previous year.the total rented space, 194,000 square metres, was the highest in the last ten years.This positive trend can be expected to continue in 2011, increasing demand for modern premisesas there are signs that demand will stay high. we are Moreover, users who are willing to pay high prices fortherefore anticipating an office space turnover of approxi- premises are putting increasingly higher demands on themately 200,000 square metres. quality of buildings and locations. a modern energy standard like a lEEd or dGNB certification, for example,peaK rents on tHe rise is becoming more and more important in leasing deci-In the past year no uniform trend could be discerned in sions, as are the efficient use of space and a prestigiousStuttgart’s price structure and in the size of premises. atmosphere. Correspondingly, older existing buildings that have been renovated in a superficial manner, like be-In the light of the figures for other major cities, Stuttgart’s ing given a new colour scheme, are very hard to positionpeak rent of 17.50 euros per square metre is favourable. on the market. as always, high service charges and ineffi-It is still possible here to find office space of like-new cient use of space make continuous rent reductions nec-quality at good terms. However, rising property prices and essary in order to maintain a building’s competitiveness.a short supply of vacant space are making it increasinglydifficult for project developers to implement new con- In conclusion, it can be said with confidence that risingstruction projects at low cost. Thus the peak rent can be requirements will create a continued strong demand onexpected to rise in the medium term. Stuttgart’s market for office space of high quality.
  27. 27. YOUR CONTaCTSellwanger & geiger privatbankiers is the ideal partner for marketing your office properties. ourmany years of experience and unique range of services enable us to move the market and proactivelyidentify trends. for us, having a sixth sense isn’t a supernatural ability but simply part of the service weoffer you. our team in Stuttgart is looking forward to your call or us: phone +49 (0) 711 21 48 297 or fax +49 (0) 711 21 48 290.on the internet: · www.bueroflaeche-stuttgart.deUlrich Nestel Sebastian degen Helga SchönerHead of Office letting and Consultant Office letting Market Research and Office lettingRetail Projects, Stuttgart Phone +49 (0) 711 2148 166 Phone +49 (0) 711 2148 269Phone +49 (0) 711 2148 291 DISCLAIMER: although this study has been prepared with all due care, EllwaNGER & GEIGER Privatbankiers accepts no liability for the correctness of the assessments presented. we are sure that you will understand this. illustrations: Manfred Storck: Pages 2, 3Matthias Hägele alice disamConsultant Office letting assistant Office lettingPhone +49 (0) 711 2148 292 Phone +49 (0) 711 2148
  28. 28. 28 29ELLWANGER & GEIGER REAL ESTATEeLLwaNger & geiger real estate offers you a one-stop shop for a comprehensive range of services rela-ting to the asset class of real estate. with the very highest discretion and integrity, we enable you tokeep your bearings in rapidly changing markets. Our success is founded above all on excellent knowledgeof the market and decades of experience in real estate business.COMMErCial PrOPErTY rEal EsTaTE ManagEMEnT assET ManagEMEnTExtensive research is the basis for our We put and keep your real estate on We provide national and internationalanalyses of locations, portfolios and the road to success with intelligent investors with full care and support,cost-effectiveness that reflect market lifecycle concepts – and accompany from when they enter the market toconditions. From this, we derive strat- you throughout its life. We are on when they exit it – always on theegies whose goal is to capitalize on hand to help you at more than seven basis of well-founded research so aspotentials for earnings and efficiencies. locations throughout Germany. to help systematically develop and implement an investment strategy.Apart from comprehensive leasing Our sErViCEs As experts in ascertaining values, weservices, our core expertise includes Portfolio consulting also create reports for our customersproject consulting and transaction Project management in compliance with national and inter-business. We adopt a holistic approach echnical property T national standards – for individualin consulting on real estate invest- management properties and portfolios alike.ments: we partner you all the way – ommercial property Cfrom development of marketing management Our sErViCEsstrategies, to preparation of data on Lifecycle management Strategic consultingproperties, to implementation of Acquisitionmarketing processes. Due diligence reviews Portfolio managementOur sErViCEs Research nvestment analysis and consulting I Hamburg ransactions, renting and leasing T Berlin of office, retail, industrial and logistics facilities Dortmund Dresden OUR OTHER PUBLICATIONS Frankfurt Retail Market Report Logistics Market Report Investment Market Report Stuttgart Munich You can obtain these free of charge from:
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