THE STUTTGART OFFICE MARKET 2011 / 2012

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In 2011, thanks to the economic recovery, the rental turnover in Baden-Württemberg’s capital rose to a record level. The total came to 285,000 square metres, a remarkable 47 percent increase over the already gratifying results of 2010. Premises smaller than 500 square metres continued to be a mainstay of business, but those exceeding 2,000 square meters showed a strong increase as well. Moreover, this growth was accompanied by a rise in rent levels; rents increased by 0.60 euros per square metre over the previous year.

Are these figures just a blip, or can we see a steady trend that will continue in the years ahead? This is one of the pressing questions that property owners, investors and tenants alike are asking. One promising sign of continued growth on the Stuttgart market is the decline in vacant office space. In addition, construction is moving rapidly ahead in areas like Section A1 of Stuttgart 21, to give just one example.

It’s best to make your own judgement. This report, which you find attachet below, will give you the information you need. It provides you with all the latest facts and figures on the Stuttgart office market.

If you need additional information or have specific inquiries, we will be glad to talk with you, in private and in person. Call us at any time to arrange an appointment.

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THE STUTTGART OFFICE MARKET 2011 / 2012

  1. 1. BANKHAUS ELLWANGER & GEIGER KG STUTTGART ON THE MOVE.Real EstateBörsenplatz 1, 70174 Stuttgart, Germany THE STUTTGART OFFICE MARKET 2011/2012Phone +49 (0) 711/2148 297, Fax +49 (0) 711/2148 290www.privatbank.de 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 volume rents (mill, sq. m) (sq. m) (sq. m) 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 2011 285,000 €18.80 €14.30 424,000 5.7 7.449 45,900 41,200 * Data from a survey by BulwienGesa AG + Baasner, Möller & Langwald GmbH Source: Research BANKHAUS ELLWANGER & GEIGER KG ©, figures as of 31 December 2011
  2. 2. 28 29 PA U LI N E Paulinenstrasse 21 ELLWANGER & GEIGER REAL ESTATE. Office To be completed at unknown date ELLWANGER & GEIGER Real Estate offers you a one-stop shop for a comprehensive range of services CA L E IDO C A SA N O VA Tübinger Strasse 41– 43 Augustenstrasse 1/Paulinenstrasse 41 relating to the asset class of real estate. With the very highest discretion and integrity, we enable Office + retail + residential Office + retail To be completed 3rd quarter of 2013 Completed in 2011 you to keep your bearings in rapidly changing markets. Our success is founded above all on excellent knowledge of the market and decades of experience in the real estate business. E 65 Eberhardstrasse 65 Office + retail COMMERCIAL PROPERTY REAL ESTATE MANAGEMENT FUNDS & ASSET MANAGEMENT To be completed 3rd quarter of 2014 Extensive research is the basis for our We put and keep your real estate on We plan individual real estate invest- MA RKTSTRA SSE 6 + 8 G E RB E R analyses of locations, portfolios and the road to success with intelligent ments and create special funds for T HE O 10 Office + retail Marienstrasse / Tübinger Strasse Theodor-Heuss-Strasse 10 cost-effectiveness that reflect market lifecycle concepts – and accompany institutional investors and professional To be completed 2nd quarter of 2012 Office + retail + residential HO SP I TA LHO F Office + retail To be completed 2nd quarter of 2014 Completed in 2011 Hospitalplatz 20 / Gymnasiumstrasse 36 conditions. From this, we derive you throughout its life. We are on private investors (family offices). Office To be completed 4th quarter of 2013 strategies whose goal is to capitalize hand to help you at five locations Each investment approach is devised on potentials for earnings and effi- throughout Germany. in close consultation with the customer. ciencies. An investment volume is selected OUR SERVICES that permits niche investments and Apart from comprehensive leasing Portfolio consulting individual mandates. By creating services, our core expertise includes Project management portfolios for single investors or small G A LLI O N HA U S project consulting and transaction Technical property groups, we are able to provide indi- Theodor-Heuss-Strasse 8 business. We adopt a holistic approach management vidual support for the duration of the Office + retail Q UAR TIER A M KA RL SPL ATZ Holzstrasse 15 + 17 Completed in 2011 D A S Q U A D RAT in consulting on real estate invest- Commercial property investment. Different investment Office + retail Büchsenstrasse / Hospitalstrasse ments: we partner you all the way – management vehicles are selected depending on To be completed at unknown date Office + retail + residential Completed in 2011 from the development of marketing Lifecycle management the needs and product preferences strategies, to preparation of data on of each investor. properties, to implementation of marketing processes. OUR SERVICES Special funds in accordance with OUR SERVICES the German Investment Company B Ü LO W C A RRÉ Lautenschlagerstrasse 21 Research Act (KAGG) Office + retail To be completed 1st quarter of 2013 Investment analysis and consulting Closed investment models Transactions, renting and leasing (KG, GmbH) of office, retail, industrial and Luxembourg security funds and logistics facilities special funds, SICAV, SIF P O ST Q U A RT I E R Lautenschlagerstrasse 17 Individual schemes for offshore Office + retail Berlin Completed in 2011 investors Dortmund C I T Y G AT E Kriegsbergstrasse 11 OUR OTHER PUBLICATIONS Office + retail Frankfurt To be completed 2nd quarter of 2014 Retail Market Report Logistics Market Report Investment Market Report StuttgartPhotograph: Manfred Storck Munich You can obtain these free of charge from: Corinna.Bluemke@privatbank.de
  3. 3. BANKHAUS ELLWANGER & GEIGER KG STUTTGART ON THE MOVE.Real EstateBörsenplatz 1, 70174 Stuttgart, Germany THE STUTTGART OFFICE MARKET 2011/2012Phone +49 (0) 711/2148 297, Fax +49 (0) 711/2148 290www.privatbank.de 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 volume rents (mill, sq. m) (sq. m) (sq. m) 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 2011 285,000 €18.80 €14.30 424,000 5.7 7.449 45,900 41,200 * Data from a survey by BulwienGesa AG + Baasner, Möller & Langwald GmbH Source: Research BANKHAUS ELLWANGER & GEIGER KG ©, figures as of 31 December 2011
  4. 4. 4 5CONTENTS.Foreword 6Stuttgart – an attractive and promising location 8Stuttgart 21 – Section A1 is coming alive 9Rental volume at an all-time high 10Increased demand for office space in many sectors 12Renewed interest in large premises 13Rental rates exceeding previous year’s level 14Marked decline in vacant office space 16Nationwide upturn continuing 18Central Stuttgart: Persistently strong demand 20Northern Stuttgart: Mixed trends 21Eastern Stuttgart: Untapped potential 22Southern Stuttgart: A top location with a sunny outlook 23Overview of the Stuttgart office market 25Forecast: Stuttgart’s office market – stronger than ever 27Your contact partners 28ELLWANGER & GEIGER Real Estate 29
  5. 5. FOREWORD.STUTTGART – MOTOR FOR TOMORROW.The future of humanity is in cities. Two hundred years ago, about 97 percent of the world’spopulation lived in rural areas. Today half of all people live in cities. According to United Nationspredictions, that figure will be three-quarters by the middle of this century. Cities are motorsof future growth. Their expansion is driven by factors like quality of life, economic vigour andeducation. At the same time, they face a major challenge: while continuing to grow, they mustpreserve their quality of life.How can Stuttgart do this?The instruments to do so can be found in the many topics that hold promise for the future: a widerange of sustainable technologies, especially in mobility, construction, tourism, health servicesand “knowledge for tomorrow”. Stuttgart is making rapid progress in these areas, and its relatedbusiness clusters have become an important source of its economic strength. One major milestonein the field of “knowledge for tomorrow” was the opening of the large new city library, whichwill draw 1.2 million visitors each year. A mobility map will explain Stuttgart’s integrated mobilityservices, and sustainable mobility networks will foster the development of public and privatetransport. Architects, urban planners, civil engineers and tradespeople are working to supply urbandistricts with renewable energy, build zero-energy houses and develop mixed-use residential,working and leisure areas. By constructing new buildings and expanding its existing ones, theStuttgart Clinic is enhancing the city’s healthcare profile. These are just a few examples of howthe city is promoting the local economy with extensive measures. Because Stuttgart is committedto being a motor for business development and it intends to stay that way.We would like to thank ELLWANGER & GEIGER Privatbankiers for their many years of excellentcooperation and for their continuation of the public-private partnership that has made it possibleto produce a new edition of this publication.Dr. Wolfgang Schuster Ines AufrechtMayor of Stuttgart Director of Business Development, Stuttgart
  6. 6. 6 7STUTTGART – THE OFFICE MARKET IS BOOMING.“If you had another chance to decide, would you select this city as your place of business?” Thiswas the question that IW Consult put to a number of companies in a survey. “We’d do it again”is what almost 90 percent of the companies in Stuttgart replied. In terms of positive responses,Stuttgart took fifth place among German cities, well ahead of most. So Stuttgart seems to have allthe right ingredients as a business location, and demand for office space is correspondingly brisk.Established businesses in particular have expanded in Stuttgart and stimulated the market byrenting premises on a large scale. As a consequence, the rental volume for 2011 was the highestof all time. But current developments should not make landlords and investors complacent: theymust continue to work on meeting modern requirements in areas like energy efficiency, certificationaccording to the LEED or DGNB standards and the provision of ample parking space. Expectationsamong users of office space are rising, and in some areas, particularly in the central businessdistrict and city centre, premises are still in short supply. Steps should be taken now to renovateand modernise existing buildings, invest in attractive new construction projects and promote thedevelopment of other locations. Project development is an especially effective way of creatingdemand for high-quality premises, and it helps to give the city a fresh and modern appearance.What is the current situation in the office market and how has it developed? What trends can weobserve and how will they affect the rental situation? This report on the office market will providedetailed information and give you new things to think about. We hope that you will benefit fromreading it, and we would be glad to answer any questions you may have about these topics.Mario Caroli Björn Holzwarth
  7. 7. STUTTGART – AN ATTRACTIVE AND PROMISING LOCATION. In Stuttgart the waves of the economic crisis have now receded. The city weathered the crisis well, thanks to its versatility and innovative spirit. During the current period of recovery, its economy is also being boosted by factors like traditionally low unemployment and a highly qualified workforce, creating an attractive market. VARIETY INSTEAD OF MONOCULTURE project Car2go, for example, has been a major success. Although the region experienced a sharp rise in un- The city of Stuttgart has likewise taken the initiative and employment, it was able to recover very quickly: in less is drafting a master plan for a Mobility Card. Projects like than twelve months the unemployment rate dropped this make the region more attractive, because mobility by 40 percent, clearly demonstrating that the region is is the key factor for investors seeking a location. In the not exclusively dependent on the automotive industry. ADL mobility check, Stuttgart now holds fourth place In fact, the diversity of the region’s industries is what among major German cities. enabled it to respond so quickly to economic fluctuations. And business diversity is continuing to increase: bio- FRUITFUL INTERACTION BETWEEN ACADEMIA AND technology and medicine, for example, are growing in BUSINESS importance. Companies that are in close touch with events and have access to corresponding research results are able to FORWARD-LOOKING INVESTMENTS detect trends at an early stage and prepare themselves The local automotive industry is also preparing itself for better for change. The Baden-Württemberg Cooperative future challenges, investing in electric vehicles and future State University and the University of Hohenheim provide forms of mobility which have considerable potential. Stuttgart with the necessary transfer of knowledge between According to a worldwide study carried out by the con- academia and local business. This fruitful symbiosis fosters sulting firm Arthur D. Little (ADL), investments in net- an awareness of systemic risks – a key factor for economic worked urban mobility could almost triple by 2050 from success. the current level of 300 billion euros per year. Stuttgart, the home of major automakers and suppliers, is especially well positioned to benefit from these developments. And its companies have not been napping: the Daimler PER CAPITA PURCHASING POWER IN 2011, IN € CITIES WITH 500,000 OR MORE RESIDENTS Munich 26,863 Düsseldorf 23,708 Frankfurt 22,929 Stuttgart 22,131 Cologne 21,788 Hamburg 21,320 Berlin 17,808© Stuttgart-Marketing GmbH Data source: GfK GeoMarketing, figures as of November 2011
  8. 8. 8 9 Development model S PAR KAS S E NA KA DE MIE Training + residential SITE Under construction or completed To be completed 3rd quarter SE CTION 4 of 2014 Available space PA R I S E R H ÖF E Office + residential To be completed 1st SITE quarter of 2012 CITY L IBRA RY SE CTION 5 SI T E SE C T I O N 7 Hotel + residential To be completed 3rd E UR O PE PLAZA quarter of 2014 Office To be completed at unknown date SI T E SE CTIO N 12SITESECT I O N 15 MIL A NE O Wol Office + retail + residential framst rass To be completed 3rd quarter of 2014 e sse Wolframstra STUTTGART 21 – SECTION A1 IS COMING ALIVE. The referendum of 27 November 2011 gave a clear go-ahead for Stuttgart 21, the project to rebuild Stuttgart’s main railway station, putting an end to the uncertainty which had blocked progress in construction, and will allow work to move forward. The dedication of the new “Library of the 21st Century” has now started, almost at the same time. This is a joint in October breathed new life into Section A1. In the period project of ECE, STRABAG and Bayerische Hausbau with up to December alone, the library drew more than some 43,000 square metres of retail space, 7,400 square 100,000 visitors, and it is expected to attract more than metres of office space, roughly 417 apartments and a a million each year in the future. Construction work on 160-room hotel. For those who will some day live and work another project, “Pariser Höfe”, is making good progress. in the new district, this project will be a considerable Work on its 250 apartments and the office wing with enhancement. approximately 8,000 square metres should be finished by the first quarter of 2012, and this too will bring new life Construction of the planned hotel and residential tower into the area. block at the corner of Heilbronner Strasse and Wolfram- strasse will start in late 2012; completion is expected in The next planned construction phases have also gained the second half of 2014. The planning for “Europe Plaza” momentum: Sparkassenakademie, a training institution is now complete, and construction will begin as soon as run by the German Sparkasse banks, is expected to sufficient advance rental agreements are in place. Most of complete a training centre by mid-2013. Covering the projects in Section A1 are thus ready to start or are 11,400 square metres, it will provide space for some already in progress. By late 2014, construction in this area 26,000 training course participants and have roughly should be finished except in site sections 4/5/12/15, at which 160 apartments for them too. In addition, the building time Stuttgart’s urban scene will have a new addition. will offer 1,200 square metres of office space. There is also a plan to include a day nursery in this complex, to serve the new Section A1. Construction of “Milaneo”
  9. 9. RENTAL VOLUME AT AN ALL-TIME HIGH.The economic upturn of 2011 allowed the Stuttgart office market to set an all-time record: the total rentalvolume for office space was 285,000 square metres, of which some 45,500 square metres were used byowner-occupiers. This represented a 47 percent improvement over the previous year’s strong results.CENTRAL BUSINESS DISTRICT DOUBLES ITS OUTLYING AREAS CONTINUE TO SHOWRENTAL VOLUME STRONG DEMANDStuttgart’s central business district, namely the area in the Demand was also strong in Vaihingen/Möhringen andcity ring between the main station, Theodor-Heuss-Strasse, Fasanenhof, the areas to the south. Two transactionsHauptstätter Strasse and Paulinenbrücke, almost doubled by Bosch, for about 12,000 and 4,000 square metres,its rental volume, which was 32,800 square metres in 2010. were especially prominent. To the north, Feuerbach andRental transactions by public institutions, which came to Zuffenhausen had another good year thanks to largeapproximately 35,000 square metres, accounted for a contracts signed by Bosch and Porsche, which are head-large part of this increase. The largest single transaction quartered there. In Bad Cannstatt a 6,000 square-metrein this period involved the relocation of the Ministry of transaction by Deutsche Telekom made a considerableEducation to the Postquartier, and amounted to about impact. Thus the eastern area of Stuttgart, which also14,000 square metres. includes Wangen and Hedelfingen, saw a 61 percent increase in office space over 2010. In contrast, Leinfelden- Echterdingen in the south experienced a decline in demand, as did Weilimdorf in the north.
  10. 10. 10 11 285,000RENTAL TAKE-UP OF OFFICE SPACE IN STUTTGART 2000 – 2011 IN SQ. M205,000 194,000 180,000 171,000 169,000 159,000 152,000 149,000 145,000 140,000 127,0002000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Research BANKHAUS ELLWANGER & GEIGER KG ©, figures as of 31 December 2011RENTAL TAKE-UP OF OFFICE SPACE IN GREATER STUTTGART IN SQ. M 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Central business district 25,350 19,000 4,600 55,100 33,300 43,000 61,500 44,400 38,200 32,800 63,000 City centre 25,710 45,000 28,400 21,700 43,200 31,300 46,600 41,700 83,800 66,600 97,500 Vaihingen/Möhringen 50,550 6,300 14,450 30,800 10,400 32,600 13,700 18,500 20,200 26,200 56,300 Fasanenhof 2,700 11,000 72,500 4,000 3,700 3,500 2,300 10,600 2,700 5,300 12,500 Feuerbach/Zuffenhausen 16,700 6,000 8,400 20,600 9,800 2,000 6,800 12,300 3,300 28,500 24,800 Degerloch 5,800 2,700 3,000 6,000 3,400 4,500 7,200 9,200 4,900 2,100 4,000 Weilimdorf 13,150 16,000 750 3,000 6,600 6,000 5,100 12,800 5,900 11,400 5,500 Bad Cannstatt/Wangen 5,000 18,000 14,000 7,700 24,600 13,500 15,400 12,500 8,100 8,300 13,400 Leinfelden-Echterdingen 14,040 3,000 2,900 3,100 10,000 3,600 10,400 18,000 3,900 12,800 8,000 Total 159,000 127,000 149,000 152,000 145,000 140,000 169,000 180,000 171,000 194,000 285,000 Source: Research BANKHAUS ELLWANGER & GEIGER KG ©, figures as of 31 December 2011
  11. 11. INCREASED DEMAND FOR OFFICE SPACE IN MANY SECTORS.The “industry” category played a significant role in the category, which accounted for 22,800 square metres of2011 office market. Transactions for a total of 45,000 rented space, also showed a decline, but the drop wassquare metres were concluded, including 32,000 square small and did not reflect a downward trend. By contrast,metres for Bosch alone. Of similar importance was the demand by financial service providers rose again, comingpublic sector, which had a demand of some 39,000 to 24,700 square metres, although their share of the totalsquare metres. The reason here was that one ministry turnover remained unchanged. The preferred locationsmoved to a new location while others reorganised them- for office space among both financial service providersselves on existing premises. As in previous years, however, and consultants were in the central business district andthe category with the highest demand was “other office city centre.users”, which included service providers like doctors,architects, engineers and retail companies. With around Users in the “media/communication” category reacted with115,200 square metres of office space they accounted for stronger demand for office space as the economy picked40 percent of the total rental volume. up. Advertising and media agencies profited from greater willingness among businesses to spend money on adver-Companies in the IT and telecommunications sector leased tising and marketing, and so increased the size of their27,400 square metres of office space, considerably less premises, especially in the segment up to 500 squarethan in the previous year. As a result, their share of the metres, bringing the total up to 10,900 square metres.total turnover came to only 10 percent. The “consultants” This represented a 38 percent gain over the previous year.TAKE-UP BY SECTORS IN % 2003 2004 2005 2006 2007 2008 2009 2010 2011 Media/communication 5.02 4 8 6.64 6.27 5.56 6.14 4.07 3.82 Financial service providers 8.04 34 12 9.93 10.36 15.78 8.36 8.41 8.67 Consultants 7.03 5 10 20.29 18.4 13.39 7.72 13.35 8.00 Public sector 4.02 9 21 3.21 17.75 7.22 30.41 8.14 13.68 Other 20.98 29 28 35.21 37.28 36.94 40.94 48.04 40.42 Energy/industry 52.23 9 13 12.86 – – – – 15.79 IT/telecommunications 2.68 10 8 11.86 9.94 21.11 6.43 17.99 9.62 Total 100 100 100 100 100 100 100 100 100 Source: Research BANKHAUS ELLWANGER & GEIGER KG ©, figures as of 31 December 2011
  12. 12. 12 13RENEWED INTEREST IN LARGE PREMISES.Small premises are still the mainstay of Stuttgart’s office market. Once again, most of the contractssigned were for surface areas up to 500 square metres. There were 249 transactions in this segment,27 more than in 2010. The total for the office market as a whole was 361.Of the transactions for less than 500 square metres, compared to four the previous year. This segment accounted142 were in the central business district and city centre. for 36 percent of the rental turnover.In Weilimdorf, almost all of the recorded transactionswere in this segment. In all, 21 percent of the total rented Leases in the range from 501 to 1,000 square metresvolume was in this size range. made up 16 percent of the rental turnover. There were 62 contracts, mainly for premises in the city centre and inBut in 2011 there was also demand for premises larger Vaihingen to the south. This is well above the previousthan 5,000 square metres, with the main interest coming year’s figure of 46.from the public sector and Robert Bosch GmbH. Thelargest contract of all, for 14,000 square metres, was There were 24 signings in the range from 1,001 to 2,000signed by the state of Baden-Württemberg. Porsche AG square metres, and 14 between 2,001 and 5,000 squareexpanded on its home turf, Zuffenhausen, with a trans- metres. Among the major owner-occupiers, AOK,action for 10,000 square metres. These developments Ed. Züblin AG and Sparkassenakademie made an impactled to a significant overall increase in demand for spaces by erecting their own buildings, which together account-above 5,000 square metres. There were 12 signings as ed for 31,000 square metres of space.COMPARISON OF NEW CONTRACTS BY SIZE 103,200 59,500 51,500 49,000 44,500 41,900 40,000 35,900 32,000 21,500 2010 2011 Total space 2010: Total space 2011: 194,000 sq. m 285,000 sq. m< 500 sq. m 501 – 1,000 sq. m 1,001 – 2,000 sq. m 2,001 – 5,000 sq. m > 5,000 sq. mCOMPARISON OF NEW CONTRACTS BY NUMBER 249 222 62 2010 2011 46 24 15 14 14 12 Total number 2010: Total number 2011: 4 301 361< 500 sq. m 501 – 1,000 sq. m 1,001 – 2,000 sq. m 2,001 – 5,000 sq. m > 5,000 sq. m Source for both charts: Research BANKHAUS ELLWANGER & GEIGER KG ©, figures as of 31 December 2011
  13. 13. RENTAL RATES EXCEEDING PREVIOUS YEAR’S LEVEL.The rental rates in Stuttgart’s office market showed an encouraging trend. On 31 December 2011,the city average was 11.60 euros per square metre, 0.60 euros above the level a year before.In the price segment up to 10.00 euros per square metre, actions for premises in new buildings, where rentsa total of 149 leases were signed, 65 of which were for between 17.50 euros and 22.00 euros per square metre8.00 euros or less per square metre. The latter, however, were achieved. The peak rent also rose in the city centre,were mainly for older office properties with simple fittings and at year’s end was at 15.90 euros per square metre.and equipment, or for leases with a short duration. A large The average rent, at 11.50 euros per square metre,proportion of the total contracts, 141, were in the range remained at the level of the previous year.from 10.01 to 13.00 euros per square metre. In the rangefrom 13.01 to 15.00 euros per square metre, there were FAVOURABLE DEVELOPMENTS IN THE SOUTH,46 signings, as compared to only 19 the previous year. NORTH AND EASTIn addition, there were 13 contracts between 15.01 and Thanks to strong demand, the peak rent in southern17.00 euros per square metre and 12 for more than 17.00 Stuttgart rose to 13.30 euros per square metre, exceedingeuros per square metre. the previous year’s value. At the same time the average rent fell slightly to 10.20 euros per square metre, mainlyCENTRAL BUSINESS DISTRICT AND CITY CENTRE: owing to rent reductions necessary for older premisesPEAK RENTS ON THE RISE that had been vacant for some time. In northern Stuttgart,In Stuttgart’s central business district the average rent the average rent showed a gratifying increase, thanksstayed at the previous year’s level of 14.30 euros, whereas especially to several major transactions in Feuerbach.the weighted top rent showed a marked increase, from Zuffenhausen and Weilimdorf, in contrast, continued to17.50 euros to 18.80 euros per square metre. In a have low rent levels. In eastern Stuttgart, a new projectfavourable development, there were about 12 trans- contributed to a rise in both the peak rent and average rent.PEAK AND AVERAGE CENTRAL BUSINESS DISTRICT RENTS 2000 – 2011 IN € / SQ. M • 18.80 • 18.41 • 18.00 • 18.00 • 17.89 • 17.50 • 17.50 • 17.50 • 17.50 • 17.00 • 17.00• 16.87 Peak rents 15.3414.90 14.80 14.50 14.50 14.50 14.50 14.30 14.30 13.60 13.60 13.50 Average rents2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Research BANKHAUS ELLWANGER & GEIGER KG ©, figures as of 31 December 2011
  14. 14. 14 15PEAK AND AVERAGE RENTS 2011 IN €/SQ. M 18.80 15.90 14.30 13.30 11.90 11.50 11.00 10.20 9.60 9.00 Peak rents Average rents XXXCentral busi- City centre Outlying districts Outlying districts Outlying districtsness district to the north to the east to the south Source: Research BANKHAUS ELLWANGER & GEIGER KG ©, figures as of 31 December 2011
  15. 15. MARKED DECLINE IN VACANT OFFICE SPACE.The supply of vacant office space declined significantly over the year. On 31 December 2011, some424,000 square metres were unoccupied, including roughly 24,700 square metres of sub-let space.With the total office space being about 7.43 million square metres, this corresponds to a vacancy rateof just under 5.7 percent.COMPLETION VOLUME IN SQ. M 312,000 Building completion Pre-letting 220,000160,000 145,000 143,500 130,000 131,500 115,600 109,500 104,900 80,000 68,500 57,000 51,400 49,000 50,500 45,900 42,400 40,000 41,200 41,500 32,600 28,500 23,400 22,000 22,200 5 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013In 2011, new premises totalling almost 31,300 square volume in some outlying areas, resulted in a shortage ofmetres were completed in Stuttgart and 14,600 square premises in certain cases. In Stuttgart’s central businessmetres underwent core renovation. However, most of this district the available supply declined by about 12,500space was already pre-let or quickly leased to new tenants. square metres to about 60,600 square metres. The cityMoreover, a large amount of sub-let space in the central centre saw an even sharper decrease: here the supplybusiness district was taken off the market. These two of office space with short-term availability dropped fromfactors, in conjunction with a surprisingly high rental about 116,900 square metres to 93,500 square metres.
  16. 16. 16 17VACANT OFFICE SPACE AS OF 31 DECEMBER 2011 Degerloch > 11,800 sq. m Bad Cannstatt, Wangen etc. > 19,300 sq. m B Wange e 3% Feuerbach, Zuffenhausen > 22,500 sq. m F 5% Stuttgart city centre > 93,500 sq. m 0 5 5% Vaihingen > 27,800 sq. m Va a 22% 7% 100% (corresponds s to approx. Fasanenhof > 31,000 sq. m 7% 424,000 sq. m) 0 q ) 17% 7%Leinfelden-Echterdingen > 73,500 sq. m 10% 14% Möhringen > 41,900 sq. m M Möhr Möhr 10% 0% 0% Stuttgart central business district > 60,600 sq. m district s district 0 sq Weilimdor f > 42,100 sq m Weilimdorf Weilimdorf sq. qSource for both charts:Research BANKHAUS ELLWANGER & GEIGER KG ©, figures as of 31 December 2011In southern Stuttgart there were some conspicuous shifts: In 2012, some 47,500 square metres of office space will bewhereas the available supply was reduced by half in completed. However, since almost 32,000 square metres ofVaihingen, Möhringen made considerable gains. In the this is already pre-let, the office market will gain hardly anynorth and east, there were no major changes because the new premises. In 2013, the situation might improve some-good rental volume was balanced by new vacancies. what because 110,000 square metres will be completed, of which about 50,500 square metres is currently pre-let.
  17. 17. NATIONWIDE UPTURN CONTINUING.In 2011, the positive trend from the previous year continued: throughout Germany, the rentalturnover in most office markets increased considerably. The supply of vacant office space declinedat almost all locations.The “Big Seven” showed a continued upward trend of As expected, vacancy rates in the “Big Seven” fell sharply15 percent. In 2011, the rental turnover for Berlin, Düssel- from the levels of the previous year. The main factor heredorf, Frankfurt, Hamburg, Cologne, Munich and Stuttgart was increased demand for modern office space, plus thecame to a total of 3.28 million square metres. The boom fact that premises in older buildings increasingly foundwas strongest in southern Germany, with Stuttgart post- tenants, albeit at much lower rates. Some areas are againing an increase of about 47 percent over the previous experiencing a shortage of office space owing to a ratheryear and Munich an increase of 45 percent. Düsseldorf low completion rate for new premises. This improves theand Frankfurt each showed declines in turnover of about prospects for construction in 2012. Thanks to a positive14 percent from the previous year. economic forecast and steady demand, most locations can currently reckon with favourable conditions for theMost cities benefited from a positive trend in rental rates. rapid implementation of new building projects.Increases in rental volume, coupled with a decline invacant office space, caused rates to rise at many locationsor allowed them to stay at the previous year’s level.The peak rents in Berlin, Cologne, Munich and Stuttgartincreased by 1.00 euro and more per square metre.Average rents held steady as well.

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