The market for developed sites
Warehouse takeup
In terms of takeup rate, the Düsseldorf region – one of Germany’s “big five” conurbations (Berlin, Düsseldorf, Frankfurt am Main, Hamburg and Munich) – largely escaped the effects of the global financial crisis in 2008. Takeup volumes hit another record high, this time reaching 242,500 m² – a 10 % rise from previous year.
However, the recession bit hard in the first six months of 2009 with industrial real estate suffering a 56% drop in the Düsseldorf region.
Takeup within the Düsseldorf city limits, which had been dominated by the large-scale rentals of logistic units in Rath in 2006 and 2007 (Yusen Cargo, ComPass, Hoberg & Driesch), returned to the average rate experienced from 2003 to 2005. Takeup in 2008, a year which saw no major rental agreements, reached a level of 24,000 m².
At 9,200 m2, the first six months of 2009 also saw a fall in takeup within city limits – albeit not as dramatic as in the surrounding region. This can certainly be put down to the economic climate and the somewhat reticent behaviour of commercial companies regarding development strategies. On the other hand, there is a steady demand for warehouse space – particularly in the logistics sector – that cannot be fulfilled due to the limitations of the market itself: only around 20% of total logistics real estate in the region is located within the city (Düsseldorf Rath, harbour and Düsseldorf Reisholz).
Rents
Despite the drop in take-up, rent revenue for warehouse space is stable, with rents ranging from 3.75 to 5.40 euros per square metre. Northern Düsseldorf and the airport district in particular continue to score the highest prices. But compared to other metropolitan areas like Munich, Frankfurt, Hamburg and Berlin, Düsseldorf still offers good value and moderate rates.
Contrary to expert opinions, expectations that rental prices would fall in the wake of the economic situation have failed to realise. This is mainly down to the limited availability of properties and the absence of speculative developments – banks are currently unwilling to provide financing for such developments. In addition, many property owners prefer to let their properties remain vacant to avoid valuation problems with their financers.
Submarket: properties for sale
Similar to the submarket for undeveloped sites, the number of transactions on the submarket for developed commercial properties (existing buildings for manufacturing, workshops, warehousing, petrol stations and retail) has also regressed since 2006.
Im VIn comparison with 2007, which saw 22 sales, activity fell by 8 %, with a mere 18 sales registered in 2008. The level of takeup even declined by 35 % compared with the previous year, to 162,160 m². At the same time, revenue decreased from 52.0 million euros to around 44.0 million euros (./. 8.5 %).
The majority of these transactions – 14 of the 18 closed in 2008 – occurred during the first six months of 2008. Leaving aside routine commercial property sales (mostly of existing buildings used for warehousing and workshops), the majority of revenue during this period came from three large-scale acquisitions: Sirius Facilities bought an industrial estate in Heerdt (approx. 3 ha) as well as the former production site belonging to Wotan Werke (approx. 3.6 ha) in Holthausen. EPITEC Gamma, a group of private investors, acquired the former Gottwald production site (approx. 3.9 ha) in Holthausen.
Unlike the rental market, the property investment market began to suffer from the financial crisis as early as the second half of 2008. Only two smaller sales plus a further two company-internal transactions in the area of large-scale retail were registered.
Figures from 2009 indicate that the trend of limited willingness to invest is set to continue: a mere 7 sales involving a takeup of around 18,000 m² and revenue of just 4.35 million euros have so far been transacted.
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