Industrial and Logistics Market Report 2012

1. INDUSTRIAL AND LOGISTICS PROPERTY
STUTTGART REGION
MARCH 2012

2. 2
THE STUTTGART ECONOMIC REGION.
direction Heilbronn
County of Ludwigsburg
direction Karlsruhe County of Rems-Murr
Ditzingen
Weilimdorf
Esslingen
County of Göppingen
County of Böblingen County of Esslingen
direction Munich
County of Tübingen
direction Singen
industrial and logistics cluster*
* logistics space > 50,000 sqm
industrial space > 100,000 sqm

3. 3
MARKET TRENDS.
BOOMING INDUSTRIAL AND LOGISTICS Especially counties along the A 81 motorway (Ludwigsburg,
The Stuttgart Region is booming. The automotive industry Böblingen), continue to lead the way. By far the largest
as well as mechanical engineering are back on track with growth in logistics space could be observed in these two
sustainable growth and excellent prospects. counties. This increase in logistics space was generated by
expansions of local companies as well as new settlements.
This can be seen in high bonus-payments for automotive Proximity to major industrial estates of the Stuttgart Region,
employees, as well as a strong demand for industrial and in combination with excellent traffic links to nationwide
logistics property. speed- and motorways, were strategic advantages for the
counties of Ludwigsburg and Böblingen. Furthermore,
these counties have adopted settlement and logistic-friendly
LOGISTICS IN THE WAKE OF INDUSTRY policies, which is reflected in a sufficient supply of suitable
The strong economic background of the Stuttgart Region plots at an adequate price.
and the high density of logistics have intensified the
d
­ emand for modern logistics space. On the one hand, Despite high demand not only for respective plots, but
i
­ndustrial companies strive for highly-efficient supply chains, also for flexible existing properties, the growth of modern
on the other hand a continued trend for outsourcing of logistics property along the A 8 motorway (Munich –
production processes to logistics service providers can be Karlsruhe) has been lagging behind its potential. This
observed. n
­ egative trend is the result of restrictive zoning policies
on the one hand, and above average land prices on the
Such close ties between industrial and logistics are other hand. As a consequence, all major new settlements
c
­ haracteristic for the economic Region of Stuttgart. where either placed outside the Region of Stuttgart (Ulm,
Augsburg, Karlsruhe) or along the A 81 motorway.
Despite these positive economic trends, not all communities
within the Stuttgart Region will benefit from a booming ECONOMIC ATTRACTIVNESS IS NOT A GIVEN
industrial sector. The successful clustering of industrial and logistics
c
­ ompanies has generated sustainable economic growth in
A survey by Bankhaus Ellwanger & Geiger has found a the Stuttgart Region. To secure this positive trend for the
widening gap between the counties of the Stuttgart Region future, local authorities, companies and investors will need
concerning the settlement of modern logistics between to intensify their cooperation. The importance of industrial
2009 and 2012. and logistics settlements will need to be communicated
to the public and local residents will need to be involved
in all stages of the planning process.

4. 4
FACTS AND FIGURES.
SPACE TURNOVER TRANSACTION-STRATEGIES
In 2011, the letting volume of industrial and logistics ❚❚ Owner occupancy
space in the Stuttgart Region has reached 165,000 square ❚❚ Partial demolition/new development
metres, compared with 195,000 square metres in 2010. ❚❚ Demolition/new development
Approx. 79 per cent of the total space turnover resulted
­
from lettings of existing property. The remaining 21 per The largest transactions in this sector were the selling of
cent of leases were placed in newly built properties, for NXP-Areal in Böblingen with approx. 220,000 square
examples 5,000 square metres in Weilimdorf or 25,000 m
­ etres, the EllringKlinger commercial site in Ludwigsburg
square ­ etres in Böblingen and Untertürckheim.
m with ­ pprox. 140,000 sqm, as well as the brick works of
a
­Winnenden with approx. 60,000 square metres and the
Of that space turnover, brokers marketed approx. Coperions Areal in Stuttgart with approx. 45,000 square
117,000 square metres, which corresponds to ­ pprox.
a metres.
71 per cent of the total volume. With a market share
of 25 per cent, Ellwanger & Geiger continues to be RENTS
market leader. Average net rents for industrial and logistics space rose
s
­ ignificantly from € 4.50 per square metres in 2010 to
Counties with the largest space turnovers: € 4.70 per square metres in 2011. This increase is a result
❚❚ Esslingen approx. 49,000 sqm of a continuous demand as well as shortage of ­ndustrial
i
❚❚ Böblingen approx. 35,000 sqm and logistics space in the Stuttgart Region. The average
❚❚ Ludwigsburg approx. 33,000 sqm lease duration for existing properties lies between 3 to 5
years – 7 to 10 years for newly built property.
In 2011 the transaction volume of developed plots and
industrial sites reached approx. 603,000 square metres. Like in 2010, peak rents reached € 6.20 per square metres
for newly built logistics space.
Range of net rents Average net rents
trend 2012/2013
€ per sqm € per sqm
County of Böblingen 4.50 – 5.50 5.00
County of Esslingen 3.30 – 4.70 4.00
County of Göppingen 2.80 – 3.60 3.20
County of Ludwigsburg 3.80 – 5.50 4.70
County of Rems-Murr 3.00 – 3.70 3.40
Stuttgart 5.00 – 5.30 5.10
Total 4.70
Source: BANKHAUS ELLWANGER & GEIGER KG ©, March 2012 all prices above are per month

5. 5
Informations
about Investments
Investment.
Top yield for commercial properties in %
11.0
10.0
9.5 10.5 10.5
9.0
8.0 8.0
7.5
7.0 7.2 Logistics
7.0 Special Retail Centres
7.5 7.5 7.5 7.5
6.0 7.0
5.5 5.25 5.5 5.5 5.5 5.5
5.0 Office
Office and Retail Buildings
4.0 5.0 5.0 5.0 5.0 Prime-Location
4.6 4.6
3.0
2.0
1.0
0
2006 2007 2008 2009 2010 2011 2012
Source: Research Bankhaus Ellwanger & Geiger KG ©, March 2012
INVESTMENT OUTLOOK FOR 2012/2013
A major trend from 2010 has been continued, as predomi- From the third quarter 2012 to the first quarter 2013
nantly private investors were active on the market and e
­ xtensive newly built logistics properties will be completed
bought existing industrial sites with potential for new and ready to be listed. Currently more than 50 per cent
d
­ evelopments. Demand of institutional investors for core of these spaces are pre let. Ellwanger & Geiger will
property has been high, but could not be met by suitable e
­ xclusively market a total of approx. 45,000 square metres.
investment opportunities. Only few institutional investors However, this will not be enough to satisfy the demand for
were looking for brown fields with upside potential. modern logistics space.
On the supply side, no suitable products where placed on Against the backdrop of a continuously high demand in
the industrial and logistics markets at all. New develop- combination with the completion of newly built logistics
ments, no matter if initiated by private or institutional property, we expect average rents to rise in 2012/2013
i
­nvestors were held in the portfolio of the respective and forecast peak net rents for newly built logistics space
i
­nvestor. Only one transaction, in the County of Rems- to the amount of € 6.50 per square metres
Murr, with more than 10,000 square metres of logistics
space, reached an ­nitial yield of 8 per cent.
i Top letting volumes are to be reached in Ludwigsburg
County, due to:
Due to this lack of products and transactions, prime yields ❚❚ Available plots
cannot be forcasted at present. For any selling of core ❚❚ Adequate ground values
products, Ellwanger & Geiger expects an initial yield ❚❚ Excellent infrastructure
of less than 8 per cent. ❚❚ Company friendly policies

6. 6
our services.
Geschäftsbereich
Industrial And
Industrie
­Logistics
und Logistik
Immobilien-
Vermietung/
Letting/Sale Investment Consulting Research Valuations
wirtschaftliche
Verkauf
Einschätzungen
your contact partners.
The industrial and logistics sector has its own characteristics. In this field, you should rely on specialists who know the
requirements for buildings, infrastructure and property down to the last detail: ELLWANGER & GEIGER Privatbankiers.
You will benefit from our expertise, our long-standing experience and our comprehensive services.
Our team in Stuttgart looks forward to your call or visit. You can reach us at: Phone +49 (0)711/2148-286
or Fax +49 (0)711/2148-290.
Information on the Internet: www.privatbank.de
Markus Knab Alexander Fink Moritz Weeber Kathrin Ziegler
Team Manager, Industrial and Consultant, Industrial and Consultant, Industrial and Assistant Industrial and ­
­Logistics Properties ­Logistics Properties ­Logistics Properties Logistics Properties
Phone +49 (0)711/2148-227 Phone +49 (0)711/2148-261 Phone +49 (0)711/2148-383 Phone +49 (0)711/2148-286
Markus.Knab@privatbank.de Alexander.Fink@privatbank.de Moritz.Weeber@privatbank.de Kathrin.Ziegler@privatbank.de

7. 7
Informations about
ELLWANGER & GEIGER Real Estate
Ellwanger & Geiger Real Estate.
ELLWANGER & GEIGER Real Estate offers you a one-stop shop for a comprehensive range of services
r
­ elating to the asset class of real estate. With the very highest discretion and integrity, we enable
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.
COMMERCIAL PROPERTY FUNDS & ASSET MANAGEMENT Our Locations
Extensive research is the basis for our We plan individual real estate invest- Head office Stuttgart
analyses of locations, portfolios and ments and create special funds for Börsenplatz 1
cost-effectiveness that reflect market i
­nstitutional investors and professional 70174 Stuttgart, Germany
conditions. From this, we derive private investors (family offices). Phone +49 (0)711/2148-286
strat­ gies whose goal is to capitalize
e Each investment approach is devised Fax +49 (0)711/2148-290
on potentials for earnings and effi- in close consultation with the customer. www.privatbank.de
ciencies. An investment volume is selected
that permits niche investments and Branch office Munich
Apart from comprehensive leasing individual mandates. By creating Herzog-Rudolf-Straße 1
services, our core expertise includes portfolios for single investors or small 80539 München, Germany
project consulting and transaction groups, we are able to provide indi- Phone +49 (0)89/17 95 98-0
business. We adopt a holistic approach vidual support for the duration of the Fax +49 (0)89/17 95 98-55
in consulting on real estate invest- investment. Different investment www.privatbank.de
ments: we partner you all the way – v
­ ehicles are selected depending on
from the development of market­ng
i the needs and product preferences
s
­ trategies, 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
Research Act (KAGG)
Investment analysis and ­ onsulting
c
Closed investment models
Transactions, renting and leasing (KG, GmbH)
of office, retail, industrial and
Luxembourg security funds and
logistics facilities special funds, SICAV, SIF
Individual schemes for offshore
­investors
OUR OTHER PUBLICATIONS
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can be obtained free of charge from:
Kathrin.Ziegler@privatbank.de

8. Disclosure
The data for this market report has been sourced directly from city and
c
­ ommunity authorities, as well as from realtors and owners. Our contact
partners received standardised questions concerning quantitative factors
like rental price, standard ground value, plot size and space turn-­ ver, as
o
well as the prospects for the future. The quality of the answers to our enquiry
varied significantly. Some values were estimated, some data was incomplete.
However, this survey offers an overview of the current trends and develop-
ments in the industrial and logistic sector of the Stuttgart Region.
Bankhaus Ellwanger Geiger KG
Real Estate
Börsenplatz 1, 70174 Stuttgart, Germany
Phone +49 (0)711/2148-286, Fax +49 (0)711/2148-290
www.privatbank.de