MARKET REPORT Stuttgart First Half 2016
Office Leasing Investment Retail Industry & Logistics
Accelerating success.
Office Leasing
Stuttgart IN NUMBERS
Population
606,382
Unemployment Rate
5.3 %
Employed and paying Social Security Contributions
395,077
Trade Tax Multiplier
420 %
Per Capita Disposable Income
25,250 €
Sources: Stadt Stuttgart, Bundesagentur für Arbeit, Nexiga GmbH
Take-up
Fast Facts OFFICE LEASING (INCL. LEINFELDEN-ECHTERDINGEN)
Office Take-up
107,800 sq m
Leasing Take-up
106,700 sq m
Prime Rent
22.80 €/sq m
Average Rent
12.30 €/sq m
Office Space Stock
7.7 Mio. sq m
Vacancy Rate
High demand characterized the Stuttgart office leasing market during the first half of 2016. Take-up lagged behind the first half of the prior year due to lower activity by owner-occupiers and fewer large space deals.
The positive trend in the Stuttgart office leasing market (including Leinfelden-Echterdingen) continued in the first half of 2016 with leasing activity high at 152 deals signed – a repeat of HY 1 2015. These deals were split exactly between the first and second quarters with 76 premises let in each of these periods. Looking back at the past five years
3.3 %
Take-up per 1,000 sq m 300 250 200
38
86
65
9
150
1
100 50 0
182
220
193
2012
2013
2014
Leasing
2
226
107
2015
H1 2016
Owner-Occupiers
Market Report Stuttgart | First Half 2016 | Market Report Office Leasing Investment Retail Industry & Logistics
however, take-up was only average at 107,800 square meters. Compared to the record result achieved in 2015, take-up dropped by more than 25%. Owner-occupiers were almost nonexistent during the first half of 2016 and large space deals were few and far between. The market was free of owneroccupiers in the second quarter. Net absorption (excluding owner-occupiers) was actually above average at 106,000 square meters and exceeded the good result achieved in the first half of 2015 (100,600 square meters). As in recent years, the lion’s share of all leasing deals were signed for space in Stuttgart’s central locations. In the first six months of 2016, 51 leases were signed in the submarket City and 45 in the submarket City Center. These two submarkets alone accounted for close to two thirds of all lease contracts in the office sector. Central locations took a lower share of total take-up (37%). This is due to the the fact that the few large deals that were signed in the segment over 5,000 square meters were all for space located in peripheral areas of Stuttgart. Stuttgart-Vaihingen scored a big deal with the lease of 13,700 square meters (of a total of 18,800 square meters) of space to Swedish plastics company (Trelleborg), resulting in above above take-up. Vaihingen even outpaced downtown Stuttgart during half year 1 2016. Take-up was also good in Stuttgart-Weilimdorf (lease by an insurance company for 9,800 square meters) and Stuttgart-Feuerbach (deal signed by Robert Bosch GmbH for 9,300 square meters). Both of these submarkets recorded total take-up of more than 14,000 square meters. Although only three leases were signed for more than 5,000 square meters during the first half of 2016, this segment still came in first with the highest total take-up (32,800 square meters). In comparison to the same period in the prior year, the market share for this segment of total space leased dropped from 48% to 30%. The leases in the segment up to 500 square meters registered second with 28,800 square meters of space taken up. This segment accounted for 104 deals and more than two thirds of all leases.
Supply and Vacancies Vacancies have been on the decline consistently on the Stuttgart office leasing market since 2010, reaching a new low at the end of June 2016. Only 252,000 square meters of total space stock of 7.7 million square meters was recorded as being available for rent. The vacancy rate dropped even further from 3.3% at the end of 2015 to 3.1%, the lowest vacancy rate for office space in Stuttgart since 2002. Available space has dropped significantly during the past 18 months – especially in central locations. At the end of 2014, recorded space available in the submarkets City and City Center was 118,000 square meters. At the end of half year 1 2016, availability dropped further to a mere 75,000 square meters. Stuttgart also shares the lead with Berlin for lowest vacancy in comparison to the other top 7 real estate locations in Germany. This development is due to continued high demand for office space in the capital of Baden Württemberg as well as preleasing rates of more than 80% for new construction to be completed in 2016 and 2017. Examples include developments such as Airport City at the Stuttgart International Airport and the Design Office Towers in Fasanenhof – both construction projects that are almost completely leased. In addition, „Dorotheen Quartier“ and „Europe Plaza“ – both expected to reach completion by the end of 2017 – will come on the market with a total of 40,000 square meters of space. Tenants are already on board for most of the space available in these two new large projects.
Demand As in prior years, market activity was driven primarily by manufacturing companies in the first half of 2016. This segment alone accounted for 35,000 square meters of total take-up, even though the market share dropped from 48% in 2016 to 33% in the current quarter. Demand by manufacturing entities generated most deals for large space leases in the past. The drop in take-up in this segment is
Market Overview Locoation
City-Center
1
Take-up including Owner-Occupiers
Leasing Performance
23,500 sq m
23,500 sq m
Sustainable Rents(1)
Average Rents
Vacancy
Completions in 2016
(3)
€16.40 per sq m
43,800 sq m
1,600 sq m
€12.30 per sq m
31,200 sq m
15,200 sq m
€10.00-24.00 per sq m
16,800 sq m
16,800 sq m
€8.50-18.50 per sq m
(3)
14,100 sq m
14,100 sq m
€9.50-12.50 per sq m
(2)
€12.00 per sq m
12,500 sq m
43,000 sq m
14,000 sq m
14,000 sq m
€8.50-11.50 per sq m
(2)
€10.00 per sq m
21,100 sq m
21,000 sq m
4,900 sq m
4,900 sq m
€8.50-10.50 per sq m
(2)
€9.60 per sq m
18,100 sq m
0 sq m
8
18,800 sq m
18,800 sq m
€7.50-16.50 per sq m
(4)
€11.90 per sq m
21,800 sq m
23,500 sq m
9
3,100 sq m
3,100 sq m
€10.00-12.00 per sq m
(2)
€10.70 per sq m
9,800 sq m
0 sq m
City
2
Zuffenhausen
3
Feuerbach
4
Weilimdorf
5
Bad Cannstatt
6
Wangen
7
Vaihingen Degerloch Möhringen
10
2,100 sq m
2,100 sq m
€8.00-13.50 per sq m
(2)
€11.10 per sq m
28,400 sq m
8,300 sq m
Fasanenhof
11
5,100 sq m
4,000 sq m
€8.50-13.50 per sq m
(3)
€12.00 per sq m
17,400 sq m
12,000 sq m
Leinfelden-Echterdingen 12
5,400 sq m
5,400 sq m
€9.00-16.50 per sq m
(3)
€11.20 per sq m
48,100 sq m
44,600 sq m
107,800 sq m
106,700 sq m
€12.30 per sq m
252,200 sq m
169,200 sq m
Total (1)
Rents attained in € per sq m during the past 12 months (2) Existing Buildings (3) Existing Buildings & New Construction (4) Existing Buildings & High-Rises
Research: Alexander Rutsch,
[email protected] | Colliers International
3
therefore directly correlated to the decrease in the number of leases signed in the segment over 5,000 square meters. Consulting firms came in a far second with 19,100 square meters. This business segment accounted for the most deals signed (46) in the first quarter. The information and technology sector was also very active with 11,500 square meters taken up and 26 deals signed. In addition, the areas public administration, organizations and churches were active with 11,500 square meters and 12 leases.
33
8
4
3
10,900
10,800
32,800
30
104
24,500
40
28,800
Office Space Take-up by Size (in sq m and %) and Number of Leases
20
Rents
10 0
27%
23%
10%
10%
30%
up to 500 up to 1,000 up to 2,000 up to 5,000 from 5,001 Take-up
Number of Leases
Take-up by Segment – Top Five in sq m and Share of Total Take-up (in %)
35,200/33% 19,100/18% 10,500/11% 10,500/11% 8,400/8% 0
5
10
15
20
Manufacturing Industry Consulting Firms Information and Telecommunication
25
30
35
Publ. Admin./Organiz. Churches Insurances
Prime and Average Rents (in € per sq m)
4
Average rents, now coming in at €12.30 per square meter, have remained unchanged as compared to the previous quarter. Quarter on quarter 2016 to 2015, average rents were up by a small margin from €12.20 per square meter to €12.30 (+1%). Although just one deal for 900 square meters was signed in the most expensive segment over €20 per square meters during the first half of 2016, the top rent price was confirmed at €22.80 per square meter at June 30, 2016, the same as in the previous quarter. The lease contracts signed during the past 12 months serve as the basis for this calculation. This continues to be the highest rent price ever recorded in the Stuttgart office market.
Property Index IMMAX 22.80
20.00 20.00
21.50
22.80
12.40
12.00
12.60
12.10
12.30
2012
2013
2014
2015
H1 2016
Prime Rent
Since 2015 we have observed an increasing supply shortage on the Stuttgart office leasing market. This is directly correlated to the decrease in number of leases signed in the rent price segment under €10 per square meter. Only 20% of total take-up or 21,100 square meters could be rented for less than €10 per square meter – a decrease of 15% as compared to 2015. In contrast, take-up rose in the price segment between €10 and €12.50 per square meters significantly. The share of total take-up in this price segment increased from 20% to 50%. We currently see rent price fluctuations – to some extent considerable –at the submarket level. Furthermore, the submarket LeinfeldenEchterdingen is not comparable with other submarkets as it is home to the airport. Top rents and average rents in the airport vicinity range between €16.50 and €18.50 per square meter – considerably higher than yields in the surrounding areas.
Average Rent
The Property Index, “IMMAX” for short, illustrates the development of the supply and demand situation in the market for office space in Stuttgart including LeinfeldenEchterdingen. The index represents the ratio of supply to turnover of office space for the previous 12 months. It is, therefore, possible to make a statement concerning time-comparative trends. Supply takes into consideration both vacancies at the beginning of the year as well as the space which will potentially become available through the completion of new buildings in addition to existing space becoming vacant within a period of 12 months. The volume of office space lease take-up during the previous 12 months is included in the calculation of absorption. Office
Market Report Stuttgart | First Half 2016 | Market Report Office Leasing Investment Retail Industry & Logistics
Summary and Forecast
420 350 280
5.4%
210
4.9%
4.2%
0
3.3% 252
70
3.5% 270
140
314
The Property Index “IMMAX” has been falling since the beginning of 2014. We have observed continual decline since 2015 to the now record low of 1.2 as of the end of the first half of 2016. While the increase in the IMMAX in 2012 and 2013 was caused by the fact that absorption could not compensate for the increase in space available, the current decrease in the IMMAX – especially since the beginning of 2015 – points to a shift in the trend with dropping vacancies and an increase in take-up. This is reflected in a high level of take-up for the quarter just ended which is accompanied by consistently falling vacancies. Due to the above average preleasing rates until the end of 2017, we expect the Property Index to remain low.
365
IMMAX 7/2016 = 267,900 sq m = 1.2 232,100 sq m
Vacancies (in 1,000 sq m) and Vacancy Rate (in %)
398
space occupied by owner-occupiers has not been taken into account.
2012
2013
2014
2015
H1 2016
Property Index IMMAX
The first half of 2016 was marked by high activity on the Stuttgart office leasing market. Absorption of 106,700 square meters continued the trend from prior years, whereby take-up lagged behind 2015 levels due to the lack of owner-occupiers and large space deals. It is becoming more and more apparent that the low supply of space available has an increasingly negative impact on fluctuation within the Stuttgart office leasing market with the result that overall absorption lagged behind its full potential. Due to a significant decrease in the number of deals in the lower rent price segment, the limited supply of high quality space alone is not enough to fuel any further increase in top rents and average rents. We expect a lively office leasing market in Stuttgart during the rest of 2016 and total take-up is expected to be well above 200,000 square meters.
4.3 2.9 2.4 2.0 1.8 2.3 3.1 1.6 1.3 1.7 1.6 1.3 1.2
7/10 1/11 7/11 1/12 7/12 1/13 7/13 1/14 7/14 1/15 7/15 1/16 7/16 0
1
3
2
5
4
Completion Volume (in 1,000 sq m) and Pre-Let/Owner-Occupied 200
169
150 100 50 0
81
113
75
37
73 37
75
503
565
792
641 148
252 93
2013
2014
2015
2016
2017
Completion Volume
Pre-Let/Owner-Occupied
Research: Alexander Rutsch,
[email protected] | Colliers International
5
Investment Transaction Volume The Stuttgart real estate investment market picked up in the first half of 2016 where it left off last year. After transaction volume of €355 million was recorded right off the bat in Q1, Q2 ended with an additional €357 million. The second quarter ended with transaction volume of €712, a further 10% increase as compared to the already above average result achieved in 2015. Year on year the same number of transactions were recorded for the half year at 35. Commercial investments made up the largest share of transactions with a volume of €660 million. An additional €50 million was invested in residential properties such as the sale of „Löwentor Studios“ from EEW to Hamburg Trust and the community clinic (kommunale Klinik) staff housing acquisition by Stuttgarter Wohnungs- und Städtebaugesellschaft (SWSG).
Alexander Rutsch Dipl.-Geograph | Senior Consultant | Research Colliers International Stuttgart GmbH Königstraße 5 D – 70173 Stuttgart TEL +49 711 22 7 33-0
Buyer and Seller Groups Stuttgart real estate investment market still barrels ahead at full throttle, exceeding the very high transaction volume recorded during first half of last year.
Fast Facts INVESTMENT
Transaction Volume
€663 million
Largest Buyer Group: Open Property Funds/Special Funds
44.9 %
Größte Verkäufergruppe: Projektentwickler/Bauträger
30.9 %
Nachgefragtester Immobilientyp: Büro
46.0 %
Spitzenrendite Büro
4.3 %
1.70
1.5
1.13 1.0
0.93
Investment Properties
1.00 0.66
0.5 0.0
6
2012
2013
2014
Open real estate funds and special funds were especially active investing almost €300 million or 45% of the total transaction volume. The large share attributable to this investor group relates to several large volume investments in the risk averse core segment. Notable examples are the sale of “Europe Plaza” by Fay Projects to Real I.S. for more than €85 million and the sale of „Kronprinzbau“ by DFH to Hines Immobilien for more than €55 million. Private investors and family offices came in second place with total investment volume of €130 million. This investor group focused on the acquisition of a prime downtown office building “City Plaza” by a Spanish family office from HIH. The purchase price for this premium commercial building on Rotebühlplatz with office, retail and warehouse space exceeded €85 million. Project developers achieved the main share of transaction volume on the seller side with €205 million in properties sold. The largest property sold was “Europe Plaza”, a development in downtown Stuttgart scheduled for early 2017 completion. As on the buyer side private investors and family offices were second among sellers landing €110 million in the first six months of this year.
Transaction Volume (in billions of €) 2.0
In addition to what appears to be a never ending low interest environment, the economic stability in Stuttart (capital of Baden Württemberg) and the historic low in office space vacancy rates is fueling demand for real estate investments by both domestic and foreign investors.
2015
H1 2016
In view of a lack of project developments and new construction, investment activity was limited mainly to existing properties during the first six months of 2016. At the same time, we observed a significant increase in land sales as compared to the prior year. Investors took advantage
Market Report Stuttgart | First Half 2016 | Market Report Office Leasing Investment Retail Industry & Logistics
of forward funding models or forward purchases as a way to work around the limited supply situation and secure investment opportunities early on. As in prior years, the asset class office buildings was able to grab 46% of total transaction due to the high volume of individual properties coupled with the product available on the market in this segment. Mixed-use properties followed at some distance (especially downtown commercial buildings) with 16%, retail only properties took a 10% share and hotels 7%. No notable transactions were realized in either the industry or logistics segments due to chronic low supply of properties. Investors focused on city center investments in the core segment during the first half oft he year. As a result, yields dropped again slightly in this risk averse segment. As of midyear, top yields for prime locations in the core segment were 4.3% for office properties, 3.9% for city center commercial buildings and 5.7% for modern logistics properties. Very low yields from the prior year were confirmed In the core plus and value add segments.
Summary and Outlook
Transaction Volume by Buyer Groups (Millions of €), Share (in %) 300
45%
200
100 0
20% 16% 7% Open Property Funds/ Special Funds Private Investors/ Familiy Offices Project Developer
5%
Corporates Opportunity Funds/ Private Equity Funds
Transaction Volume by Seller Groups (Millions of €), Share (in %) 240
For the third time in a row, commercial transaction volume on the Stuttgart real estate investment market reached €500 million at the half year mark. Extremely limited supply across all asset classes put the brakes on even higher transaction volume. Yields eased further down as compared to yearend 2015 and investors siezed the opportunity to realize gains after relatively short holding periods. Transaction activity flourished as a result. The brisk activity in turn enabled the high transaction volume. We expect investment dynamics to continue on at an above average level in view of a continuing favorable economic environment. Projected transaction volume for 2016 should reach the historic high of more than €1.5 billion set last year. We do, however, expect a moderate decline in top yields.
31%
180 120 60
16% 16%
0
Project Developer Private Investors/ Family Offices Open Property Funds/ Special Funds
12%
8%
Corporates Closed Property Funds
Types of Properties (in %) Hotel
Other
Industry/Logistics
< 1%
7 1
Retail
10 46 Mixed Use
16 Office
20 Land Parcels
Research: Alexander Rutsch,
[email protected] | Colliers International
7
Retail Fast Facts RETAIL
Revenue Index
153.4
Purchasing Power Index
110.5
Retail Revenue in millions of €
4,279
Centrality Index
138.8
Premium Rent
€320.00 per sq m
International retail and restaurant chains show highest demand for retail space Everyone is talking about the Dorotheen Quartier. The most important retail development project in recent years in the premium segment is almost fully leased. The 30 new shops on 11,000 square meters of retail space will shed new light on Stuttgart as a major shopping destination.
Supply Growth in retail space is reaching its limits due to overall market saturation. Falling space productivity caused by the increase in online shopping is forcing some retailers to move out of their locations prior to the end of the lease. This has created a “tenant market” in some markets in Stuttgart.
Demand Whoever ventures out onto Königstrasse during normal business hours cannot be afraid of masses of people. Footfall remains high in the important Stuttgart downtown retail neighborhoods. Footfall decreased temporarily subsequent to the opening of the Milaneo shopping center. This is now history. The shoppers are back in the city! It’s no surprise, that the Karstadt project on Königstrasse 27 will soon be home to such well-known tenants as Primark, Vodafone and the drugstore chain dm. While most German chain retailers are currently hesitant, there is high demand for retail space among international retailers.
Market Outlook Traditional Stuttgart City Center retailers are accepting the challenge caused by increased competition created by both the new shopping centers and the ever-increasing online commerce. We believe the development Dorotheen Quartier will strengthen Stuttgart as a retail location even more.
8
Market Report Stuttgart | First Half 2016 | Market Report Office Leasing Investment Retail Industry & Logistics
Industry & Logistics Take-up Continued high demand characterized the market for industry and logistics space in the Stuttgart region during the first half of 2016. Take-up of 63,000 square meters (excluding owner-occupiers) could not keep pace with 2015 (take-up reached 106,000 square meters), however, due to extremely limited supply. The decrease of more than 40% is mainly attributable to two large deals alone which accounted for 54,000 square meters in 2015. During the first half of 2016 the largest deal was for a total of 8,000 square meters and relates to a machinery manufacturer in Großbottwar. Manufacturing companies were very active during the first half of this year accounting for more than half of total take-up (35,000 square meters). The logistics and shipping segment came in second place with 17,400 square meters of take-up. Online trading enterprises took-up an additional square meters.
Demand for industry and logistics space in the Stuttgart region continued to outpace supply during the first half of 2016. As a result, leasing performance could reach its full potential while rents stagnated at a high level.
Fast Facts INDUSTRY/LOGISTICS
Take-up
63,000 sq m
Top Rent*
€6.20 per sq m
Average Rent
Supply and Demand
€4.80 per sq m *erzielbare Spitzenmiete im Neubau bei Erstanmietung
Modern industry and logistics space with excellent access is a rare commodity in Stuttgart. Meanwhile the demand for such space is extremely high. The excess of demand over supply is most noticeable in the segment above 10,000 square meters. Customers are increasingly looking for the possibility to consolidate space, while at the same time the majority of available logistics spaces are small and not connected. In addition, much of the logistics space available is structurally deficient. As a result, many owner-occupiers developed or purchased their own logistics space during recent years. We expect this trend to continue in the medium-term due to the moderate project pipeline. Interesting new logistics projects are under development primarily outside the Stuttgart region on account of poor construction site alternatives combined with low probability of realization. In addition, we have observed the extension of current leases for industry and logistics space due to lack of alternatives. This, in turn, inhibits building up a space reserve for possible moves, which is a major deterrent to commercial flexibility.
Sustainable Rent STUTTGART AND REGION
Stuttgart
€3,90-5,90 per sq m
Ludwigsburg
€3,80-5,70 per sq m
Rems-Murr Kreis
€3,80-4,50 per sq m
Göppingen
€3,50-4,40 per sq m
Esslingen
€3,90-5,80 per sq m
Böblingen
€4,30-5,90 per sq m
Rents and Outlook The top asking rent was €6.20 per square meter, unchanged from the end of 2015. Average rents rose slightly from €4.70 per square meter to €4.80 per square meter due to high demand and limited supply. Sustainable rents across the Stuttgart region have also continued to rise as compared to the Q2 2015 due to low supply.
Research: Alexander Rutsch,
[email protected] | Colliers International
9
Interview
Mr. Unmüßig, the Unmüssig Group is now 70 years old; you have been in the construction and development business for 40 years. Please describe the most important development steps of your business. The company was founded by my father, A. Unmüßig, as a civil engineering and bridge construction company in 1946. He was essential in rebuilding Freiburg after World War II. People needed a roof over their heads – fast and uncomplicated. For me, my first six townhouses were especially spectacular. For the first time, I developed a project and built homes on speculation. That was 40 years ago. Our first project development for an institutional investor was in 1980. The residential complex “Eschholzpark” was developed for the Victoria Insurance Company with an investment volume of DM 20 million. Today we conceptualize safe capital investment opportunities for the institutional investment community. From apartment buildings, shopping centers, parking garages, hospitals to residences for senior citizens. Despite the shortage of available properties, everyone is looking for investments in prime real estate. The level of expectation has been continuously increasing in this area.
Hans-Peter Unmüßig Geschäftsführer Unmüssig Bauträgergesellschaft Baden mbH, Freiburg
The project development “Westarkaden” in 2013 with an investment volume of €130 million was very demanding and challenging. The Westarkaden concept is now being implemented in the Bahnstadt in Heidelberg with an investment volume of €140 million. Your company covers the entire range of services in the project development business. What are the advantages of this business model? The advantage of our model is easy to see. We hold the reins, from the the birth of an idea until the point in time when we find the right investor to sell to. The secret to successful developing is to have a feeling for opportunities, sensitivities, information flow, interdependencies and timing: the key is to be like a juggler with all of your balls in the air as long as possible, letting them fall to the ground according to a predetermined choreography. As a project developer I have to really know the market. Market participants are institutional investors who have a clear idea of the yield they expect to achieve. The project draft has to be able to convince investors that the expected yield can be generated. How important will the housing industry be to your company in the future? It will be very important for two reasons: we are following demand, because the institutional investment community – which by the way also obeys the market – is increasingly investing in the housing market. For example in Frankfurt, we acquired the administration building owned by the Association of Statutory Health Insurance Physicians in Hessen (Verwaltungsgebäude der Kassenärztlichen Vereinigung Hessen) and are transforming it into a residential tower called the “Blue Horizon”, which in turn has already been sold to an institutional investor.
10
Market Report Stuttgart | First Half 2016 | Market Report Office Leasing Investment Retail Industry & Logistics
The big challenge, however, is to be able to market affordable rental apartments that young families can afford. The current market development in Freiburg e.g. has forced young families to move out of the city into the outlying areas. Some people are already talking about gentrification. Young people can’t afford to live here anymore, instead there is an increasing share of older, wealthier residents. Our cities are heading toward a very one-sided demographic structure. All the students in the world can’t change that. They move away after graduation and perhaps they come back when they retire, because they think Freiburg is like the Mediterranean. I think it is a serious problem and am convinced that we have to offer young people decent rental housing at decent a moderate price. This is part of what makes a city attractive. What do you expect politicians to do to help solve housing shortages in metropolitan areas? The metropolitan areas have functioning infrastructure and at the same time industrial and commercial wasteland that could be redeveloped for residential and other commercial use. A good example of this is the former lumber trade grounds in Freiburg that has now become the small city district “WESTARKADEN”. Existing properties can be revitalized and redesigned. In addition, it is of great importance to open up more land for construction. Local governments have the monopoly in this case. They have to ensure that more land is designated for construction. This process has to be accelerated if we want to remain competitive. Internal and external development have to be in balance. The city building planning officer and public administration cannot do all this alone. They also need experienced construction developers that know the market inside and out. They have to be on board if city development is going to have any future at all. Currently, the city of Freiburg is not designating any new land for residential constructions – although it is the responsibility of the cities and municipalities to designate land for residential construction in a healthy balance between socialized and open segments such that scarcity is not increased even further.
These criteria will have only a partial direct impact on the development of retail real estate – aside from creating larger retail spaces. The biggest challenge will still be the commitment on the part of the retailers themselves. You have been in business in Baden-Württemberg for many years and you know its peculiarities. Your company is investing in Stuttgart-Degerloch for the first time. Why are your expanding your investing activities to the Stuttgart market? What do you like about Stuttgart the most? Stuttgart, as the state capital, is a demanding, interesting market with great potential. We want to be a part of this. Global players in the automobile industry, electrical and mechanical engineering are just as well represented here as service providers, retailers and companies in the media business. The cultural offerings here are world class. And even though I am from Baden, I appreciate the Swabian liberal-minded way of thinking combined with reserved behavior. You have been working with Colliers International Stuttgart for many years. What do you appreciate the most and what do you expect in the future? I appreciate the reliability, strength in implementation and the fact that things are implemented as discussed. A great degree of trust has been developed which makes working together much easier and very gratifying. I hope that we can develop many common projects on this basis in the future and that the new proximity will make working together even easier. When you have finished your day at work, how would you describe a successful evening? A successful evening for me is cooking with my wife Alma and trying out new recipes. Would you share your favorite leisure activities with us? Downhill skiing – especially in Austria and I love to visit cities in connection with going to great concerts.
What challenges do you see arising from the increase in E-Commerce with respect to retail real estate? The challenge lies primarily not necessarily with the real estate itself but with the retailers. The challenge posed by E-commerce lies in being able to prosper in the face of competition with the online platforms by creating more attractive shopping solutions for customers. This means that large shopping areas have to be created that are surrounded by services like restaurants, wellness, fitness clubs etc. Similar to the system in the internet where you can do “everything with one click”, shopping galleries or centers have to live by the motto “everything in one place”. The shopping experience has to become more attractive for the customer, services provided by the retailers have to be more extensive.
Research: Alexander Rutsch,
[email protected] | Colliers International
11
554 offices in 66 countries on 6 continents
Author: Alexander Rutsch Senior Consultant | Research | Stuttgart T +49 711 22 7 33-395
[email protected]
United States: 153 Canada: 34 Latin America: 24 Asia Pacific: 231 EMEA: 112
€ 2.30
billion in annual revenue
€ 103
Colliers International Stuttgart GmbH Königstraße 5 D - 70173 Stuttgart Tel +49 711 22 7 33-0
billion in transaction volume with more than 84.000 invsetment and leasing deals
186
million square meter under management more than
16,300
professionals worldwide
About Colliers International Germany Colliers International is a global leader in commercial real estate services, with over 15,800 professionals operating out of more than 485 o ces in 63 countries. A subsidiary of FirstService Corporation, Colliers International delivers a full range of services to real estate users, owners and investors worldwide, including global corporate solutions, brokerage, property and asset management, hotel investment sales and consulting, valuation, consulting and appraisal services, mortgage banking and insightful research. e latest annual survey by the Lipsey Company ranked Colliers International as the second-most recognized commercial real estate rm in the world.
colliers.com Photos Cover – “Atlanta” Business Center, Photo by: Colliers International Stuttgart Office Leasing - Adrian Beck Photographer Copyright © 2016 Colliers International Stuttgart GmbH The information contained herein has been obtained from sources deemed reliable. While every reasonable e ort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. The information contained herein has been obtained from sources deemed reliable. While every reasonable e ort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
