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Moderate first half-year, but with take-up potential

Compared to the previous years, in which one record was broken after the next, the space take-up during the first half of 2019 can be assessed as moderate. The result fell around 14 % short of the equivalent value from the previous year, reaching the lowest level since the second half of 2016. “However, it is too early to conclude that the warehouse and logistics market has weakened. This year there are still numerous companies looking for space, some of them in the large-area market segment, and these could significantly raise space take-up over the coming months if a deal can be concluded,” explains Michael Weyrauch, Head of Industrial Letting and Transaction at NAI apollo.

Half of space take-up attributable to deals for > 10,000 sqm

Compared to the previous half-year, there were declines in nearly all size categories up to the middle of the year. Only the small warehouse and logistics property segment up to 1,500 sqm recorded growth, increasing by around 13,000 sqm to 44,000 sqm, meaning that its market share grew from 9.6 % (H1 2018) to a current figure of 15.9 %. The 10,000 sqm-plus size category remains the strongest segment: space take-up of approximately 140,000 sqm was generated in eight deals, corresponding to a market share of 50.5 %.

Owner-occupier purchase by Ikea the largest deal

“The largest deal this year so far came about in the second quarter through the retail company Ikea, which purchased part of the Opel site in Rüsselsheim and among other things will use an existing hall with 33,000 sqm as a new goods distribution centre,” says Dr Konrad Kanzler, Head of Research at the NAI apollo group. Amazon in Gernsheim and Coca Cola Deutschland in Bodenheim shared second place, each leasing around 20,000 sqm of hall space. These were followed by the owner-occupier construction projects of Hegro Eichler (approx. 18,000 sqm) in Dietzenbach and Akasol (15,000 sqm) in Darmstadt, as well as the leasing of 12,000 sqm by SLL System Lager Logistik GmbH, which belongs to the Rigterink logistics group, for the second construction stage of the SEGRO Logistics Park in Bischofsheim.

Reduction of available space for new construction projects

Even this list contains two noticeable changes from the previous years that have a significant impact on the take-up result. Firstly, a decline in leasing deals in project developments is particularly evident in the previous quarter, which primarily results from a corresponding fall in available space. “Here we can see that the availability of plots is falling even in outlying areas which are suitable for logistics developments in terms of location and the ease of gaining planning permission,” says Kanzler. Secondly, the warehousing and logistics companies in particular have become less active. As a result, this user group that was dominant in the previous years with a market share of 61.0 % in 2018 has now fallen behind retail companies (38.3 %) and industrial and commercial enterprises (30.0 %) to third place with a share of 23.8 %.

Previously restrained warehousing and logistics companies expected to grow in importance

“However, this should not be considered to be a decline in demand on the part of warehousing and logistics companies. Rather, it is the result of a lack of new constructions that meet the requirements of potential users when it comes to their location and characteristics,” comments Weyrauch. Therefore, he believes that new project developments will soon find takers. Should the plans and commenced projects in this area all be realised, a potential total area of 200,000 sqm can still be rented in the large-area segment from 20,000 sqm by the end of 2020. In light of this, NAI apollo still forecasts an annual take-up in the region of the ten-year mean of 586,000 sqm. However, no new records should be expected for the time being.



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Frankfurt am Main, 3 July 2019 – BGV GmbH, a Frankfurt-based construction company, has rented 120 sqm of office space at Staufenstraße 4 in Frankfurt am Main. NAI apollo provided support to the company during the leasing process.


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Frankfurt am Main, 2 July 2019 – Within the scope of its quarterly reporting on the German real estate investment market, NAI apollo – a partner of the NAI apollo group – published figures on the German care property market for the first time in the middle of 2019 due to the dynamic development in this segment. NAI apollo includes care homes, assisted living facilities and hybrid forms in the care property asset class.

In the first half of 2019, the real estate consultancy firm recorded a transaction volume of around € 840 million in this segment. “This means that the results for the whole of the years between 2008, the first year for which we recorded figures, to 2015 have already been equalled by the midpoint of the year. Compared to the first six months of 2018, this represents an increase of 3.8 %,” says Andreas Wende, Managing Partner of NAI apollo. NAI apollo anticipates a continued high level of market activity over the coming months, which should produce a result above the five-year average of € 1.6 billion.

Portfolios and single assets with almost identical revenue shares

Portfolio transactions and single-asset sales make an almost identical contribution to the high half-year result. “The large portfolio deals include the French company Primonial REIM’s acquisition of 12 retirement homes in a sale and leaseback transaction and the purchase of five care properties by the new closed-end mutual fund of the INP group, for which € 45 million was paid,” explains Sebastian Deppe, Managing Partner at apollo healthcare GmbH. He adds that the forward deal of real estate company PATRIZIA AG, in which a portfolio consisting of three care properties with an expected completion date of 2020 was purchased for the PATRIZIA Social Care Fund III, also contributed to the strong result. The striking single-asset purchase of the first half year was made by Aachener Grundvermögen, which acquired the Riviera retirement home in the Grünau district of Berlin as part of a forward deal. The project volume for this was most recently valued at € 80 million. “The distribution of the transaction volume by size category reveals that the three categories ‘€ 10 to 25 million’, ‘€ 25 to 50 million’ and ‘€ 50 to 100 million’ are almost identical in importance. The volumes achieved in each of these categories range from around € 240 million to € 250 million, which correspond to market shares of 28.3 % to 29.6 %,” explains Dr Konrad Kanzler, Head of Research at the NAI apollo group. Sales of under € 10 million fall short of this at approximately € 93 million or a market share of 11.1 %.

France and Belgium the strongest international buyer countries

When differentiating by the country of origin, there is an almost equal split between national and international investors. “German buyers make up 50.9 % of the volume traded in the first half-year. In absolute figures, they account for around € 430 million,” says Wende. Among the international investors (49.1 % or € 410 million), France (16.0 %) stands out, in particular due to the Primonial deal and purchases by the French real estate fund Pierval Santé, as well as Belgium (15.4 %) with deals by Aedifica and Cofinimmo. When observing the types of investor, “open-ended real estate funds / special funds” were the strongest group in the first six months of the year with an acquisition volume of around € 317 million (37.7 %). “Asset managers” take second place with around € 242 million (28.8 %), followed by “listed property companies / REITs” (€157 million or 18.6 %).

Increasing demand for care stimulates interest of investors

“The generally high level of interest in commercial real estate in Germany is reflected in a reduction of yields, although some markets are displaying the first signs of a trend towards stabilisation,” comments Wende. In the first half of 2019, the prime yield for care properties was 4.7 %. This represents a steady development compared to the previous year. “The price-to-rent ratios analysed in the same period were concentrated in the region between 16 and 18,” adds Deppe.

Investors’ interest in the asset class of care properties will also remain high in the future. Indeed, the demand for places in care facilities will grow continuously as a result of demographic change. “This further stimulates investor interest. There is not only potential for growth in A or B locations, however: an increase in demand for care facilities is also expected in a large number of C and D markets, as well as in smaller locations with as few as 10,000 inhabitants,” explains Kanzler. Consequently, these assets will become ever more attractive for professional investors. “The greatest bottleneck is the low number of properties in the market, which will ultimately slow down acquisition activities,” adds Kanzler.

Operators and owners of care homes highly fragmented

The special structure of the healthcare and care property market – which was determined as part of a comprehensive survey by apollo healthcare – also has an effect here. “The operator landscape for care homes is currently extremely fragmented,” explains Deppe. Indeed, NAI apollo’s list of the top 100 care home operators shows that the largest 100 operator chains only account for 32.6 % of the approximately 885,000 inpatient care places identified during the analysis. The breakdown of owners is similarly mixed: the influence of institutional real estate investors on the number of care places is currently low due to their share of 10.7 %. Private investors who have acquired care home apartments as part of homeowners’ associations make up a still smaller market share of around 3.3 %. “Development is picking up pace in this area, however. According to our observations, almost every third new care home has a part-ownership model. When it comes to institutional investors, Aviarent’s recently announced cooperation with the Convivo group of companies for the construction of 12 residential homes with a development budget of € 500 million is one example of the increasing activities by these market participants,” continues Deppe.

An above-average transaction volume can again be expected for the investment market for healthcare properties for 2019. As such, NAI apollo forecasts an investment volume above the long-term average of around € 1.6 billion for 2019 as a whole, with the prime yield again stable or with a slight downward trend.



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Frankfurt am Main, 1. Juli 2019

“The result was driven by numerous large-scale deals which were expected at the end of the first quarter and have now been completed. This is also noticeably reflected in the distribution of size categories,” explains Wende. As such, the “> 10,000 sqm” cluster not only represents 27.3 % of the total volume, but has also tripled to 71,700 sqm compared to the middle of the previous year. By contrast, the other four size categories suffered losses.

The largest deal by far during the first six months was DekaBank Deutsche Girozentrale’s rental of 46,200 sqm in a project at Lyoner Straße 13. The next largest transaction was Randstad’s leasing of 14,800 sqm in Frankfurter Straße 100, Eschborn, which was also within the scope of a development.


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NAI apollo: Food truck company leases 450 sqm of warehouse space in Offenbach

Frankfurt am Main, 19 June 2019 – A regional food truck company has rented 450 sqm of warehouse space at Schumannstraße 76 in Offenbach as part of its expansion. The rental commences on 3 June 2019; the owner of the property is an association of private persons. NAI apollo provided support to the lessee during the leasing process of the new space.

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VietinBank moves to larger premises – NAI apollo advises

Frankfurt am Main, 17 June 2019 – One of Vietnam’s largest banks, VietinBank, has moved to new premises in the Westend-Carree at Grüneburgweg 14-18 in Frankfurt am Main. The bank has thus increased the space its Frankfurt branch occupies to almost 1,360 sqm. The previous location was owned by the VietinBank and was brokered to a private investor in collaboration with NAI apollo.

“Multi-tier consulting like we provided for VietinBank in Frankfurt is at least as exciting as it is challenging. The lease and sale must be coordinated exactly to schedule to not disrupt the client's ongoing operations,” says Andreas Wende, Managing Partner of NAI apollo. “Satisfying the space requirements in a highly competitive market for office space ‘just in time’ is a tremendous achievement by our team.”

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NAI apollo: Private investor acquires residential complex in Maintal-Bischofsheim

Frankfurt am Main, 13 June 2019 – A private investor has acquired a residential complex in Maintal-Bischofsheim comprised of nearly 1,400 sqm of rental space for €3.95 million. The seller is also a private investor. The residential complex was built in 2015 and is fully let. NAI apollo provided support to the seller during the transaction.

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NAI apollo: The Consulate General of Malaysia is leasing 1,500 sqm of office space in Frankfurt

Frankfurt am Main, 12. June 2019 – The Consulate General of Malaysia is leasing nearly 1,500 sqm of office space at Bleichstraße 64-66 in Frankfurt. The Consulate General will move to the new premises in the third quarter of 2019. NAI apollo provided support to the lessee during the leasing process.

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NAI apollo brokers 850 square metres of exhibition, sales and hall space in Hanau

Frankfurt am Main, 11. June 2019 – NAI apollo has brokered around 850 square metres of exhibition, sales and hall space at Moselstraße 45 in Hanau to motorcycle dealership Cruiser Center GmbH. The landlord is WEMAG GmbH & Co. KG, for whom NAI apollo was working.

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NAI apollo collaborates with the Akademie der Immobilienwirtschaft

"Only through specialised Knowledge, and therefore ongoing education and Training, can we set ourselves apart from the Competition, meet our clients´ demands and master the growing challenges successfully. We aim to support our employees in this, regardless of their division or Position," says Dr. Marcel Crommen, Managing Partner of NAI apollo. The ADI has contributed to the professionalisation of our Industry for over 20 years, and our collaboration with them is an important buildingblock for NAI apollo regarding the continuous further development of our current and future employees. We will encourage our colleagues to actively participate in suitable education and Training measures," explains Andreas Wende, another Managing Partner of NAI apollo.

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