P R I V A T B A N K

P R I V A T E I M M O B I L I E N

R E A L E S T A T E

F U N D S & A S S E T

Industrial and Logistics Property.Stuttgart Region 2016.

Contents.

Stuttgart

Market Trends ............................................................................................ 4

Facts and Figures ....................................................................................... 6

Investments ................................................................................................ 9

Munich

Market Trends ..........................................................................................10

Your Contact Partners .............................................................................12

ELLWANGER & GEIGER Real Estate .......................................................13

German Property Partners ......................................................................14

4 I

Markus KnabHead of Industrial and Logistics Properties

According to the German Automotive Association (VDA) a total of 3.2 milli-on new cars were sold in 2015, a plus of 6% compared with the previous year. Positive effects for the economy of the Stuttgart Region are a result of such sales figures, but also of enor-mous investments by the automoti-ve industry. Companies like Daimler, Porsche, Bosch and Trumpf have been reinvesting in production as well as R&D locations. Their strong commit-ment will help to preserve the unique industrial value chain of the Stuttgart Region.

These positive trends cannot only be stated on a local and regional level. lso the prospects for the international

automotive markets look very pro-mising. While the US and China have seen a record year in 2015, Western Europe has boosted its sales reaching the highest level in five years. Against the backdrop of such a positive eco-nomic environment, the automotive industry and logistics service provi-ders in the Stuttgart Region are ex-pecting to grow further in 2016.

As in recent years, the trend for outsourcing will continue to shape the value chain of the automotive industry in the near future. Therefo-re, a further reduction in value cre-ation by the OEM‘s, but also further outsourcing of assembly, logistics and value-added services can be assu-med. At the same time, a continued offshoring of production facilities to the respective sales markets could become a constraint to the production increase and the economic growth in the Stuttgart Region.

In 2015, medium-sized (3 ha) and lar-ge (7 to 10 ha) development plots for new build have remained extremely scarce. As the need for more indus-trial and logistics space in suitable locations will not be met by substan-

tial supply, the expected economic growth in the Stuttgart region may only be partially achieved. With gro-wing pressure on existing space, rent levels are due to rise in this segment.

Hope remains that on a local and re-gional level efficient solutions can be found to avoid further negative ef-fects on the economic growth of the Stuttgart Region. In face of a limited local supply, companies will need to seek suitable sites beyond the region. In consequence, productivity would move elsewhere, economic growth would slow down, and the Stuttgart Region would be less attractive as an industrial location.

Market research by Ellwanger & Gei-ger Real Estate has shown that not only large concerns are considering the relocation of some of their pro-duction, but also medium-sized com-panies in the region. Many of these industrial companies are currently occupying older sites with an out-da-ted technical infrastructure. As a re-sult of rising quality requirements for industrial processes, modern mul-ti-functional facilities have come into focus for such occupiers. In effect,

Market Trends.

German carmakers and their suppliers look back on a very successful last year. The same applies to industrial and logistics real estate in the Stuttgart Region. After a relatively slow start, forecasts for 2015 were exceeded by a 40% increase in letting volume, one of the best results in recent years.

I 5

the percentage of own investments in existing facilities and extensions of production space has seen a sharp increase in the last year.

While the demand for suitable sites and development projects in good locations of the region is due to re-main high, the low availability of

respective plots may slow down dy-namics in the industrial and logistics market.

In 2016, this effect should become apparent in a modest letting volume and a low level of new developments in this sector. For this reason, efforts need to be intensified to modernize

old production sites and further de-velop existing industrial space. A di-alogue with local authorities will be required to seek viable, practical and timely solutions, and to secure the economic growth and attractiveness of the Stuttgart Region.

County of Rems-Murr

County of Göppingen

Stuttgart

A 8 direction München

A 81 direction Singen

A 8 direction Karlsruhe

A 81 direction Heilbronn

Geislingen a. d. Steige

Göppingen

Bietigheim-Bissingen

Ludwigsburg

Vaihingen a. d. Enz

Ditzingen

Schwieberdingen

Sindelfingen

Böblingen

Weil der Stadt

HerrenbergNeckartenzlingen

Filderstadt

Ostfildern

Esslingen

Nürtingen

Wendlingen

Schorndorf

Winnenden

Waiblingen

Backnang Murrhardt

Leonberg

Kornwestheim

Leinfelden-Echterdingen

Weilimdorf

The Stuttgart Economic Region

industrial and logistics cluster *

* logistics space < 50,000 sqm industrial space < 100.000 sqm

County of Böblingen

County of Ludwigsburg

Kirchheim u. TeckCounty of Esslingen

Stuttgart

Berlin

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Letting turnover*

For the counties of the Stuttgart Regi-on, Ellwanger & Geiger Real Estate were able to identify a total space take-up of 210,000 square metres of lettable industrial and logistics space. This cor-responds to a 22.1% increase compared with the previous year (172,000 sqm).

For the fourth year in succession, the County of Ludwigsburg has accounted for the highest space turnover with ca. 86,200 square metres of newly let in-dustrial and logistics space. Four large-scale lettings of more than 10,000 square metres each have cont-ributed to this extra-ordinary result (see below).Böblingen ranks second with around 46,500 square metres, followed by the counties Rems-Murr (ca. 29,400 sqm), Esslingen (ca. 27,800 sqm), Göppingen (14,500 sqm) and Stuttgart with 5,400 square metres of newly rented industri-al and logistics space.

Top lettings in 2015:

Rental turnover (in sqm) Stuttgart Economic Region

Reantal turnover by counties

Q1/2015: existing mixed-use facility with ca. 24,000 sqm in Böblingen-Hulb, let to Daimler AG

Q1/2015: warehouse with ca. 11,000 sqm in Tamm let to a logistics service provider

Q4/2015: ca. 12,000 sqm of existing logistics and production space in Fricken-hausen let to a high-profile mechanical engineering company

Q4/2015: newly built logistics property with ca. 12,000 sqm in Kornwestheim let to a renowned automotive company from Stuttgart-Zuffenhausen

Q4/2015: mixed-use property with ca. 11,000 sqm in Korntal-Münchingen let to a renowned automotive company from Stuttgart-Zuffenhausen

Q4/2015: ca. 11,400 sqm of logistics space in Tamm let to a logistics service provider

Source of both illustrations: Research ELLWANGER & GEIGER Real Estate GmbH ©, January 2016

2011 2013 20152010 2012 2014

195,000

165,000

240,000

217,000

172,000

210,000

69,200

40,000

65,50058,000

27,500

25,400

Newly built space

Total space

Böblingen

(2014: 34.0%)

Ludwigsburg (2014: 37.0%)Rems-Murr

(2014: 7.0%)

Esslingen(2014: 8.5%)

Göppingen (2014: 6.0%)

Stuttgart (2014: 7.5%)

14.0% 41.1%

Facts and Figures.

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Source: Research ELLWANGER & GEIGER Real Estate GmbH ©, January 2016

Total space turnover by size / signed leases 2015 (existing and newly built space)

County of Esslingen: ca. 4,700 sqm in Leinfelden-Echterdingen County of Ludwigsburg: ca. 3,400 sqm in Korntal-Münchingen County of Ludwigsburg: ca. 5,300 sqm in Korntal-Münchingen County of Ludwigsburg: ca. 12,000 sqm in Kornwestheim

< 1,000 sqm

1,000 to3,000 sqm

3,000 to5,000 sqm

5,000 to10,000 sqm

> 10,000 sqm

5.0%

18.5%

19.3%

18.3%

38.8%

17 leases

23leases

11leases

6leases

6leases

Newly built propertyIn 2015, around 25,400 square met-res of newly built logistics space were successfully let in the Stuttgart Regi-on. Compared with the previous year, this signifies a drop of 7.6%.

With a total of 8,700 square metres, speculative logistics developments held a market share of 34.3%. The remaining 16,700 square metres of newly built logistics had already been pre-let before start of construction.

In 2015, only one new facility with 12,000 square metres in Kornwes-theim was developed by an institu-tional investor. The remaining 13,400 square metres were built by professi-onal private investors.

Newly built industrial and logistics peroperty:

DemandThe greatest demand for industrial and logistics space came from auto-motive OEM s and their suppliers, as well as from logistics service provi-ders and freight forwarders.

At the same time, also regional com-panies have shown a keen interest in renting further industrial and logistics space.

Against the national trend, demand from retailers and e-commerce has not yet exceeded the space demand by the automotive and logistics sec-tors in the Stuttgart Region.

LeasesELLWANGER & GEIGER Real Estate have identified a total of 63 new lea-ses in 2015. Four leases were signed for newly built property, and 59 for existing industrial and logistics faci-lities. In the previous year, 55 leases were signed in the Stuttgart Region.

A total of 39 lettings were supported by professional agents, which corre-sponds to a market share of 61.9%. Based on space turnover, the rate of agency supported lettings even ac-counts for 62.9% of leases (ca. 132,257 sqm).

Ellwanger & Geiger Real Estate have successfully supported the letting of 4,700 square metres of newly built and 39,000 square metres of indus-trial and logistics space. This corres-ponds to an extra-ordinary market share of ca. 30%

* without leses renewals/without owner-occupiers

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Contractual terms In 2015, industrial and logistics leases for existing property had an avera-ge duration of 5,3 years. For facilities with more than 10,000 square metres, leases with 10 years were signed.

Also newly built property obtained fi-xed lease terms of 10 years.

Rent levels **For industrial and logistics space in the Stuttgart Region, ELLWANGER & GEI-GER Real Estate have calculated aver-age rents of € 4.60 per square metre in 2015. Compared with € 4.45 per square metre in the previous year, this accounted for an increase of ca. 3.4%.Newly built property has attracted

base rents between € 6.00 and € 6.20 per square metre, while average rents lay at € 6.10 per square metre. This si-gnifies a clear increase of 15.1% com-pared to 2014, where average rents had settled at € 5.30 per square metre.

** by rented industrial/logistics space

Rent levels 2015*

Source: Research ELLWANGER & GEIGER Real Estate GmbH ©, January 2016

* by rented industrial / logitics space

monthly net rent

Net rent € per sqm

(exsiting space)Average net rent € per sqm (existing space)

Net rent € per sqm (newly built space)

County of Böblingen

County of Esslingen

County of Göppingen

County of Ludwigsburg

County of Rems-Murr

City of Stuttgart

Total

5.10 – 5.90

3.40 – 5.80

4.30 – 5.50

3.40 – 5.50

3.27 – 4.50

5.80

3.27 – 5.90

5.50

4.10

4.90

4.30

4.20

5.80

Ø 4.60

6.00

6.10 – 6.20

Ø 6.10

* by rented industrial/logistics space

monthly net rent

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As in recent years, property inves-tors have continued to show a keen interest in the Stuttgart Region. Un-fortunately, the continuously strong demand for multi-functional logistics developments could not be met by a respective supply of newly built faci-lities.

The reason for this lack of available in-vestment products is the generally low level of construction in this segment. In addition, privately developed logi-stics space was kept in the portfolio and therefore not offered on the pro-perty market. Also institutional inves-tors tend to hold newly built facilities in their fund vehicle.

Major logistics transactions:

In the Light Industrial segment, a portfo-lio deal of six regional properties located in the counties of Böblingen, Esslingen and Ludwigsburg, totalling ca. 49,500 square metres of storage and produc-tion space was concluded in 2015. The largest single asset deal concerned an industrial areal of ca. 25,000 square me-tres in Stuttgart-Feuerbach.

Further light industrial transactions:

Investment volumes for single asset deals in this segment ranged between approximately 5.5 and 18 million euros, with gross initial yields between 6.9% and 9.8%. Existing light industrial pro-perty accounts for an average remaining lease term (WAULT) of four to eight ye-ars. For newly built property, a WAULT of 15 years has been identified.

In 2015, prime yields of up to 5.7% were achieved for multi-functional, state-of the-art logistics property.

Against the backdrop of a continuously strong and rising demand for logistics assets, prime yields will come under further pressure. For newly built, mul-ti-functional logistics space in the Stutt-gart Region, Ellwanger & Geiger Real Estate expect top yields to peak at 5.9% .

Schwieberdingen (County of Lud-wigsburg): logistics property with ca. 7,800 sqm

Stuttgart International Airport: exis-ting logistics site with ca. 5,800 sqm

Waiblingen (County of Waiblin-gen): newly built logistics facility of ca. 4,500 sqm

Source: Research ELLWANGER & GEIGER Real Estate GmbH ©, January 2016

Herrenberg (County of Böblingen): industrial areal with a main usable area of ca. 13,500 sqm (production and logistics)

Korntal-Münchingen (County of Ludwigsburg): ca.12,600 square metres of production and logistics space

Weil der Stadt (County of Böblin-gen): existing production and sto-rage site with ca. 10,200 sqm

Top yields for commercial property in %

Investments.

2011 2013 20152010 2012 20142009200820072006

7,0

4.6 4.6 4.64.25 4.25

7,0

7,5 7,5 7,5 7,5 7,5

7.57.25

5.7

9.5

7.2

10.5 10.5

7.58.0

7.5

7.06.8

6.25

5.04.6

5.0 5.0 5.0

5.55.25

5.5 5.5 5.5 5.5 5.55.25

5.04.5

Retail Centres

Logistics

Office

Office/retail in prime Location

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Munich - Market Trends.

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Space turnover

In the greater Munich area, ELLWAN-GER & GEIGER have identified a total space turnover of ca. 200,000 square metres in 2015. This corresponds to a setback of 18.3% compared with a ta-ke-up of 245,000 square metres in the previous year.

The majority of new leases were si-gned for spaces between 1,000 and 3,000 square metres. The strongest demand came in 2015 from retailers, followed by logistics service providers.

Rental levels

Due to a lack of suitable letting op-portunities, the rent levels for indus-trial and logistics space in the grea-ter Munich area continued to rise in 2015. Average rents lay at ca. € 6.00 per square metre, while at commercial estates within the city limits of Mu-nich peak rents of € 9.50 per square metre were achieved.

Modern multi-functional facilities in the region peaked at € 6.75 per square metre.

Outlook

Due to the low supply of logistics and production space, it cannot be assu-med that a space turnover comparable to the previous year will be achieved in 2016. This holds especially true, as only few newly built facilities are due to be available on the market.

Therefore, rent levels in this segment will continue to rise for existing indus-trial and logistics space. At the same time, peak rents can be expected to cool down in 2016.

Turnover (Tsqm)

2014: 245 2015: 200

- 18.3%

Trend

Peak rent (€ per sqm)

2014: 6.5 2015: 6.75

+ 3.85%

Trend

Top yield (%)

2014: 6.4 2015: 5.6

- 12.5%

Trend

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Top yieldTurnover Peak rent

Overview of GPP-locations*

Hamburg 2015

590,000 sqm (2014: 453,000 sqm):

+ 30.0%

€ 5.70 per sqm (2014: € 5.60 per sqm)

6.0% (2014: 6.9%) Berlin 2015

349,000 sqm (2014: 269,000 sqm):

+ 30.0%

€ 4.70 per sqm (2014: € 4.70 per sqm)

5.4% (2014: 6.25%)

Düsseldorf 2015

158,700 m² (2014: 197,200 sqm):

- 19.5%

€ 5.40 per sqm (2014: € 5.40 per sqm)

5.25% (2014: 6.1%)

Cologne 2015 (Stadtgebiet)

75,000 sqm (2014: 85,000 sqm):

- 12.0%

Stuttgart 2015

210,000 sqm (2014: 172,000 sqm):

+ 22.1%

€ 4.60 per sqm (2014: € 4.45 per sqm)

5.7% (2014: 6.8%)

Frankfurt 2015

393,300 sqm (2014: 373,000 sqm):

+ 5.5%

€ 6.00 per sqm (2014: € 6.00 per sqm)

5.25% (2014: 6.0%)

Munich 2015

200,000 sqm (2014: 245,000 sqm):

- 18.30%

€ 6.75 per sqm (2014: € 6.50 per sqm)

5.6% (2014: 12.5%)

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€ 4.95 per sqm (2014: € 4.95 per sqm)

5.25% (2014: 6.5%)

* without owner-occupiers

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Limitation of liabilityThis study has been drawn up with the greatest care. We must however ask you to be understanding of the fact that we cannot admit any liability for the correctness of the estimates given here.

Markus KnabHead of Industrial and Logistics PropertiesPhone +49 711/2148-227Markus.Knab@ellwanger-geiger.de

Alexander FinkConsultant, Industrial and Logistics PropertiesPhone +49 711/2148-261Alexander.Fink@ellwanger-geiger.de

Alexander DeissConsultant, Industrial and Logistics PropertiesPhone +49 711/2148-383Alexander.Deiss@ellwanger-geiger.de

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 Real Estate. You will benefit from our expertise, our long-standing experi-ence and our comprehensive services.

Our team in Stuttgart looks forward to your call or visit.

You can reach us at:

Phone +49 711/2148-286

or Fax +49 711/2148-290.

Informationen on the internet:

www.ellwanger-geiger.de

Entwicklungen 2015/2016 I 15

ELLWANGER & GEIGER Real Estate.

Real Estate

Systematic research form the basis for our analyses of location, portfolios and cost-effectiveness that reflect market conditions. From these, we derive stra-tegies aimed at capitalising on poten-tials for earnings and efficiencies. In addition to comprehensive leasing services, our core expertise includes project consulting and transaction bu-siness. We adopt a hostic approach in consulting on real estate: we partner you all the way - from the develop-ment of marketing strategies to the preparation of data on properties and the implementation of marketing pro-cesses.

Our services

Research Investment analyses and consulting Transactions, renting and leasing of

office, retail, industrial and logistics

space

Funds & Asset Management

We develop, plan and manage custo-mised real estate investment products and special funds for institutional and professional private investors. We select different investment vehicles depending on the needsand product preferences of each inves-tor:

Domestic special AIFs pursuant to the German investment Code Closed-ended public AIFs pursuant

to the German Investment Code Luxembourg security funds and

special funds (SICAV, SIF) individual schemes for offshore

investors

We select investment volumes that permit niche investments and indivi-dual mandates. We also limit the number of investors so that we can provide individualised support throug-hout the investment period. Our ser-vice naturally includes transparent re-porting with detailed reports on funds, monthly financial reports and status reports on real estate investments.

Our offices

StuttgartBörsenplatz 170174 StuttgartPhone +49 711/2148-300Fax +49 711/2148-290

MunichHerzog-Rudolf-Straße 180539 MünchenPhone +49 89/17 95 94-0Fax +49 89/17 95 94-55

ELLWANGER & GEIGER Real Estate offers you a one-stop shop for a comprehensive range of ser-vices relating ro 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 aboce all on excellentknowledge of the market and decades of experience in real estate business.

Our further publications

Stuttgart Investment Market Report Stuttgart Office Market Report Stuttgart Retail Trade Market Report Munich Office Market Report

and other information materials may be obtained free of charge from:gewerbeimmobilien@ellwanger-geiger.de or www.ellwanger-geiger.de.

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GERMAN PROPERTY PARTNERS: LOCAL COMPETENCE NATIONWIDE.

German Property Partners - or GPP is a nationwide network for commercial real estate in Germany. GPP bundles the ex-pertise of leading commercial property companies in a nationwide alliance for regional competence. National and in-ternational clients can profit from one face to the customer and from the local expertise of our partners. In short: one contact partner for all Big 7 property markets in Germany.

Your optimal performance port-folio for commercial Real Estate

Our services range from property inves-tments to commercial lettings. For in-vestors, we buy and sell industrial and logistics property all over Germany - as single asset or entire property portfolio. Due to the banking background of the founding members ELLWANGER & GEI-GER (Stuttgart/Munich) and Grossmann & Berger (Hamburg/Berlin), we are able to support your project developments also in financial aspects.

No matter is you are looking for office, retail, industrial, or logistics space - with GPP you will always have a competent

partner at your side.

Find out more about the top 7 com-mercial real estate locations in our free-of-charge GPP Commercial Mar-ket Reports at:

www.germanpropertypartners.de/marktberichte

Munich • Stuttgart • Frankfurt • Cologne • Düsseldorf • Berlin • Hamburg

ELLWANGER & GEIGER Real Estate GmbHUnternehmensgruppe ELLWANGER & GEIGER PrivatbankiersBörsenplatz 1, 70174 StuttgartTel.: 0711/2148-300, Fax: 0711/2148-290www.ellwanger-geiger.deAmtsgericht Stuttgart, HRB 733293, Geschäftsführer: Mario Caroli, Björn Holzwarth