THE STUTTGART OFFICE MARKET 2010 / 2011

THE STUTTGART OFFICE MARKET2010/2011

Overview Of the Stuttgart Office market

Year Volume

(sq. m)

Representative

peak rents

Average central

business district

rents

Vacancies

(sq. m)

Vacancies

(%)

Total space

available

(mill. sq. m)

Completion

volume (sq. m)

Pre-leased

volume (sq. m)

1993 140,000 €16.36 €14.50 160,000 2.80 5.609 345,000 No data

1994 120,000 €14.83 €13.60 225,000 4.00 5.926 317,000 No data

1995 120,000 €14.32 €13.35 190,000 3.30 6.056 130,000 No data

1996 135,000 €14.32 €12.75 290,000 4.90 6.108 52,000 No data

1997 140,000 €14.83 €12.65 270,000 4.50 6.231 123,000 No data

1998 180,000 €15.08 €13.85 186,000 2.80 6.266 35,000 No data

1999 230,000 €15.85 €14.80 118,000 1.80 6.296 39,000 No data

2000 205,000 €16.87 €14.90 100,000 1.50 6.356 60,000 No data

2001 160,000 €18.41 €15.34 137,000 2.00 6.516 160,000 130,000

2002 127,000 €17.89 €14.80 292,000 4.20 6.828 312,000 220,000

2003 149,000 €17.50 €14.50 379,000 5.30 6.973 145,000 80,000

2004 152,000 €17.00 €14.50 415,000 5.70 7.102 129,000 93,500

2005 145,000 €17.00 €13.50 402,000 5.60 7.170 68,500 51,400

2006 140,000 €17.50 €13.50 467,400 6.50 7.222* 52,500 20,500

2007 169,000 €17.50 €14.50 466,000 6.40 7.253 32,600 23,400

2008 180,000 €18.00 €14.50 460,000 6.20 7.367 117,000 116,000

2009 171,000 €18.00 €13.60 453,000 6.12 7.401 40,000 22,000

2010 194,000 €17.50 €14.30 480,000 6.46 7.425 42,400 22,400

* Data from a survey by BulwienGesa AG + Baasner, Möller & Langwald GmbH Source: Research BANKHAUS ELLWANGER & GEIGER KG ©, figures as of 31 December 2010

Source: Manfred Storck

Bülow carréLautenschlagerstrasse 20 Office + retailTo be completed in 2012

Casa NovaPaulinenstrasse 41 Office To be completed in 2011

Posto‘sAlte Poststrasse 3–5 Office + retailcompleted in 2009

WindoW‘sTheodor-Heuss-Strasse 7 Office + retailcompleted in 2009

City GateKriegsbergstrasse 11 Office + retailTo be completed at unknown date

Motel oNeLautenschlagerstrasse 14 Hotel To be completed in 2011

PhönixbauKönigstrasse 5 Office completed in 2008 Postquartier

Lautenschlagerstrasse 17 Office + retailTo be completed in 2011

QuadratBüchsenstrasse 26a Office + retailcompleted in 2011

hospitalhofBüchsenstrasse OfficeTo be completed in 2013

gallion hausTheodor-Heuss-Strasse 8 Office + retailcompleted in 2011

Theo 10Theodor-Heuss-Strasse 10 Office + retailTo be completed in 2011

LOOK 21Türlen-/Heilbronnerstrasse Office + retail + residential To be completed at unknown date

Stuttgart 21 (Site Section a1)Office + retail + residential for details see page 9

PaulinePaulinenstrasse OfficeTo be completed at unknown date

CaleidoTübinger Strasse Office + retailTo be completed at unknown date

Posto‘sAlte Poststrasse 3–5 Office + retailcompleted in 2009

Da VinciOffice + retailTo be completed at unknown date

E 65Eberhardstrasse 65 Office + retailTo be completed in 2013

Quartier SOffice + retail + residentialTo be completed in 2013

4

5

CONTENTS

Foreword 6

Stuttgart – well prepared for the future 8

Stuttgart 21 is on its way 9

Rental take-up exceeds all expectations 10

Take-up by sectors 12

Take-up by size of premises 13

Rent prices show a small decline 14

Slight increase in vacant office space 16

Upturn in the office market throughout Germany 18

Central Stuttgart: Big potential for new growth 20

Northern Stuttgart: New concepts needed 21

Eastern Stuttgart: In a waiting position 22

Southern Stuttgart: Positive development continues 23

Overview of the Stuttgart office market 25

Forecast: Upsurge in Stuttgart’s office market 27

Your contacts 28

EllwaNGER & GEIGER Real Estate 29

FOREwORd

Stuttgart – looking to the future.

Stuttgart is a city of innovations and ideas: a city in motion.

In terms of investment, productivity, services, recreation and urban development, Stuttgart is one

of the most active and attractive cities in Europe.

The global economic crisis has been largely overcome. The companies in Stuttgart now have

well-filled order books, their products are in high demand throughout the world and more jobs are

available. Stuttgart today has some 17,000 enterprises in a wide range of sectors. Together they

employ almost 350,000 people and generate gross value added of approximately 31 billion euros.

In the last three years, in spite of the economic crisis, employment has increased by about 1 percent.

This is an encouraging state of affairs, and it is the result of a municipal economic policy that has

pursued clear goals over many years and proved to be reliable. The city must continue on this path

to be fit for the future. we recently completed a study of the goals that Stuttgart should focus on in

the coming years. Taking the city’s existing business strength into account, we identified three are-

as that need promotion: sustainable mobility, education and tourism. Through strong growth in

these promising areas, up to 18,600 new jobs could be created by 2020.

we would like to thank EllwaNGER & GEIGER Privatbankiers for their many years of excellent co-

operation and for their continuation of the public-private partnership that has made it possible to

produce a new edition of this publication.

This issue of the Stuttgart Office Market provides you with detailed information on trends in this

part of the property market. we invite you to participate actively in its development.

dr. wolfgang SchusterMayor of Stuttgart

Ines aufrechtdirector of Business development, Stuttgart

6

7

thiS city offerS excellent opportunitieS. let uS take advantage of them.

In 2010, Germany’s seven most important property markets had a total turnover volume of

approximately 2.74 million square metres, thus exceeding the previous year’s volume by more than

19 percent. what about Stuttgart? last year new space amounting to 194,000 square metres was

let in the city. This is a good figure, and the high demand for space especially in the city centre is a

sign that the growth will continue. It nevertheless pays to take a closer look, because an analysis

often reveals important differences. For one thing, not all office locations in the city are developing

at the same rate. For another, prospective tenants now pay greater attention to differences between

new and old premises. Beyond doubt, that is because of the complex demands on building services

such as IT. Moreover, tenants are less and less willing to rent premises that fail to meet modern

standards in energy efficiency and facilities. what does this mean for landlords and investors?

In the coming years it will become more and more important for them to keep office premises in

an up-to-date condition. Tenants will be less inclined to tolerate delays in renovation, and they

will demand rent reductions when renovation is neglected. with the prospects for growth now so

favourable, it is time to develop new, attractive locations and new office buildings. This will be a

challenge to the city and, of course, to private investors.

we hope that you find this publication interesting. If you have any questions concerning the office

market and rentals, we will be glad to help you.

Yours sincerely,

Mario Caroli Björn Holzwarth

0 5,000 10,000 15,000 20,000 25,000

Berlin

Hamburg

Cologne

Stuttgart

Frankfurt

Düsseldorf

Munich

per capita purchaSing power in 2010:

citieS with 500,000 or more reSidentS

STUTTGaRT – wEll PREPaREd FOR THE FUTURE

Stuttgart continues to be a location with a sound economic base and strong growth potential. Baden-württemberg’s capital weathered the economic crisis of the past two years very well. and for the years ahead, the atlas of future Business Sectors in 2010, published by the Swiss think tank prognos, rates the city’s prospects as excellent.

Wide range of business sectors

One major reason for Stuttgart’s strong growth potential

is its good mix of industries. Of central importance are

the automotive and automotive supply industries, which

are now enjoying especially strong growth owing to the

rising demand for electric vehicles and vehicles based on

other new technologies. In addition, there are numerous

companies specializing in engineering, environmental

technology, communications technology, publishing,

media and finance. Efforts are also under way to form

new business clusters in the Stuttgart economic region.

Early signs of such activity can be seen in the programme

of study in medical technology that was established in

winter 2010/2011 at the University of Stuttgart in

cooperation with the University of Tübingen, and in the

renewable energies programme that will start in the

coming winter semester. Innovative technologies and

work processes will also be developed at the Fraunhofer

Centre for Virtual Engineering, which is currently under

construction.

HigH educational level

another factor in the region’s economic success is its

highly qualified workforce. No other major German city

has such a high concentration of university graduates as

Stuttgart, with 21.9 percent. with four large universities

and continuously rising numbers of students, Stuttgart

can expect to remain in this position.

loW unemployment rate

at the end of 2010, Stuttgart’s unemployment rate was

5.8 percent, well below the national average of 7.2 per-

cent. This was lower than at any time in the last 18 years.

Moreover, given the predicted economic growth of 2.5

percent for 2011, the employment situation can be

expected to remain satisfactory. One reassuring fact is

that rising domestic consumption will lead to continued

economic growth even if exports stagnate.

data source: GfK GeoMarketing, June 2010

25,713

22,668

21,627

21,219

20,648

20,158

16,880all figures in euros

8

9

STUTTGaRT 21 IS ON ITS waY

construction work for the project Stuttgart 21 has now begun. the northern wing of the railway station was torn down in autumn 2010, and other preparations were carried out in the area of the former bus station at the south side of the building.

Following a change in planning for site section a1, the

Goldene acht project originally proposed by lBBw was

replaced by the Sparkassen akademie, a training institu-

tion run by the German Sparkasse banks. The new plan

comprises a training centre, some 160 apartments for

overnight accommodation, and office space for about

330 employees. Each year some 26,000 Sparkasse em-

ployees will receive instruction here, completing a total of

60,000 days of training. This will bring added life to the

district. The library of the 21st Century, an important

attraction that is expected to draw a million visitors each

year, has now grown to full size. Opening is set for the

fourth quarter of 2011. Construction for Europe Plaza, an

office project covering 16,300 square metres, can begin

now that advance rental agreements are in place. Pariser

Höfe, a project that includes some 250 apartments and

an office wing with approximately 8,000 square metres, is

under construction. Completion is expected by the second

quarter of 2012.

Site sections 6, 8 and 9 on wolframstrasse again created

excitement in 2010. a joint building permit application

submitted just before the deadline by ECE, STRaBaG and

Bayerische Hausbau put an end to the discussion on better

integration of the complex into the urban development

plan. The innovative concept, made up of attractively

spaced small units, includes 43,000 square metres for

retailers, 4,500 square metres for restaurants, a 4-star

hotel with 160 rooms, and some 400 apartments. On the

corner of Heilbronner Strasse and wolframstrasse the

planning calls for a high-rise building with 30 to 50 luxury

apartments plus office space in the first three stories of

the semi-basement.

developments in the past year demonstrate that site section

a1 continues to offer interesting possibilities, both for

project developers and for users. In no other major city

are there such large, contiguous premises available for

office and other use as at present in the heart of Stuttgart.

HBF

Stu

ttg

art

Heilbronner Strasse

Türl

enst

rass

e

wolfram

strasse

Europe-Plaza

Site section 4Still available



Site section 6retail + residentialto be completed in 2014

Site section 13Pariser Höfeto be completed in 2012



Site section 7residential + office

library 21to be completed in 2011

Sparkassen akademieto be completed in 2013

Present railway lines, in future Site section a2residential


RENTal TaKE-UP ExCEEdS all ExPECTaTIONS

in 2010, the figures for rental volume in the Stuttgart office market were surprising and encouraging. Some 194,000 square metres were newly rented, reflecting the sharp rise in demand for office space brought about by the economic upturn. this is almost the figure achieved in 2000, which was just under 200,000 square metres.

Rental take-up thus increased by about 14 percent over

the previous year’s level of approximately 171,000 square

metres. during the period under consideration 301 leases

were concluded, 45 more than in the previous year.

continued strong demand in tHe central

business district and city centre

In 2010, the locations with the strongest demand and the

highest number of leases were again in Stuttgart’s central

business district, that is, the area in the city ring between

the main station, Theodor-Heuss-Strasse, Hauptstätter

Strasse and Paulinenbrücke, plus the city centre. although

more space was let in 2009, about 22,600 square metres,

this was largely the result of a contract by the interior

ministry for approximately 19,000 square metres on

willy-Brandt-Strasse. In the city centre the largest

contract in 2010 was for a total of 5,400 square metres,

concluded by an IT service provider.

upturn in city fringe locations

Thanks to rental transactions by large-scale users, the

fringe areas were able to post considerable gains. In

Stuttgart-Zuffenhausen, for example, the rental volume

received a strong boost from a contract for some 22,000

square metres. Significant increases in demand were also

recorded in Vaihingen/Möhringen, Fasanenhof and

leinfelden-Echterdingen.

10

11

rental take-up in greater Stuttgart in Sq. m

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

central business district 35,350 25,350 19,000 4,600 55,100 33,300 43,000 61,500 44,400 38,200 32,800

city centre 36,600 25,710 45,000 28,400 21,700 43,200 31,300 46,600 41,700 83,800 66,600

vaihingen/möhringen 67,400 50,550 6,300 14,450 30,800 10,400 32,600 13,700 18,500 20,200 26,200

fasanenhof 4,900 2,700 11,000 72,500 4,000 3,700 3,500 2,300 10,600 2,700 5,300

feuerbach/Zuffenhausen 40,400 16,700 6,000 8,400 20,600 9,800 2,000 6,800 12,300 3,300 28,500

degerloch 3,830 5,700 2,700 3,000 6,000 3,400 4,500 7,200 9,200 4,900 2,100

Weilimdorf 4,900 13,150 16,000 750 3,000 6,600 6,000 5,100 12,800 5,900 11,400

bad cannstatt/Wangen 2,000 5,000 18,000 14,000 7,700 24,600 13,500 15,400 12,500 8,100 8,300

leinfelden-echterdingen 10,230 14,040 3,000 2,900 3,100 10,000 3,600 10,400 18,000 3,900 12,800

total 205,610 158,900 127,000 149,000 152,000 145,000 140,000 169,000 180,000 171,000 194,000

Source: Research BaNKHaUS EllwaNGER & GEIGER KG ©, figures as of 31 december 2010

rental take-up of office Space in Stuttgart 1995–2010 in Sq. m

250,000

200,000

150,000

100,000

50,000

0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010


TaKE-UP BY SECTORS

In 2010, the category with the highest demand was again

the other office users, which included doctors, architects,

engineers, and trading and industrial companies. The

rental volume, approximately 93,200 square metres,

again showed an increase over the previous year. This was

mainly the result of a large rental transaction for some

22,000 square metres on the xcel BusinessCampus in

Stuttgart-Zuffenhausen.

The IT and telecommunications industry likewise showed

a significant increase in demand. In 2009, the rental

volume was only 11,000 square metres, whereas in 2010

it came to about 34,900 square metres, corresponding to

roughly 18 percent of the total.

In the consultants category the previous year’s result of

approximately 25,900 square metres increased by almost

100 percent. leases were concluded for this sector

especially in the central business district and city centre.

In the case of financial service providers, the demand for

space rose over the 2009 level by about 2,000 square

metres, to 16,300 square metres. The percentage of total

rental turnover remained about the same.

In the area of media/communication the financial crisis

made itself felt through company budget cuts, leading to

a decline in demand. In 2010, the volume was only about

7,900 square metres, compared to some 10,500 square

metres the previous year.

The public sector also showed a decline in new leases.

whereas an usually high take-up was achieved in 2009

owing to the rental of some 19,000 square metres by the

interior ministry on willy-Brandt-Strasse, the newly rented

space in 2010 came to about 15,800 square metres, a

significant drop.

take-up By SectorS in %

2003 2004 2005 2006 2007 2008 2009 2010

media/communication 5.02 4 8 6.64 6.27 5.56 6.14 4.07

financial service providers 8.04 34 12 9.93 10.36 15.78 8.36 8.41

consultants 7.03 5 10 20.29 18.4 13.39 7.72 13.35

public sector 4.02 9 21 3.21 17.75 7.22 30.41 8.14

others 73.21 38 41 48.07 37.28 36.94 40.94 48.04

it/telecommunications 2.68 10 8 11.86 9.94 21.11 6.43 17.99

total 100 100 100 100 100 100 100 100

Source: Research Bankhaus EllwaNGER & GEIGER KG ©, figures as of 31 december 2010

12

13

TaKE-UP BY SIZE OF PREMISES

in keeping with the characteristic pattern on the Stuttgart office market, demand was strongest for premises up to 500 square metres. in this segment there were 222 leases, 40 more than in the previous year.

In the central business district and city centre 137 office

premises in this category were let. The southern fringe

areas also showed strong demand. about 27 percent of

the total rental take-up was in this category.

Premises between 501 and 1,000 square metres accounted

for 46 leases, corresponding to 17 percent of the total

turnover. For areas between 1,001 and 2,000 square metres

there were 14 leases in 2010, 1 more than in the previous

year. Most of the demand was in Stuttgart’s city centre.

In the segment from 2,001 to 5,000 square metres 15

premises were let, 5 more than in 2009.

There were 4 leases, for a total of 39,930 square metres,

for premises larger than 5,000 square metres. This

corresponds to about 21 percent of the total rental take-

up. The lease concluded by Bosch for premises in Stuttgart-

Zuffenhausen accounted for 22,000 square metres of this

total. Premises totalling 5,000 square metres were let to a

private educational institution in Stuttgart-Feuerbach.

another 5,430 square metres were taken by an IT service

provider in the city centre, plus approximately 7,100 square

metres by an office supply company in Stuttgart-Vaihingen.

compariSon of new contractS By Size

60,000

55,000

50,000

45,000

40,000

35,000

30,000

25,000

20,000

15,000

10,000

0

< 500 sq. m 501 – 1,000 1,001 – 2,000 2,001 – 5,000 > 5,000 sq. m

Total space 2010: 194,000 sq. m

Total space 2009: 171,000 sq. m

compariSon of new contractS By numBer

200

100

0

< 500 sq. m 501 – 1,000 1,001 – 2,000 2,001 – 5,000 > 5,000 sq. m

Total number 2010:

301

Total number 2009: 256

2009

2010

222

46

182

47 14 13 15 10 4 4

Source for both charts: Research BaNKHaUS EllwaNGER & GEIGER KG ©, figures as of 31 december 2010

RENT PRICES SHOw a SMall dEClINE

the average rent in Stuttgart’s market for office premises as of 31 december 2010 was 11.00 euros per square metre, slightly below the previous year’s level. in relation to product quality, rent prices remained stable.

a total of 120 leases were signed in the price segment up

to 10.00 euros per square metre, 32 of which were at

prices of 8.00 euros or less. In the range between 10.01

and 13.00 euros per square metre there were 133 leases.

19 were at prices between 13.01 and 15.00 euros per

square metre. a further 19 leases were in the range

between 15.00 and 17.00 euros per square metre, and

5 exceeded 17.00 euros per square metre.

differing price trends in tHe central busi-

ness district and city centre

In the central business district there was a slight decline

in peak rents, from 18.00 to 17.50 euros per square metre.

In contrast, the average rent in the central business district

rose, from 13.60 euros to 14.30 euros per square metre.

One reason was that numerous leases were agreed for

premises in new buildings, although here the prices were

usually below the peak rate. In addition, premises were

sublet at subsidized prices in buildings that were almost

new. In the city centre the peak rent remained constant

at 14.90 euros per square metre. The average rent fell by

0.30 euros to 11.40 euros per square metre. whereas

there were some leases at high prices, there were a

number of others for older office properties with simple

fittings and equipment.

loW price level in tHe outlying districts to

tHe nortH and east

In the outlying districts to the north (Feuerbach/

Zuffenhausen and weilimdorf) and east (Bad Cannstatt/

Hedelfingen/wangen), most of the available office space

is in existing premises with simple fittings. The average rent

level is correspondingly low. Moreover, there is a fairly low

demand for office space in these districts. Instead of pure

office locations one generally finds a mixture consisting of

skilled trades, car repair shops, petrol stations, beverage

retailers and similar businesses.

looking at these areas in more detail, however, one sees

that there were large transactions at prices below 8.00 euros

per square metre almost everywhere. In some cases these

were interim transactions in older premises or premises in

which most investments were made by the tenants.

14

15

peak and average rentS 2010 in €/Sq. m

20.00

17.50

15.00

12.50

10.00

7.50

5.00

2.50

0

Central business district City centre Outlying districts to the north Outlying districts to the east Outlying districts to the south


peak and average central BuSineSS diStrict rentS 1995–2010 in €/Sq. m

20.00

19.00

18.00

17.00

16.00

15.00

14.00

13.00

12.00

11.00

10.00

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Peak rents

Average rents

Peak rents

average rents

SlIGHT INCREaSE IN VaCaNT OFFICE SPaCE

as expected, the supply of vacant office space increased by 27,000 square metres over the previous year, amounting to approximately 480,000 square metres as of 31 december 2010. with the total office space at about 7.42 million square metres, this corresponds to a vacancy rate of 6.4 percent.

One reason for the increase in 2010 is the fact that some

33,900 square metres of space were added in the form of

newly built premises, plus about 8,500 square metres of

premises that underwent core renovation. another is that

space became available in a number of major existing

buildings that had previously been sublet.

The increase was especially significant in Stuttgart’s central

business district. whereas approximately 51,400 square

metres were vacant in 2009, the supply amounted to

some 71,600 square metres as of 31 december 2010.

when the Postquartier is completed in 2011, another

13,500 square metres of office space will be added. In the

city centre there was an increase in free premises as well,

amounting to about 10,000 square metres.

In weilimdorf the vacancy rate fell by 12,900 square metres

in 2010 to 42,300 square metres. However, little further

improvement can be expected because demand in recent

years has been relatively low and the supply is much too

large in relation to the size of the location. In leinfelden-

Echterdingen the vacancy rate increased owing to the

relocation of an IT service provider to a new office

building, which freed the space in its former headquarters.

Beyond this, the vacancy rate in the outlying areas

remained constant.

whereas only 42,400 square metres were completed in

2010, the completion volume in 2011 will amount to

about 71,500 square metres of office space. This includes

some 25,600 square metres of office space undergoing

core renovation.

vacant office Space aS of 31 decemBer 2010

Stuttgart central business district116,900 sq. m

Bad Cannstatt, wangen etc.19,700 sq. m

Stuttgart city centre73,100 sq. m

weilimdorf42,300 sq. m

15% 9% 24% 4%

16

17


100%

Bad Cannstatt, wangen etc.19,700 sq. m

degerloch11,700 sq. m

Fasanenhof28,200 sq. m

Möhringen30,100 sq. m

weilimdorf42,300 sq. m

leinfelden-Echterdingen75,100 sq. m

Feuerbach, Zuffenhausen27,200 sq. m

Vaihingen55,700 sq. m

16% 6% 12% 2% 6% 6%

completion volume in Sq. m

350,000

300,000

250,000

200,000

150,000

100,000

50,000

0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


Building completionPre-letting

The marked increases in rental turnover reflected improved

economic figures for many businesses and the accom-

panying rise in demand for office space.

In the Big Seven (Berlin, düsseldorf, Frankfurt, Hamburg,

Cologne, Munich, Stuttgart) the total rental turnover

amounted to some 2.74 million square metres, an increase

of roughly 19 percent over the previous year. Stuttgart

likewise posted a turnover gain of about 14 percent.

Most of the demand came in the second half of the year.

The peak rents varied widely from city to city. whereas

Berlin, düsseldorf and Frankfurt showed slight gains,

Munich experienced a drop of 1.00 euro, down to 28.00

euros per square metre. Stuttgart also registered a slight

decline, but the peak rent here remains stable at 17.50

euros per square metre.

In spite of the rise in rental turnover throughout the

country, the supply of office space at the end of 2010

increased. That was because many older buildings no

longer found users, which contributed to a significant

gain in vacant office space. another factor affecting

vacancy was the addition of newly built premises. In

Munich, for example, a number of projects launched in

2007 and 2008 reached completion and were put on the

market. Now that the economic forecast is favourable,

the demand for office space, in particular modern premises,

can be expected to rise. Thus there will be a decline in

vacancies in the years ahead.

UPTURN IN THE OFFICE MaRKET THROUGHOUT GERMaNY

in 2008 and 2009, the rental take-up in all german cities was affected by the economic crisis. in 2010, however, a distinctly positive trend emerged, and in some areas expectations were exceeded.

18

19

Stuttgart compared to other german citieS

rental volume in sq. m peak rent in € average rent in the central business district in € vacancy rate in %

2010 2009 2010 2009 2010 2009 2010 2009

berlin 425,000 420,000 20.50 20.20 14.00 15.00 8.9 8.4

düsseldorf 370,000 232,000 23.50 22.50 16.50 16.50 11.5 10.3

frankfurt a. m. 500,000 360,000 35.60 35.00 22.00 22.00 15.1 14.3

Hamburg 440,000 387,000 23.00 24.00 13.50 13.50 9.8 7.5

cologne 220,000 200,000 20.00 21.00 11.25 12.50 8.9 8.3

munich 590,000 530,000 29.00 13.00 14.20 13.90 8.2 8.1

stuttgart 194,000 171,000 17.50 18.00 14.30 13.60 6.5 6.5


compariSon of vacancy rateS in germany in %

20

15

10

5

0

Frankfurt düsseldorf Cologne Munich Berlin Hamburg Stuttgart

2006

2007

2008

2009

2010


turnover of Space of the “Big Seven” in Sq. m

900,000

800,000

700,000

600,000

500,000

400,000

300,000

200,000

100,000

0

2003 2004 2005 2006 2007 2008 2009 2010

Munich

FrankfurtHamburgBerlinDüsseldorf

CologneStuttgart


CENTRal STUTTGaRT: BIG POTENTIal FOR NEw GROwTH

in 2010, the rental volume in the central business district, that is, the area within the city ring and the surrounding parts of the city centre amounted to some 99,400 square metres. this represents a decline of 22,600 square metres, or roughly 23 percent, from the previous year.

33 percent of this rented space, or about 32,800 square

metres, was in the central business district. This figure is

similar to that for 2005, when turnover was comparatively

low. Thus the forecasts made in past years of a steady

decline in rental figures owing to a lack of new buildings

have been confirmed. Recently, however, a number of

new projects have been launched to fill the need for

large, contiguous premises. In addition, since 2010 about

15,000 square metres of sub-let space in almost-new

premises have been on the market. In contrast, the

surrounding parts of the city centre showed the second

highest rental take-up of the last ten years: 66,600 square

metres. This demonstrates that many businesses think it

is important to have a central location.

67 percent of all new leases in central Stuttgart were for

premises in the city centre. In the central business district

about 12 percent more leases were signed than in the

previous year, even though the rental volume here was

lower.

whereas about 58 percent of the premises in the central

business district were let for less than 14.00 euros per

square metre in 2009, the figure was only 37 percent in

2010, an encouraging development. In the price segment

between 14.01 and 16.00 euros per square metre, the

proportional share rose from 29 percent in 2009 to 48 per-

cent in 2010. In 2010, 14 percent of all leases were signed

for 16.01 euros per square metre and above, roughly the

same as the previous year’s figure of 12 percent.

In the city centre 92 percent of the premises were let for

less than 14.00 euros per square metre, as compared to

83 percent the previous year. The segment up to 500

square metres accounted for 28 percent of leases, an

increase of 10 percent. 53 percent of leases were in the

segment up to 1,000 square metres. This was an increase

of 20 percent over 2009.

about 15 percent of the premises, corresponding to some

5,100 square metres, were let at prices above 16.01 euros

per square metre. This is a decline of approximately 38

percent. In 2011, an increase can be expected in this seg-

ment.

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NORTHERN STUTTGaRT: NEw CONCEPTS NEEdEd

feuerbacH/ZuffenHausen

a transaction for about 22,000 square metres on the xcel

BusinessCampus in Zuffenhausen reflects the new confi-

dence in the automotive engineering and component

supply industries, which have always been strong here.

In past years the economic recession led to a significant

decline in rental figures in this sector. Thanks in large part

to the new transaction, the rental take-up is now at a ten-

year high.

In addition, a private educational institution has concluded

an important lease agreement for 5,000 square metres in

the OaSIS II project in Feuerbach. Together, the two

transactions account for about 95 percent of the total

rental volume.

The other transactions were mostly in the segment up to

500 square metres and at prices of 9.00 euros per square

metre and below. Only 18 percent of the leases were

signed at a price between 12.00 and 13.00 euros per

square metre.

Weilimdorf

weilimdorf also showed surprisingly good results, thanks

to a large rental transaction concluded by an IT/tele-

communications company for about 5,400 square metres

and another for approximately 2,200 square metres. The

total rental volume was 66.7 percent of the total turnover,

which came to about 11,400 square metres.

This is especially gratifying, because the location has been

experiencing a decline in transactions in recent years. The

average rental take-up in the past decade was only about

7,800 square metres per year.

The planned relocation of the auditors Ernst & Young to

the Stuttgart airport in 2015 will worsen the situation,

however, increasing the vacant office space by 45,000

square metres. as a result, it will be necessary for govern-

ment authorities and owners to address the problem of

the area’s overall structure.

a total of 10 leases were signed, 6 of which were for

premises below 500 square metres. For 8 leases the price

was less than 9.00 euros per square metre, and for 2 it

was between 9.00 and 10.00 euros per square metre.

EaSTERN STUTTGaRT: IN a waITING POSITION

bad cannstatt/Wangen/Hedelfingen

In the past two years, following the successful marketing

of new buildings such as the Cannstatter Carré and the

Otto Hirsch Center and of large, favourably priced

premises like the Kodak areal in Hedelfingen, eastern

Stuttgart has seen a significant decline in rental take-up.

In 2010, a volume of only about 8,300 square metres was

achieved.

work on the 22-hectare Neckarpark project, a new urban

district comprising apartments, offices and mixed use on

the site of the former goods station, has been halted. The

city of Stuttgart is now reviewing the financing. Besides

this, no other projects are being planned. New premises

therefore cannot be expected in eastern Stuttgart in the

near future.

In the segment of 500 square metres and less, 9 leases

were signed for a total of about 2,060 square metres,

corresponding to about 25 percent of the total rental

take-up. 38 percent of the premises were in the segment

between 501 and 1,000 square metres, and 37 percent

were between 1,001 and 2,000 square metres.

60 percent of the premises in eastern Stuttgart were let

for less than 8.00 euros per square metre, and roughly

32 percent were let at prices between 8.00 and 10.00 euros

per square metre. about 8 percent of the premises were

in the price segment above 10.00 euros per square metre.

This is a clear sign that most of these premises were in

older existing buildings.

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SOUTHERN STUTTGaRT: POSITIVE dEVElOPMENT CONTINUES

degerlocH

with its direct access to central Stuttgart and to the B27

highway, the a8 motorway and the airport, degerloch is

undoubtedly one of the most attractive locations in the

region. In spite of this, the rental figures here have

declined for two years running. In 2010, the total volume

was 2,100 square metres.

The majority of the new leases were in the segment up to

500 square metres, and 2 were for premises between

501 and 1,000 square metres. The transactions were

equally divided between the Tränke area and the area

surrounding albplatz.

35 percent of the premises were let for prices below 12.00

euros per square metre, 65 percent were in the segment

between 12.00 and 13.00 euros per square metre.

The only new building project currently being marketed

in degerloch is wilhelmshöhe. Completion is planned for

the first quarter of 2011. Tenants have already been found

for 65 percent of the new premises. Further projects are

not expected.

leinfelden-ecHterdingen

In leinfelden-Echterdingen, following a severe decline in

2009, leases were signed in 2010 for a total of 12,800

square metres of office space. This was an encouraging

development. There were 31 signings, an increase of 230

percent. The location generated particular interest among

IT and telecommunications companies.

Roughly 41 percent of the rented premises were in the

segment up to 500 square metres. The segment between

501 and 1,000 square metres accounted for 27 percent of

the leases. In addition, there was one contract for 4,000

square metres, signed by a consulting company.

63 percent of the premises were let for less than 9.00 euros

per square metre. 25 percent were in the segment between

9.01 and 10.00 euros per square metre. For approximately

11 percent of the premises the price was between 11.00

and 12.00 euros per square metre.

fasanenHof

In early december 2010, Fasanenhof was connected to

the urban railway, allowing Stuttgart’s main railway station

to be reached in 26 minutes. This considerably added to

the location’s attractiveness. a significant revival of the

market was detectable already during that year. Turnover

of space rose from 2,300 square metres in 2009 to 5,300

square metres in 2010.

30 percent of the rented premises was in the segment up

to 500 square metres. In the segment between 1,001 and

2,000 square metres and between 2,001 and 3,000 square

metres there was 1 lease for an energy company and 1 for

an insurance company. 90 percent of all leases were in the

range from 9.00 to 10.00 euros per square metre.

For alphaHaus Stuttgart, the former headquarters of

debitel aG, a renovation concept has now been decided on.

These premises, which cover about 12,000 square metres,

will thus soon be available for a new user. The Business

Park is likewise being refurbished to meet modern office

requirements. The entire ensemble is to be redeveloped

by architects and engineers.

vaiHingen/möHringen and step

The Vaihingen/Möhringen area, and especially STEP,

which celebrated its tenth anniversary in 2010, continues

to be one of the most sought-after office locations in

southern Stuttgart. The total rental volume in 2010 was

26,200 square metres, about 30 percent more than in

2009. STEP accounted for 61 percent of the newly rented

space.

35 percent of the rented premises were in the segment

below 500 square metres or between 501 and 1,000 square

metres. 19 percent were between 1,001 and 4,000 square

metres. There was 1 lease with an IT service provider

be tween 4,001 and 5,000 square metres and another with

a user in the same sector for more than 5,001 square metres.

For 68 percent of the rented premises the price was

between 10.00 and 12.00 euros per square metre, and

for 25 percent the price was between 12.00 and 13.00

euros per square metre.

The STEP 8.2 office project, like its predecessor STEP 8.1,

was fully let before construction was finished. Completion

is scheduled for the first quarter of 2011. These projects

have been so successful that planning has already begun

for STEP 8.3.

The former IBM complex has been significantly improved

through a renewal of the grounds and the ensemble itself.

It is now called Carré 5. The attractive buildings, located

on some 40,000 square metres of campus-like terrain, are

ready to be let. an IT service provider has already signed

a contract for some 4,900 square metres.

a number of other projects are also under way in Vaihingen/

Möhringen. Planning rights have already been secured,

and construction can begin as soon as sufficient advance

rental agreements are in place.

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motorway intersection stuttgart

a 81

a 8 towards munich

EasternStuttgart

CentralStuttgart

NorthenStuttgart

Western Stuttgart

Southern Stuttgart

a 81 towards Heilbronn

OVERVIEw OF THE STUTTGaRT OFFICE MaRKET

a 81 towards singen

a 8 towards Karlsruhe

Industrial/office locations

> 40,000 sq.m

30,000 – 40,000 sq.m

20,000 – 30,000 sq.m

10,000 – 20,000 sq.m

< 10,000 sq.m

Gewerbe-/Bürostandorte

ab 40.000 m2

30.000 – 40.000 m2

20.000 – 30.000 m2

10.000 – 20.000 m2

< 10.000 m2

Industrial/office locations

> 40,000 sq.m

30,000 – 40,000 sq.m

20,000 – 30,000 sq.m

10,000 – 20,000 sq.m

< 10,000 sq.m

Turnover of office space in 2010

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This positive trend can be expected to continue in 2011,

as there are signs that demand will stay high. we are

therefore anticipating an office space turnover of approxi-

mately 200,000 square metres.

peaK rents on tHe rise

In the past year no uniform trend could be discerned in

Stuttgart’s price structure and in the size of premises.

In the light of the figures for other major cities, Stuttgart’s

peak rent of 17.50 euros per square metre is favourable.

It is still possible here to find office space of like-new

quality at good terms. However, rising property prices and

a short supply of vacant space are making it increasingly

difficult for project developers to implement new con-

struction projects at low cost. Thus the peak rent can be

expected to rise in the medium term.

increasing demand for modern premises

Moreover, users who are willing to pay high prices for

premises are putting increasingly higher demands on the

quality of buildings and locations. a modern energy

standard like a lEEd or dGNB certification, for example,

is becoming more and more important in leasing deci-

sions, as are the efficient use of space and a prestigious

atmosphere. Correspondingly, older existing buildings

that have been renovated in a superficial manner, like be-

ing given a new colour scheme, are very hard to position

on the market. as always, high service charges and ineffi-

cient use of space make continuous rent reductions nec-

essary in order to maintain a building’s competitiveness.

In conclusion, it can be said with confidence that rising

requirements will create a continued strong demand on

Stuttgart’s market for office space of high quality.

UPSURGE IN STUTTGaRT’S OFFICE MaRKET

in 2010, 301 leases were concluded in Stuttgart’s office market, 45 more than in the previous year. the total rented space, 194,000 square metres, was the highest in the last ten years.

YOUR CONTaCTS

ellwanger & geiger privatbankiers is the ideal partner for marketing your office properties. our many years of experience and unique range of services enable us to move the market and proactively identify trends. for us, having a sixth sense isn’t a supernatural ability but simply part of the service we offer you. our team in Stuttgart is looking forward to your call or visit. contact us: phone +49 (0) 711 2148 297 or fax +49 (0) 711 2148 290. on the internet: www.privatbank.de · www.bueroflaeche-stuttgart.de

Sebastian degen

Consultant Office letting

Phone +49 (0) 711 2148 166

[email protected]

alice disam

assistant Office letting

Phone +49 (0) 711 2148 297

[email protected]

Ulrich Nestel

Head of Office letting and

Retail Projects, Stuttgart

Phone +49 (0) 711 2148 291

[email protected]

Matthias Hägele

Consultant Office letting

Phone +49 (0) 711 2148 292

[email protected]

Helga Schöner

Market Research and Office letting

Phone +49 (0) 711 2148 269

[email protected]

DISCLAIMER:

although this study has been prepared

with all due care, EllwaNGER & GEIGER

Privatbankiers accepts no liability for the

correctness of the assessments presented.

we are sure that you will understand this.

illustrations:

Manfred Storck: Pages 2, 3

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THE STUTTGART OFFICE MARKET 2010 / 2011

Real Estate

Transcript of THE STUTTGART OFFICE MARKET 2010 / 2011