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Take-up of 123,300 m² is the weakest result of the last five years in Hamburg

Despite high demand, the important German logistics market Hamburg posted the weakest result of the last five years with take-up of 123,300 m², according to the latest half-year report by the property consulting company Realogis. Whereas 72% (88,700 m²) of the total take-up of rental space for logistics, commerce and industry was generated in the first quarter of 2019, the period from April to June 2019 only contributed 34,600 m².

“The significant decline is due to the fact that new-build project developments are no longer possible in one of Germany’s most important logistics markets, despite high demand, because no plots of land are being designated in the city or in the respective metropolitan areas still,” says Jörg Lojewski, Managing Director of Realogis Immobilien Hamburg GmbH, with regard to the trend.

The market shrank by 46% compared to the same period of the previous year (230,000 m²) and fell short of the five-year average (212,660 m²) by 42%. This is also reflected in the lower number of major deals: Only one lease in this category was signed in the first six months. This was a lease for 30,000 m² of logistics space in the Port of Hamburg for the trading company nutwork.

As a result, the size category of 10,000 m² or more accounted only for 24% of the overall market. As in the first half of the previous year, the most space – at 29% (35,600 m²) – was brokered in the size segment of less than 1,000 m², followed by 18% (21,900 m²) for property units between 5,001 m² and 10,000 m², 15% (18,000 m²) between 1,001 m² and 3,000 m², and 14% (17,800 m²) between 3,001 m² and 5,000 m².

„While the highest share of total take-up was attributable to southern Hamburg as usual, which accounted for 65% or 80,600 m² in the first half of the year, the eastern part of the city accumulated 25% or 30,500 m²,” reports Irina Lysenko, research analyst at the Realogis Group.

As in the same period of the previous year, companies from the logistics sector accounted for the highest take-up (47%, 58,200 m²). The commerce sector’s share came to 38% (46,600 m²), while production was in third place as usual at 7% (8,500 m²).

Compared to other top logistics locations in Germany and despite the shortage of space, the prime rent rose only by 3% in the past six months to €6/m², a level that established itself primarily in the southern and eastern regions of Hamburg. The average rent also saw a slight increase from €4.80/m² at the end of 2018 to €4.90/m² (up 2%). In addition, the rent range in the surrounding area to the south increased and now spans €4.50–5.00/m², whereas at the end of 2018 it had been €4.30–4.70/m².

Relevant deals in H1 2019 were:
• Nutwork Handelsgesellschaft mbH, Hamburg South, 30,000 m²
• TCO Transcargo GmbH, Hamburg South, 8,400 m²
• MyCargoLogistic, Hamburg South, 7,500 m²
• Wördemann GmbH, Hamburg East, 6,000 m²
• Darguner Brauerei GmbH, Hamburg South, 4,500 m²

Outlook for 2019 as a whole: As forecast by Realogis at the end of last year, the limited supply of space means that the rental market for industrial and logistics space will not be able to match the previous year’s result, despite continued strong demand.

“We anticipate a more significant upturn in the second half of the year,” says Jörg Lojewski. “As a result of contract terminations in existing buildings in the Port of Hamburg area, the supply of large-volume contract logistics space will increase. This will add around 70,000 m² to the market. In this context, and in view of a strong occupancy rate in the small-size segment of up to 3,000 m², we expect take-up of rental space to total approximately 370,000 m² for the year as a whole.” According to Realogis, it would thus fall short of the 2018 result by 24% and would be 27% below the five-year average.