PROPERTY MARKET IN BERLIN AND EASTERN GERMANY 2015
BerlinDresden
LeipzigErfurt
Magdeburg
Potsdam
Rostock Jena
PROPERTY MARKET IN BERLIN AND EASTERN GERMANY 2015
Editorial 5
Executive Summary 6
Economic environment 10
Berlin 10
EasternGermany 12
Interview: DekaBank “Polarisation between
the most desirable cities and areas with declining population” 17
Transactions market 20
Berlin 20
EasternGermany 22
Office property market 24
Berlin 24
EasternGermany 26
Retail property market 30
Berlin 30
EasternGermany 33
Hotel property market 36
Berlin 36
EasternGermany 38
Listofsources 40
Contacts 42
Companyandlegalinformation 43
Contents
4 |Contents
Lastyear–some25yearsafterGermanreunification–east-
ern Germany recorded economic growth that can stand
comparison with Germany as a whole. According to the
WorkingGrouponNationalAccountsoftheGermanFederal
States,theoveralleconomyintheeasternGermanFederal
Statesgrewin2014by1.6%inrealterms.Thismeansthat
theeasternGermaneconomygrewatthesamerateasfor
Germanyasawhole.BerlinevenrecordedariseinrealGDP
of2.2%comparedtothepreviousyear.Thisisreflectedin
the increaseddemand for commercial real estate in line
withthecontinuedpositivetrendsinkeymarketindicators.
Inanumberoflocations,sizeoftheofficeworkforceand
spendingpowerwereontherisewhiletheunemployment
rate fell. What is more, tourism in the city continued to
flourish.InvestorsarekeenonGermancommercialproper-
ties–whetheroffices,retailpropertiesorhotels.Themar-
ket for commercial property investments in Berlin grew
in 2014 by around 19% compared to the previous year.
In eastern Germany, investment sales doubled in 2014
comparedto2013.
Thisyear,ourreport,“PropertyMarketsinBerlinandeast-
ernGermany”,looksathowthecommercialsub-markets
are benefiting from the robust economy. Besides Berlin,
which has expanded its leading position in the retail
segment even further, the large eastern German cities
arealsoworthalook.RentsofofficespaceinLeipzig,for
example, rose sharply in2014 compared to2013due to
growth in white-collar employment. It is also clear that
bothB-ratedcitiesandBratedorsub-centrelocationsare
increasinglyindemand.
Formorethan20years,TLGIMMOBILIENhavebeenactive
portfoliomanagersinBerlinandthegrowthregionsofeast-
ernGermany. InadditiontoBerlin,ourbusinessactivities
aretfocusedonthelargeeasternGermancitiesofDresden,
LeipzigandRostock.Furthermore,theregionalcentresand
importantsubmarketsofErfurt,Jena,MagdeburgandPots-
damalso occupy a prominent place in this report,which
discusses indetail the transaction,office, retailandhotel
property markets. The importance of analysing the
economic and demographic environment, as well as
currentmarkettrends,isclearlyhighlightedintheinterview
withDr.UlrichKater,ChiefEconomistofDekaBank,onpage
17to19.Oneofthecoremessagesoftheinterview,namely
the “Polarisation between the most desirable cities and
areaswithdecliningpopulation”,isthatthisissuewillhave
afargreatereffectontherealestatemarketsinthefuture
thanhasbeenthecasesofar.Wewishtotakethisoppor-
tunitytothankDr.Katerforhisinput.
Localexpertiseandtheabilitytoidentifytrendsaheadof
thepackareamongthekeyfactorsdeterminingthesuccess
ofinvestmentinrealestate.Asinpreviousyears,theaimof
thisreport,whichalsoincorporatesthemarketexpertiseof
ourlocalteams,istocontributetoincreasedmarkettrans-
parency.Wewishyouanenjoyableandinsightfulread!
Berlin,September2015
PeterFinkbeiner NiclasKaroff
MitglieddesVorstandes MitglieddesVorstandes
Ladies and Gentlemen,
PeterFinkbeinerandNiclasKaroff
BERLIN STRENGTHENS ITS LEAD,
STRONG MOMENTUM IN LEIPZIG
The Report “Property Markets in Berlin and eastern Ger-
many”,publishedbyTLGIMMOBILIENsince1992,offersnot
onlydetailedinsightsintothecommercialpropertymarket
oftheGermancapital,butalsogivesanoverviewofreal
estate markets in the eastern German cities of Dresden,
Erfurt, Jena, Leipzig, Magdeburg, Potsdam, and Rostock.
WhiletheboomingpropertymarketinBerlinkeepsattract-
ing increasing amounts of capital, Leipzig, Dresden and
Rostockappealwithsolidfundamentalsandrisingrents.
BERLIN
Office property market in Berlin:
Vacancy rate drops to 5 %, rising average rents
and stable prime rents
In2014,realGDPinthecapitalgrewby2.2%overthepre-
viousyear,whichissignificantlyhigherthantheGerman
average (+1.6%).1 Thispositiveeconomicdevelopment is
reflected inasharp rise in thenumberofofficeworkers.
In 2014, the office workforce in Berlin reached 695,400,
anincreaseof2.7%comparedtothepreviousyear.2Growth
inBerlin’seconomyandofficeemploymentismainlydriv-
enbytheservicesector.Thishashadadirecteffectonthe
availabilityofofficespace–the2014vacancyrateof5%
wasvery lowcomparedwithothermajorGermancities;
in 2011, it was 7%.3 The high demand was reflected in
averagerentsforofficespaceinBerlin,whichroseby7.3%
in2014comparedto2013.Intheprimesegment,however,
rentsremainedlargelyflat(+2.3%),4withrentsinprimeof-
ficelocationsinBerlinrangingbetweenEUR20and23/sqm.
Retail property market in Berlin:
Prime rents reach EUR 300/sqm as the capital attracts
international retailers
Conditions in Berlin’s retail property market are particu-
larlyencouraging:whiletheunemploymentratedropped
furtherfrom11%to10.5%betweenJune2014andJune
2015,Berlin’sper capita retail spending roseby3.4% in
2014toEUR5,493.TheSpreemetropolisagainregistered
a record number of overnight stays last year, reaching
almost28.7million.Thesefactorsexplaintosomeextent
thepopularityofBerlinasa retail location.According to
Jones Lang LaSalle (JLL), Berlin, together with Munich,
is among the 10 most attractive retail destinations in
Europeandisseenasanimportantgatewaybyinternation-
alretailerslookingtoexpandtoEurope.5Intermsofrent
growth,primelocationsandcentralbusinessdistrictsben-
efitedmostfromthehighdemandforspace.Retailrents
inprimelocationsonceagainrecordedthefastestgrowth
in2014.While in2013,rentsfor largerprimespaceover
150 square metres increased from EUR 180 to 250/sqm
year-on-year, in 2014, they climbed up to EUR 300/sqm.
Atthesametime,rentsforsmallerspacesupto100square
metresalsoshowedsignificantgrowth.InBerlin’scommer-
cialcentres,toprentsreachedEUR180/sqminsomecases
in2014–representingayear-on-yearriseof12.5%.
1 FederalStatisticalOffice2 bulwiengesa20153 bulwiengesa20154 SavillsResearch
5 JLL(2014):pressreleasedated27.11.2014,MunichandBerlinamongthetenmostattractiveretaillocationsinEurope
EXECUTIVE
SUMMARY
6 |ExecutiveSummary
Hotel market in Berlin:
Higher room revenues and occupancy rates
despite competitive pressures; Berlin added
1,700 new hotel rooms in 2014
In 2014, some 12 million tourists checked into Berlin’s
hotels, representing nearly 28.7 million overnight stays.
The record result with a year-on-year surge in overnight
staysof6.5%6ismainlyattributabletoBerlin’simportant
roleasabusinessandholidaydestination.Itshighappeal
to both groups often results in higher and more stable
roomoccupancyratesinthecapital.In2014,theaverage
roomoccupancyofhotelsinBerlinreachedarecordhigh
of74.2%.Inaddition,in2014,revenueperavailableroom
(RevPAR)increasedinBerlinbyaround4.2%yearonyear
toEUR66.35.Theaveragedailyrate(ADR)reachedEUR89
(+2%)andwasthusEUR2abovetheGermanaverage.7
Investment market in Berlin:
Transaction volume 27 % above the
10-year average
In 2014, Berlin’s market for investment in commercial
property registeredgrowthofaround19%yearonyear
andreachedatransactionvolumeofnearlyEUR4.28bil-
lion. This is 27%above the 10-year average and is the
bestresultsince2007.Theenduringgrowthin2013–2014
isprimarilyattributabletoinvestmentinhotelproperties,
development sites and mixed-use properties. Although
some of these segments have increased their turnover
sharesignificantly,thebiggestslicewasagaincommand-
edbyofficeproperties,witharound40%ofthetotal in-
vestmentvolumein2014(EUR1.72billion).8Whilein2014,
investmentinofficepropertiesinBerlinroseby6.1%year
on year, investment in retail properties fell by around
31%.9 This ismainlydue to the fact that long-termbuy-
erswanttoholdontothepropertiespurchasedinrecent
years10,thuscreatingasupplyconstraintinthemarket.
6 AmtfürStatistikBerlin-Brandenburg(2015)[Berlin-BrandenburgStatisticsOffice]:Pressreleasedated18.2.2015“TourismusinBerlinauch2014wiedermitneuenHöchstzahlen”[TourisminBerlinagainpostsrecordfigures]
7 ColliersInternational(2014):HotelmarktBerlin[HotelmarketinBerlin]2014/2015,PwC(2015):Roomforgrowth–Europeancitieshotelforecastfor2015and2016for20gatewaycitiesfromAmsterdamtoZurich,STRGlobal2015
8 BNPParibasRealEstate(2015):InvestmentMarketGermany–PropertyReport20159 BNPParibasRealEstate10CBRE(2015):InvestmentmarketinBerlin,4/2014
ExecutiveSummary| 7
EASTERNGERMANY
Office markets in eastern Germany:
Growth in white-collar employment
reflected in falling vacancy rates
TheofficepropertymarketsineasternGermancitieshave
benefited from the favourable conditionsandgrowth in
theGermaneconomy. The unemployment rate inmany
largereasternGermanycitieshasbeenfallingatasteady
rate.WiththeexceptionofPotsdam,white-collaremploy-
ment in eastern German cities rose in 2013–2014, with
LeipzigandJenashowingstrongestgrowthatjustunder
4%and2.6%respectively.Positivetrendswerealsoseen
intheDresdenandRostockofficemarkets,whichgrewby
1.6%and1.2%respectively.Astheconstructionofnew
offices isnotquitekeepingpacewiththegrowth inthe
workforce,vacancyratescontinuedtofalllastyearinsix
ofthesevencities.AlthoughPotsdamisnotamongthem,
itdoeshavethelowestsupplysurpluswithavacancyrate
of4.9%,followedbyRostockwithanofficevacancyrate
of7.6%.Positivedynamicsintheemploymentmarketdid
notaffectpropertymarketsintheeasternGermancities
tothesameextent.InDresdenandMagdeburg,rentlev-
elsacrossallofficesegmentsremainedflatcomparedto
the previous year. In contrast, top rents for offices with
goodutilityvalueinLeipzigrosebyaround4%compared
with2013,reachingEUR12.50/sqm.
Retail markets in eastern Germany:
Higher purchasing power and rising rents – not only
in central business districts
While retail spending power in most growth regions
of eastern Germany is still below the German average,
ithasbeenrisingsteadily inmost largeeasternGerman
cities,withLeipzigrecordingthehighestincreaseof8.3%
between 2011 and 2014. At EUR 5,672 per head, Pots-
damsurpassedtheGermanaverageofEUR5,657forthe
firsttimein2014.11Leipzigscoreshighlybothintermsof
purchasingpowerandrent levels.Leipzigcommandsthe
highestprimerentsforlargerandsmallerretailspacesin
centralbusinessdistricts (EUR85/sqmandEUR130/sqm,
respectively).Rentsoutsideprimelocationsarealsoonthe
rise.InRostock,rentshavebeenrisingmainlyinsub-cen-
trelocations.Toprentsforlargerareasover150squareme-
tresreachedEUR11.50/sqm,representinga4.5%increase
compared to theprevious year. Rents for smaller spaces
up to 100 squaremetres in sub-centre locations roseby
aroundone-thirdfromahighofEUR30upto40/sqm.
11 GfKGeoMarketing,2015
EXECUTIVE
SUMMARY
8 |ExecutiveSummary
Hotel markets in eastern Germany:
Dresden, Leipzig and Rostock are setting the pace
Dresden and Leipzig are increasingly turning into tourist
magnetsandin2014theyrecordedthehighestnumberof
overnightstaysofalltheeasternGermancities(excluding
Berlin) with a combined total of 7.2 million. In Dresden,
overnightstaysshotupby7.6%,thesharpestriserecorded
inanymajoreasternGermancity–includingBerlin!Asin
thepreviousyear,hotels inRostockandLeipzigrecorded
thehighestrevenueperavailableroom(RevPAR)withEUR
63.78andEUR52.25respectively.Itis,therefore,hardlysur-
prisingthathotelsinthesetwocitieshavethehighestroom
occupancyratesatcloseto69%,andaveragedailyrates
andEUR92.91(Rostock)andEUR75.82(Leipzig).Dresden
commanded the third highest average daily rate at EUR
72.2012, increasingitsoccupancyratesubstantiallyto just
under67%in2014.
Investment markets in eastern Germany:
Investment in commercial properties doubles
An analysis of the eastern German states (excluding
Berlin) shows increased investor interest in smaller
markets. Investment turnover doubled here in 2014
compared to2013 fromEUR1.36 to2.7billion.13 Leipzig,
inparticular,isoneofthemostdynamiccitiesinGermany
andisincreasinglysoughtafterbyinvestorsthankstoits
above-averageGDPandpopulationgrowth.14Investment
volumeinthiscity,famousforitstradefairs,doubledin
2014 compared to 2013. Last year, EUR 516 million was
invested in commercial real estate in Leipzig, the bulk
of which went into retail (36.6%) and office properties
(26.9%).Besidesthesesectors,transactionvolumesalso
rosesharplyinthelogisticsandhotelsegments15,which
speaksvolumesforthegrowingimportanceofLeipzigasa
logisticshubandasadestinationforbusinessandleisure
travellers.
12 StatistischeLandesämter[StatisticalOfficesoftheGermanLänder],STRGlobal20113 Savills(2015):AnalysisforTLGIMMOBILIENAG14 Aengevelt(2015):Pressreleasedated17.4.2015,Leipzig–DeutlicherUmsatzanstieg
[Leipzig–sharpincreaseinsales]15 BNPParibasRealEstate(2015)
ExecutiveSummary| 9
BERLIN’S PROPERTY MARKET: FLOURISHING
ECONOMY OPENS INVESTMENT OPPORTUNITIES
Largest investment opportunities – Property markets
ingeneral,and thepropertymarket in theGermancapital
inparticular,arebenefitingfromincreasedinvestordemand.
Thisisfuelledbylowyieldsinmanyassetclasses.Whilethere
arefeweravailablepropertieseveninBerlinthankstointense
competition for lucrative properties, prices are moderate
comparedtoLondon,ParisorMunich.Accordingtothereport
“EmergingTrendsinRealEstateEurope2015”,publishedbythe
UrbanLandInstitute(ULI)andPricewaterhouseCoopers(PwC),
Berlin ranksfirstas thecitywith thebest investmentpros-
pects in the realestatemarket.The report isbasedonsur-
veysandinterviewswitharound500influentialleadersinthe
realestateindustryinEurope,includingfundandinvestment
managers,projectdevelopers,assetandpropertymanagers
andfinanciers.AsMunichisperceivedbymanyinvestorsto
be tooexpensive, investmentmaynotbeworthwhileany-
more.Asaresult,Munichdroppedfromthetopspotitheld
inthesurveylastyeardownto11thplacein2015.Incontrast,
Berlinclimbedfrom4thlastyeartobecomethetop-ratedcity
in2015.Theassessmentofmarketexpertsismainlybased
onlowpricesandexcellentfundamentalscomparedtoother
Europeancities.16
Decliningunemployment17alongwithpopulationgrowth18
and rising spending power19 are great conditions for
successful long-term investment in Berlin’s commercial
property market. Other positive factors include Berlin’s
buoyanteconomyandthegrowingnumberofvisitorswho
generateaquarterofretailsales.20Whilein2013–2014the
numberofovernight stays inBerlin increasedbyaround
6.5%,between2012and2014,itsoaredby15.2%.21
Comparedwithothertopcitybreakdestinations–suchas
MunichorHamburg–thesegrowthratesareremarkable:
Between 2012 and 2014 the number of overnight stay-
sincreased by nearly 13% in Munich and by 8.5% in
Hamburg.22 At the same time, it is not just the tourism
industry that is growing. According to the economic re-
portpublishedbytheChamberofIndustryandCommerce
in Berlin-Brandenburg, businesses are feeling optimis-
ticabout thecomingmonths. Industrialandconstruction
companies, retailers and service providers all expect
theeconomytocontinue togrow in thecomingmonths.
The weak euro is boosting Berlin’s exports and tourism.
16 ULI/pwc(2015):EmergingTrendsinRealEstateEurope2015,p.29/30/7417 BundesagenturfürArbeit[FederalEmploymentAgency](02/2015):numberofunemployed
andtheunemploymentrate18 AmtfürStatistikBerlin-Brandenburg(2015)[Berlin-BrandenburgStatisticsOffice]19 GfKGeomarketing(2015)
20 DGHYP(2015):RegionaleImmobilienzentrenDeutschland[Mainregionalrealestatemar-ketsinGermany],p.18
21 AmtfürStatistikBerlin-Brandenburg[Berlin-BrandenburgStatisticsOffice]22 StatistischesAmtfürHamburgundSchleswig-Holstein[StatisticalOfficeforHamburgand
Schleswig-Holstein]:pressreleases;BavarianStateOfficeforStatistics:datarequests
Berlin:Europeancitywiththebestinvestmentprospectsintherealestatemarket
10 |EconomicenvironmentinBerlin
Thisissupportedbythebusinessconfidenceindexofthe
capitalregion,whichmeasuresthelevelofoptimismabout
prospectsfeltbybusinesses.At128pointsatthestartof
2015, the index was just one point below the previous
year’slevel,but10pointsabovethe118pointsrecordedat
thebeginningof2013.23
Magnet as a workplace–Berlin’spopularityismanifesting
itselfnotonlyintheincreasingnumberofovernightstays,
butalsointermsofpopulationgrowth.Between2009and
2013,thenumberofresidentsintheGermancapitalrose
by roughly 160,000, equivalent to the entire population
oftheneighbouringcityofPotsdam.24BytheendofJune
2014,thepopulationhadgrownby47,000whencompared
withtheendofJune2013.25Theincreasingsupplyofjobs
inBerlinisanimportantfactordrivingthegrowthinthe
number of inhabitants. According to City Ranking 2014
publishedbytheCologneInstituteforEconomicResearch,
Wirtschaftswoche and Immobilienscout 24, the jobs sup-
plyincreasedby7.7percentagepointsbetween2008and
2013,comparedwiththeaveragegrowthof4.4%record-
edacrossall69citiesincludedinthecomparison.Inaddi-
tion,netbusinessregistrationsamountedto3.4per1,000
inhabitantsin2013.Berliniswellaheadofitspeersandis
rankedthirdoutof69urbandistrictsinGermany.26
Theoutlookfor2015suggeststheoptimisticsentimenton
Berlin’slabourmarketwillcontinue.AccordingtoUnterne-
hmensverbände Berlin-Brandenburg [Business Associa-
tionsofBerlinandBrandenburg](UVB)Berlinisexpected
toaddatleast25,000newjobsin2015.Thisisundepinned
bysolidgrowthinthenumberofstart-ups.27Furthermore,
Berlinhasmanagedtomaintainitsstrongpositioninthe
international labourmarket.A surveyonglobalmobility
conductedjointlybyTheBostonConsultingGroupandStep-
StoneconcludedthatGermanyisanattractivedestination
andthemostpopularnon-English-speakingcountry.More
than200,000workers from189countriesparticipated in
thesurvey,whichwascarriedoutbetweenAprilandJune
2014. Both Germany and Berlin are popular destinations
for foreign jobseekers due to the stable economic envi-
ronmentandattractivelivingconditions.Berlinisamong
the10mostsought-afterdestinationsforworkerslooking
for jobs abroad – next to London, New York and Paris.28
ThispositionamongGermanandinternationalcitiesisan
advantageforallrealestatesegments.
23 Konjunkturreport[EconomicReport]2015:DiekonjunkturelleLageinderRegionBerlin-Brandenburgzumjahresbeginn2015[TheeconomicsituationintheBerlin-Brandenburgregionatthestartof2015],p.5
24 IBB(2015):IBBHousingMarketReport2014,p.5.25 AmtfürStatistikBerlin-Brandenburg[Berlin-BrandenburgStatisticsOffice]
26 IWKöln[CologneInstituteforEconomicResearch]/Wirtschaftswoche/Immobilienscout24(2014):CityRanking2014
27 BerlinerWirtschaft(04/2015):DasMagazinderIndustrie-undHandelskammerzuBerlin[MagazineoftheChamberofIndustryandCommerceinBerlin],p.55
28 BCG/StepStone(10/2014):Pressreleaseonthestudy“Decodingglobaltalent”
Berlin:Europeancitywiththebestinvestmentprospectsintherealestatemarket
EconomicenvironmentinBerlin| 11
Some26yearsafter thefallof theBerlinwall, theecon-
omy in the country’s East is stronger than ever before.
In a city ranking published by the Cologne Institute for
Economic Research (IW Cologne) in cooperation with Im-
mobilienscout 24 and Wirtschaftswoche, Leipzig, Berlin
and Erfurt are among the 10 most dynamic locations in
Germany. While cities in the eastern states often rank
behind the cities in the south, they are among the top
10 cities inGermany in the city rankingpublishedevery
yearbytheCologneInstituteforEconomicResearch.Many
easternGerman locationssuchasPotsdam,Dresdenand
Jena make it into the upper half of the table of 69 ana-
lysedurbandistrictsinGermanywithmorethan100,000
inhabitants.Achievinganaveragescoreof52.7,themajor
citiesineasternstateshadthehighestdynamicsofallGer-
manregions.Theaveragescoreofallsurveyedcitieswas
50points.Therankingisbasedonindicatorsfromthela-
bourmarket,economicstructure,residentialpropertymar-
ketandqualityoflife.29
Potsdam – steady immigration and low unemployment
TheappealofPotsdamasanattractiveplaceto liveand
workisreflectedinthesteadygrowthinpopulationsince
2006. As at the end of the first half of 2014, Potsdam
addedaround2,400 inhabitants. In2013, thenumberof
inhabitants increased by 2,000 compared to 2012.30 This
rise is mainly due to migration, but also natural popula-
tiongrowth.Onereasonfortheinfluxisthebroadrange
of training, study and jobs available in the state capital.
The employment trends index, which has shown solid
growth since 2006, can be seen as an indicator of this
development.Thenumberofemployeesliabletopayso-
cialsecuritycontributions isgrowingfaster thanthepop-
ulation.31 Potsdam’s 6.7% unemployment rate was the
lowest recorded in June 2015 compared with the large
urbandistricts andBerlin.32 The lowunemployment rate
isareflectionoftheriseinbusinessregistrations,among
otherfactors.AccordingtotheCityRankingspublishedby
IW,netbusinessregistrationsroseby2.9per1,000inhab-
itants,whiletheaverageforall69citiesdroppedby0.4,
puttingPotsdaminfirstplace.33
Rostock – a business centre with high quality of life
In2014,theHanseaticcitywasabletoconsolidateitspo-
sitionasamajor centre for IT, servicesandwindenergy.
The economic dynamism of Rostock is reflected in busi-
nessesflocking to the city. Forexample, comdirectbank
opened a new testing and development centre, the car
hire company Sixt expanded its service centre here and
EnBW AG completed a new facility for its offshore wind
farm.34Moreover,Rostockportfacilitieshandled3million
tonnes of additional goods in 2014, an increase of 13%
compared to the previous year.35 The city’s economic
PROPERTY MARKET IN EASTERN GERMANY:
FASTEST GROWING CITIES NATIONWIDE
Rostock
29 IWKölnConsult/Wirtschaftswoche/Immobilienscout24(2014):Cityranking2014–MajorGermancitiescompared
30 AmtfürStatistikBerlin-Brandenburg[Berlin-BrandenburgStatisticsOffice],StateCapitalofPotsdam(2014):RegionalerWachstumskernLandeshauptstadtPotsdam,Statusbericht[StateCapitalofPotsdam–aregionalgrowthcore,statusreport]October2014
31 StateCapitalofPotsdam(2014):RegionalerWachstumskernLandeshauptstadtPotsdam,Statusbericht[StateCapitalofPotsdam–aregionalgrowthcore,statusreport]October2014
32 BundesagenturfürArbeit[FederalEmploymentAgency](2015):Datarequeston1.7.201533 IWKölnConsult/Wirtschaftswoche/Immobilienscout24(2014):Cityranking2014–Major
Germancitiescompared34 http://www,rostock-business,com/de/rostock-news/artikel/grosse-marken-solides-wachs-
tum-und-erstklassige-veranstaltungen.html,accessedon5.5.201535 RostockBusiness(2015):Newsletter01/2015ofGesellschaftfürWirtschafts-undTechnolo-
gieförderungRostockmbH
12 |EconomicenvironmentineasternGermany
success is reflected in its gross domestic product and
unemployment rate. Between 2008 and 2012, Rostock’s
GDProseby11.2%–wellabovethe8.1%averageascal-
culated by the Cologne Institute for Economic Research
as part of City Ranking 2014, which analysed 69 urban
districts in Germany.36 Within four years, the unemploy-
ment ratedropped from12.5% in June2011 to9.6% in
June2015.37Inadditiontoeconomicfactors,theHanseatic
Cityalsoboastshighqualityoflife.AccordingtoDekaBank,
the high proportion of green space and low crime rates
areamajorfactorinRostockbeingranked14thintermsof
qualityoflifeamongthe39analysedGermancitieswith
atleast200,000inhabitants.38
Dresden – growth in population and overnight stays The
StateCapitalofSaxonyislovedbyitsinhabitants.Inana-
tionwidecomparisonofqualityoflifein27majorGerman
cities,theinhabitantsofDresdenarethemostsatisfied.39
Dresden’s appeal is mainly due to the supply of attrac-
tive jobs. Inadditiontohigh-techandservicecompanies,
the city is home to numerous medium-sized companies,
research institutes and a microelectronics cluster.40 As a
result,thenumberofemployeessubjecttosocialsecurity
contributions grew by more than 13% between 2008
and2014.Youngpeople,inparticular,benefitedfromthis
developmentwithyouthunemployment fallingby6per-
centagepointsbetween2008and2013,morethaninany
otherGermancity.41
WithitslocationontheRiverElbe,andnumerouscultural
facilitiessuchastheSemperOperaHouseandtheDresden
Zwingerpalace,thestatecapitaloffershighqualityoflife
withabundantleisureandrecreationalopportunities.The
relatively high level of overall life satisfaction of the in-
habitantsofDresdenhasbeenthemaindriverbehindthe
ever-growingpopulation.In2014,thecityregistered5,500
newinhabitantscomparedto2013,whichalsoresultedin
a higher growth rate. This increase is due largely to the
inmigrationofyoungpeople,for instance,attendingone
of Dresden’s 11 higher-education institutes.42 Lastly, the
appealofDresdenisalsoclearlyreflectedinthegrowing
touristnumbers:Bytheendof2014thenumberofover-
nightstaysrosetoabout4.5million,representinga7.6%
risecomparedtothepreviousyear.43
36 IWKölnConsult/Wirtschaftswoche/Immobilienscout24(2014):Cityranking2014–MajorGermancitiescompared
37 BundesagenturfürArbeit[FederalEmploymentAgency](2015):Datarequeston1.7.201538 DekaBank(2014):DekaBankStädteranking[DekaBankCityRanking]2014,p.2339 StateCapitalofDresden(2014)at:http://www,dresden.de/de/02/06/09/Lebensgualitaet.
php,accessedon13.5.2015
40 Richert&OertelImmobilien:MarktberichtDresden[MarketReportDresden]2014/201541 IWKölnConsult/Wirtschaftswoche/Immobilienscout24(2014):Cityranking2014–Major
Germancitiescompared42 StateCapitalofDresden(2015):Pressreleasedated21.1.2015“DresdensBevölkerung
wächstweiter”[Dresden’spopulationcontinuestogrow]43 Focus(2015):“DresdenlegtbeiÜbernachtungszahlenzu”[Dresdenseesgrowthinover-
nightstays]of2.3.2015
Dresden
EconomicenvironmentineasternGermany| 13
Leipzig – Germany’s fastest-growing city Leipzig as a
majorbusinesscentreisbecomingincreasinglyattractive
asaplacetoworkandlive.Thishasbeenreiteratedbythe
latest city rankingpublishedby theCologne Institute for
EconomicResearchbasedonpopulationgrowthand the
numberofemployeesliabletopaysocialsecuritycontribu-
tions.Between2011and2013,thenumberofinhabitants
in Leipzig increasedby5.7%due tohighnet inwardmi-
gration,makingitGermany’sfastestgrowingcity.Accord-
ingtotheanalysisof69majorGermancitieswithdistrict
status carried out by the Cologne Institute for Economic
Research, theaveragepopulationgrowthover the same
period was 1.8%.44 According to census data,45 Leipzig
overtookevenDresdenbetween2013and2014andisnow
thelargestcityinSaxonywithcloseto536,000inhabitants.
PopulationgrowthinLeipzigisaccompaniedbygrowthin
economicoutput–withGDPgrowingby17.2%between
2008and2012,thecityrankedsixthinthecomparisonof
69majorGermancities. Thegrowingeconomicpower is
alsoreflectedinrisingemployment.Here,thecityknown
foritstradefairsranksfirstineconomicdynamismamong
the 69 cities – between 2008 and 2014, the number of
employeesincreasedby19.5%.46Despitedecliningsharp-
ly, theunemployment rate inLeipzig remainswith9.4%
(asatJune2015)slightlyabovetheeasternGermanaver-
ageof8.8%.47
Magdeburg – steady economic growth and productiv-
ity gains With over 230,000 inhabitants, the state capi-
tal is thepoliticalandeconomiccentreofSaxony-Anhalt.
According to analyses carried out by DekaBank and the
Cologne Institute for EconomicResearch, this cityon the
ElbeRiverscoreshighly,inparticularduetoitseconomic
stabilityandproductivitygrowth.Between2008and2012,
gross domestic product per employed person increased
by 9.4%, placing Magdeburg 11th among the 69 major
GermancitiesanalysedinthecityrankingoftheCologne
InstituteforEconomicResearch.48
According to DekaBank, Magdeburg offers second-best
value behind Berlin based on the relation between the
rateandvolatilityofeconomicgrowthbetween2003and
2012.Asaresult,economicgrowthinMagdeburgisdistrib-
utedveryevenly.49Theengineeringindustry,inparticular,
which can lookbackon150yearsof tradition inMagde-
burg,contributestothestrongdynamismofthecity50with
around60companiesandsome11,000employees.Thisis
alsoreflectedinthefallinyouthunemployment.Between
2008 and 2013, Magdeburg’s youth unemployment rate
fell by3.2percentagepoints.According to the2014 city
rankingspublishedbytheCologne InstituteforEconomic
Research, this puts the city in fifth place among the 69
majorGermancities.51
Leipzig
44 IWKölnConsult/Wirtschaftswoche/Immobilienscout24(2014):Cityranking2014–MajorGermancitiescompared
45 StatistischesLandesamtSachsen[StatisticalOfficeoftheFreeStateofSaxony],populationgrowthestimatesbasedoncensusdataof9.5.2011
46 IWKölnConsult/Wirtschaftswoche/Immobilienscout24(2014):Cityranking2014–MajorGermancitiescompared
47 BundesagenturfürArbeit[FederalEmploymentAgency](2015):Datarequeston1.7.2015
48 IWKölnConsult/Wirtschaftswoche/Immobilienscout24(2014):Städteranking2014–DeutscheGroßstädteimVergleich
49 DekaBank(2014):DekaBankStädteranking2014,S.1250 GesellschaftfürWirtschaftsserviceMagdeburgmbH:BrancheninformationMaschinenbau
undhttp://www.magdeburg.de/Start/Wirtschaft-Arbeit/Wirtschaftsstandort/Schwerpunktbranchen/index.php?NavID=37.808.1&La=1,Abrufam6.5.2015
51 IWKölnConsult/Wirtschaftswoche/Immobilienscout24(2014):Städteranking2014–DeutscheGroßstädteimVergleich
14 |EconomicenvironmentineasternGermany
Erfurt – among the top 10 most dynamic cities in Germany
BesidesBerlinandLeipzig, theStateCapitalof Thuringia
hasrecordedparticularlystronggrowthineasternGerma-
ny.Inthecityrankingfor2014carriedoutbytheCologne
InstituteforEconomicResearch,Erfurtranksninthinterms
ofeconomicdynamismamongthe69Germancitieswith
districtstatus,whichisamajorimprovementoverthe30th
placeitheldlastyear.Duetothepositiveeconomictrend,
thenumberofoverindebtedadultsandrecipientsofunem-
ploymentbenefitdeclinedsharplybetween2008and2013,
securingErfurtatopspotinthesecategories.52Erfurt’seco-
nomic success is based on a broad range of sectors, in-
cludingtheengineering,photovoltaic,logisticsandmicro
technologyindustries,whicharenowfirmlyestablishedas
Erfurt’sareasofexpertise.53UsablespaceinErfurt’sindus-
trialzones,suchasthefreightvillageandtheinternational
logisticscentre,isquicklybecomingscarce.54Erfurt’secon-
omy,includingthetourismindustry,willreceiveafurther
boost from the expansion of its main railway station to
becomeanICE(highspeedinter-city)junction,whichwill
cuttraveltimestoBerlin,Munich,FrankfurtandDresden.55
Thismeansthatprospectsforfurthereconomicgrowthare
encouraging–between2010and2012,Erfurt’sgrossdo-
mesticproductgrewby4.3%(Germany:+4.2%).56
Jena – a research centre with excellent future prospects
The Thuringian university town is known for its optical
products companies Carl Zeiss and Jenoptik. Many re-
search institutions, such as the Max Planck Society for
the Advancement of Science or the Leibniz Association
and other high-tech companies, take advantage of the
clusterof scienceand researchexpertise in the city. The
two universities now boast some 24,000 students57 and
some 4,500 scientists conducting research in the city.58
In the ranking of 69 major German cities carried out by
theCologneInstituteforEconomicResearch,Jenaisranked
amongthetop10Germanresearchcentres,nexttocities
likeBerlin,Munich,StuttgartandDresden.59However,Jena
is farmore than justacentre foreducation, scienceand
research. The city is home to international organisations
aswellas smallandmedium-sizedenterprises,notonly
fromtheresearchsector,butalsoincontemporarycrafts
and catering.According to thePrognos FutureMap, Jena
hasexcellentprospectsforthefuture,withthecityranking
26thamong402Germancities,whileevenachieving6th
place with regard to demographics.60 According to popu-
lation forecastspreparedbyAnalyse&Konzepte, Jena is
expectedtocontinuetogrowuntilatleast2030.Compared
to2013,thenumberofinhabitantsisexpectedtoincrease
by3.6%toaround109,000asa resultofahighnatural
growthrateandnetinwardmigration,especiallyfromthe
newfederalstatesandabroad.61
Erfurt
52 IWKölnConsult/Wirtschaftswoche/Immobilienscout24(2014):Cityranking2014–MajorGermancitiescompared
53 StadtverwaltungErfurt[ErfurtCityCouncil]-Wirtschaftsatlas[economicmap]2011,p.10ff54 ThüringerAllgemeinefrom21.1.2015:“ErfurtbegibtsichaufdieSuchenachneuenGewer-
begebieten”[Erfurtonasearchfornewindustriallocations]55 http://www.ice-knoten.de/ueberblick/,Abrufam7.5.2015
56 NationalaccountsoftheLänder57 WirtschaftsförderungsgesellschaftJenambH:Jena–factsandfigures,March201558 WirtschaftsförderungsgesellschaftJenambH:LocationprofileJena59 IWKölnConsult/Wirtschaftswoche/Immobilienscout24(2014):Cityranking2014–Major
Germancitiescompared60 http://www.prognos.com/publikationen/zukunftsatlas-regionen/–accessedon7.5.201561 Jena:2014populationforecast–summaryreport
EconomicenvironmentineasternGermany| 15
wachsenwird. ImVergleichzu2013solldieZahlderEin-
wohnerum3,6Prozentaufetwa109.000zunehmen,durch
einenpositivenGeburtensaldoundZuzuginsbesondereaus
denneuenBundesländernunddemAusland.
DEMOGRAPHICS AND ECONOMY IN BERLIN
AND MAJOR EASTERN GERMAN CITIES
City
Population
(30.06.2014)
Population growth
in absolute terms
(1. Hj. 2013/1. Hj. 2014)
GDP per
employed person
in EUR (2012)
Change in GDP
per employed person
in % (2010/2012)
Berlin 3,440,991 46,861 59,944 2.2
Potsdam 162,425 2,374 49,131 2.9
Rostock 203,421 893 56,761 2.6
Dresden 531,982 6,053 48,919 -1.9
Leipzig 535,732 12,013 50,155 8.5
Magdeburg 230,815 1,057 49,537 3.7
Erfurt 205,276 1,520 44,162 4.3
Jena 107,422 797 54,525 10.4
Germany 80,925,000 339,300 64,084 4.2
BB
MV
SNST
TH
Source:Populationfigures–statisticalofficesoftheGermanstates,databasedon2011censusGDPperemployedperson–statisticalofficesoftheLänder:NationalaccountsoftheLänder
16 |Demographicandeconomicindicators
Unemploymentfigures2011–2015inpercent(basedonthecivilianworkforce)
Source:BundesagenturfürArbeit/FederalEmploymentAgency(2015)
6.9
Magdeburg
Berlin
Rostock
Leipzig
Erfurt
Dresden
Potsdam
Jena
June20116,0
10,5
15
June2015June2014June2013June2012
10.710.59.69.4
7.87.6
6.7
13.313.112.5
11.5
9.99.6
7.5
6.8
In the city ranking published by DekaBank in Decem-
ber 2014, Berlin and Leipzig come out best in terms
of economic stability among the 39 analysed German
cities. Overall, both cities rank middle of the pack.
Besides Berlin and Leipzig, Magdeburg also recorded
consistently high levels of economic growth.
What are the main characteristics of the economic
structure of Berlin and Leipzig, and how would you
explain the particularly stable economic growth here,
including in Magdeburg?
Dr. Kater:BerlinandLeipzighavedifferenteconomicpri-
orities.Whileclassicmanufacturingnowplaysonlyaminor
roleintheeconomyofthecapital,theimportanceofthe
creative industries, biotechnology, information and com-
munication technologieshasbeengrowingprogressively.
Theyarealsostrongly intertwinedwith localuniversities,
scienceandresearch.Oneofthelargestscienceandtech-
nologyclustersinGermanyislocatedinAdlershof.
The aim of DekaBank’s ranking of German cities with a population
of 200,000 inhabitants or more is to rate major German cities
according to their attractiveness as property locations.
The overall ranking of cities is the result of scoring individual
criteria, including prosperity, labour market, quality of life,
accessibility, economic stability, demographics and education.
In addition, DekaBank regularly publishes research on the
individual federal states, which analyses the macroeconomic
environment, the situation in the capital markets and
the commercial property markets, and highlights
investment opportunities.
WITHDR.ULRICHKATER
“Polarisation between the most
desirable cities and areas with
declining population”
Interview:DekaBank“Polarisationbetweenthemostdesirablecitiesandareaswithdecliningpopulation”| 17
INTERVIEW
Leading export-oriented automotive companies have
settledinLeipzigwithavarietyofdownstreamsuppliers,
andthestructureoftheservicesectorhereisequallydiver-
sified.InMagdeburg,thankstoitsstatusasastatecapital,
there isastrongconcentrationofpublicandotherservic-
es,whichprobablycontributedtothestabilityofeconomic
growth.
Together with Munich, Dresden recorded the high-
est population growth among major German cities
between 2002 and 2012. Leipzig also performed well
in this respect.
What are the reasons for the significant growth in
population in the two Saxon cities? After all, Dresden
and Leipzig only achieve medium rankings in terms of
prosperity, life quality and education.
Dr. Kater: Dresden and Leipzig are among the most
desirablecities,benefitingfromhighinwardmigrationof
peopleinthe20to35agegroup.Theyappreciatethewell-
established universities and numerous other higher edu-
cation facilities as well as the job opportunities in high-
techindustries,whichhaveastrongpresenceespeciallyin
Dresden(“SiliconSaxony”).Inaddition,bothcitiesoffera
broadrangeofculturalattractionsandlargelyintacthous-
ingmarketswithoutanysignsofoverheating.Qualityof
life is a very subjective factor, which can be difficult to
quantify,andthiscriterionshouldthereforenotbeoverrat-
edinthecityranking.
Against the background of encouraging rankings for
the eastern German cities and Berlin in the individual
categories, what developments do you see with re-
gard to the office, retail and hotel property markets?
Given the already high price levels in the “big 7”, will
it make more sense to invest in B-rated locations such
as Dresden and Magdeburg in future?
Dr. Kater: Berlinhastobelookedatseparately,because
itbelongstothe“big7”leagueinGermany,andishighly
soughtafterbybothdomesticandinternationalinvestors.
Theofficemarket, inparticular,hasdevelopedveryposi-
tivelyafteroverheatinginthe1990s;vacancyratesareat
theirlowestlevelin20years.Theretailmarketisbenefit-
ingfromthediversityofprimelocations;theverydynamic
developmentaroundHackescherMarkt isacase inpoint
here.Asalocation,thecapitalexperiencedaboomwhich
has lostmomentumsomewhat, but is still supportedby
the large increases in overnight stays.Dresdenand Leip-
zig,asB-ratedcities,arecertainlyworthwhilealternatives,
eveniftheyweren’tabletoescapethepressureonyields.
While the retail andhotelmarkets have performedwell,
theofficesegmentissomewhatlaggingbehind.Giventhe
smallsizeofthemarket,Magdeburgisunlikelytobenefit
muchfromthistrend.
Where do you see the eastern German cities in 10
years in terms of economic and demographic growth?
Is growth concentrated in individual cities such as
Dresden and Leipzig or do the positive effects extend
to surrounding districts and smaller cities?
Dr. Kater: It is true that,overa10-yearperiod,Dresden
and Leipzig, as well as some of the smaller cities like
Erfurt and Jena, are expected to outperform other cities
likeCottbus,GeraandSchwerin,whichsufferfromongoing
outwardmigrationandstructuraleconomicweaknesses.
18 |Interview:DekaBank“Polarisationbetweenthemostdesirablecitiesandareaswithdecliningpopulation”
Polarisationbetweenthemostdesirablecitiesandareas
with declining population is likely to become more pro-
nouncedovertime.SimilartotheareasurroundingBerlin,
thedistrictsadjacenttoDresdenandLeipzigbenefitfrom
theeconomicstrengthofthecorecities,withdistricts in
theimmediatevicinitysettobenefitthemost.
This spring, the German Federal Government adjusted
its real GDP growth forecast for 2015 from 1.5 % to
1.8 % – mainly due to extraordinary factors, such as
the low price of oil, rising consumer confidence and
the weak euro.
Will this be advantageous for some property markets
(e.g. retail) or will all the property markets benefit
from the upswing in equal measure?
Dr. Kater: A stable labour market, rising wages, low
inflationandextremelylowinterestratescontinuetosup-
portprivateconsumption.Whiletheretailsector is likely
to benefit more, particular attention should be given to
thegrowthinonlineretailing,whichwillleadtostructural
changesonthehighstreetwithimplicationsfortheretail
propertymarket.Foodretailpropertiesplayaspecialrole
in thiscontext,as the impactofonline retailing remains
limited.
Ontheotherhand,thelogisticspropertymarketbenefits
from the boom in online retailing. We also believe that
thehotelpropertymarkethasgoodprospectsforgrowth,
becausecitybreaks–unlikebusinesstravel-stillofferplen-
tyofupsidepotential.Growthintheofficepropertymarket
hasbeenmoresluggish,astheeconomicrecoveryhasso
farnotbeenreflectedinasignificantincreaseindemand.
DekaBank–Companyprofile
DekaBank provides asset management and capital mar-
ketsolutionsforGermansavingsbanks.Togetherwithits
subsidiaries,itformstheDekagroup.Withtotalassetsof
aroundEUR220billion(asat31.12.2014)andaround4mil-
lionmanagedportfolios,itisoneofthelargestinvestment
serviceprovidersinGermany.Itoffersawiderangeofin-
vestmentproductsandservicestoprivateandinstitutional
investors.TheDekaGroup’sglobalrealestateexpertiseis
pooledintothePropertyBusinessDivision.
www.dekabank.de
Professionalbackground
Dr. Ulrich Kater has been Chief Economist at DekaBank
since2004,andChairmanof theEconomicandFinancial
CommitteeoftheAssociationofPublicBanks(VÖB)since
2006.Dr.Katerwasresponsibleformonetarypolicyand
capitalmarketsattheGermanCouncilofEconomicExperts
from1995to1999,andsince1999hasbeeninvolvedin
theestablishmentoftheEconomicResearchDepartment
atDekaBank.
Interview:DekaBank“Polarisationbetweenthemostdesirablecitiesandareaswithdecliningpopulation”| 19
TRANSACTION MARKET IN BERLIN:
INVESTMENT VOLUME SURGES TO RECORD LEVELS
Berlin attracts ever-stronger capital in-flows – compared
withthepreviousyear,Berlin’sproperty investmentmar-
ketgrewbyaround19%in2014andreachedatransaction
volumeofnearlyEUR4.28billion.Thisexceedsthe10-year
averageby27%andisthebestresultsince2007,theyear
beforetheglobaleconomicandfinancialcrisisculminated,
whenEUR6.88billionwereinvestedinBerlin’smarket.
Withregardto investedcapital, thecontinuinggrowthin
2013–2014 was primarily attributable to investment in
hotel properties and the category “other properties”,
whichmainly includes undeveloped land andmixed-use
properties.Theboominthecapital’stourismindustrywas
alsoreflectedinthetransactionvolume–theinvestment
inBerlin’shotelsgrewby75%comparedto2013.Onthe
otherhand,projectdevelopersrelyonBerlin’scontinuing
economic and demgraphic growth and are increasingly
interestedinundevelopedland.62
Office properties still with lion’s share
of investment turnover
Although hotel properties, undeveloped land and mixed-
usepropertiesincreasedtheirshareofBerlin’stransaction
volumesignificantly,thebiggestslicewasonceagaincom-
mandedbyofficeproperties,accountingforaround40%
of total investment volume in 2014. Rising demand and
limited supply increased competition among investors,
particularlyinthecorearea.63Thenetinitialyieldforoffice
properties incentral locations fellaccordingly from5.3%
to4.6%between2010and2014,andtherateofreturnfor
office properties in Berlin’s peripheral locations declined
from7.5%to6.8%.64Whilein2014,investmentinoffice
propertiesinBerlinincreasedby6.1%yearonyear,invest-
mentinretailpropertiesfellsharplybymorethan30%.65
This ismainlyduetothefactthat longtermbuyerswant
toholdontopropertiespurchasedinrecentyears66,thus
creatingasupplyconstraintinthemarket.
62 BNPParibasRealEstate(2015):InvestmentMarketGermany–PropertyReport201563BNPParibasRealEstate(2015):InvestmentMarketGermany–PropertyReport201564Bulwiengesa,2015
65BNPParibasRealEstate66CBRE(2015):InvestmentmarktBerlin[InvestmentmarketBerlin],Q42014
Year Office Retail Logistics/
Light industrial
Hotels Other Total
2010 1,487 1,376 71 72 167 3,173
2011 794 940 59 147 396 2,335
2012 1,881 1,153 83 432 300 3,848
2013 1,621 1,297 166 200 305 3,589
2014 1,720 888 187 351 1,131 4,276
InvestmentturnoverbytypeofuseinBerlininmillionEUR
Source:BNPParibasRealEstate
20 |TransactionmarketinBerlin
Even distribution of invested capital
Notaone-offphenomenon–thehighinvestmentvolume
in2014wasmuch lessattributable to large transactions
inthehundredsofmillionsofeurothanisthecaseinoth-
ercities.InBerlin,investedcapitalisdistributedrelatively
evenlybetweenvariouscategories,withthehighestshare
ofturnover(28%)beingattributabletotheEUR50to100
millioncategory.DealsworthmorethanEUR100million
cameinsecond(around24%).Thislowdependenceonbig
transactionsischaracteristicofBerlinandcanbeviewedas
amarketstrength.67Nevertheless,themarketsawseveral
key transactions in2014both in CityWest andCity East.
The “Upper West” project, which is currently being con-
structednearBerlin’sGedächtniskirche[MemorialChurch],
was sold to theassetmanagerRFRHolding for EUR250
millioninoneofthelargesttransactionsinBerlinin2014.
InCityEast, thesaleof“HackeschesQuartier” [shopping
and entertainment centre] for over EUR 150 million was
oneofthemostimportanttransactionsoftheyear.68Both
properties exemplify the importance of mixed-use prop-
ertiessoldinBerlinin2014.Thesesitesblendcommercial,
officeandhoteluse.
Based on a stable labour market and low interest rates
in the longer term,the internationalconsultingfirmBNP
ParibasRealEstateanticipatestransactionvolumefor2015
toagainbeveryhigh,farabovethelong-termaverage.69
Witha transactionvolumeofaroundEUR1.3billion,Ber-
lin’s commercial property market recorded its best-ever
firstquarter.Itevenexceededthe2007boomyearresult
by6%.70
Service industry metropolis Berlin:
Commercial land prices higher
TheservicessectorisBerlin’spowerengineandanimpor-
tant source of value creation. Last year, real gross value
addedinBerlin’sservicessectorgrewby2%,whichwas
abovethefederalaverageof1.4%.Landpricesreflectthe
strong demand for building land for service sector com-
mercialspaceinthecapital.Whilelandpricesforindustrial
centresandproduction-relatedbusinessesremainedlarge-
lyflatbetween2013and2014,toppricesforservicesector
spacerosebyathirdfromEUR750to1,000/sqm.Atthe
otherendofthescale,lowestpricespaidforservicesector
buildinglandremainedlargelyunchangedatEUR220/sqm
comparedto2012and2013levels.
67BNPParibasRealEstate(2015):InvestmentMarketGermany–PropertyReport201568Transactionlistfrombulwiengesa,2015
69BNPParibasRealEstate(2015):InvestmentMarketGermany–PropertyReport201570 BNPParibasRealEstate(2015):Ataglance–investmentmarketinBerlinQ12015
CommerciallandpricesinBerlin
Sources:compiledfromtheBerlinLandMarketReport2014/15;IVDcommercialpricereport2014/2015;DIPmarketandfacts2015;AengeveltCityReport2015;RDMpricemonitor2014;ownresearch
Evolution of land prices in EUR/sqm
ærisinglandpricesâflatlandpricesèfallinglandprices
City Industrial sites
Space
for production-related businesses
Commercial space
for service-related businesses
Berlin 30–90 120–180 220–1,000
Trend â â æ
TransactionmarketinBerlin| 21
Fromthe investorperspective, theappealof commercial
real estate markets outside the top German cities is in-
creasing. According to a survey of 250 investors carried
outbytheaccountancyandconsultingfirmPwC,thefocus
is now shifting towards B-rated cities, which is mainly
duetothestrongcompetitionamonginvestorsforoffice
andretailspaceinthemajorGermancities.Incontrastto
bigcities,regionalplayers–includingDresden,Erfurtand
Magdeburg–havelowertransactionvolumesandhigher
risks but also deliver the highest rent yields, according
tothePwCsurvey.71AlookattheeasternGermanstates
(excluding Berlin) shows the growing interest in smaller
markets. Investmentturnoverdoubledhere in2014com-
paredto2013fromEUR1.36to2.7billion.72In2014,Ber-
lin’s commercial land market recorded 477 transactions
withturnoverofEUR2,606millionandatake-upvolumeof
268ha.Comparedtothepreviousyear,turnoverincreased
by 15%, with Leipzig and Rostock seeing the largest
increase in turnoverbymorethan25%.Withaturnover
of EUR 371 and EUR 243 respectively, the two markets
rankedsecondandthirdamongtheeasternGermancities.
Magdeburgrecordedthelowestturnoverin2014withEUR
8 million, representing a sharp decline compared to the
previousyear.
Transaction market in Leipzig:
More transactions and higher investment
volume across all market segments
Leipzig remains one of the most dynamic cities in Ger-
many thanks to its above-average GDP and population
growth, and is increasingly sought after by investors.73
AccordingtoBNPParibasRealEstate,investmentvolume
inthiscityfamousforitstradefairsdoubledin2014com-
paredto2013.Lastyear,EUR516millionwasinvestedin
commercialrealestateinLeipzig,thebulkofwhichwent
into retail (36.6%)andofficeproperties(26.9%).74Aside
fromthesurgeindealsandthedominanceofsmalland
medium-sizedinvestmentsunderEUR25million,thehigh
investmentvolumein2014wasalsoduetosomelarger
transactions. This includes the sale of the Petersbogen
arcadeaswellas theacquisitionof theForumamBrühl
by TLG IMMOBILIEN AG in the third quarter of 2014. The
saleof thePetersbogenarcade in2014helpedtheretail
segmenttoclaimthe2014topspot intermsof turnover
share–onlytoovertakenagainbyofficepropertiesinthe
firstquarterof2015.75Growing investor interest inoffice
propertiesinLeipzigisreflectedinfurtherdeclinesinthe
netinitialyield.Theyieldforofficesinprimelocationsfell
from5.5%to5.3%betweenthethirdquarterof2014and
thefirstquarterof2015.76
TRANSACTION MARKET IN EASTERN GERMANY:
INVESTMENT TURNOVER DOUBLES
71 PwC(2015):RealestateinvestorsurveyGermany72 Savills(2015):AnalysisforTLGIMMOBILIENAG73 Aengevelt(2015):Pressreleasedated17.4.2015,Leipzig–DeutlicherUmsatzanstieg[Leipzig–
sharpincreaseinsales]
74 BNPParibasRealEstate(2015)75 BNPParibasRealEstate(2015):Ataglance–investmentmarketLeipzigQ32014andQ1201576 BNPParibasRealEstate(2015):Ataglance–investmentmarketLeipzigQ32014andQ12015
City Commercial zone Trend
Potsdam 30–220 æ
Rostock 20–60 æ
Dresden 25–125 â
Leipzig 15–90 æ
Magdeburg 20–55 â
Erfurt 18–40 è
Jena 60–190 â
BB
MV
SNST
TH
Sources:compiledfromlocallandmarketreports;IVD-Gewerbe-Preisspiegel[IVDcommercialpricereport]2014/2015;PlötzImmobilienführer[PlötzReal]DIPMarktundFakten[Marketandfacts]2015;Aengeveltcityreport2015;ownresearch
Land prices in EUR/sqm
ærisinglandpricesâflatlandpricesèfallinglandprices
Landpricesforcommercialspace
22 |TransactionmarketeasternGermany
74 BNPParibasRealEstate(2015)75 BNPParibasRealEstate(2015):Ataglance–investmentmarketLeipzigQ32014andQ1201576 BNPParibasRealEstate(2015):Ataglance–investmentmarketLeipzigQ32014andQ12015
77 Aengevelt(2015):PressReleasedated07.05.2015,Magdeburg–BestesErgebnisseit2007[Bestresultssince2007]78 Transactionlistfrombulwiengesa,201579 Aengevelt(2015):Pressreleasedated21.4.2015,Dresden–highgrowthcomparedto201380 Transactionlistfrombulwiengesa,201581 Aengevelt(2015):Pressreleasedated21.4.2015,Dresden–highgrowthcomparedto2013
Source:localcommitteesforlandpricevaluationChange in turnover
ægrowingbyupto15%ãgrowingbyupto25%ããgrowingbymorethan25%
âflat
èfallingbyupto15%äfallingbyupto25%ääfallingbymorethan25%
City Number of transactions Take-up volume Turnover Change in turnover
Berlin 477 268ha EUR2,606million æ
Potsdam 80 40ha EUR235million ã
Rostock 390 67ha EUR243million ãã
Dresden 118 71ha EUR238million æ
Leipzig 284 142ha EUR371million ãã
Magdeburg 308 277ha EUR8million ää
Erfurt 65 23ha EUR67million ää
Jena 25 10ha EUR38million ä
BB
MV
SNST
TH
Increasing transaction volume in Dresden and
Magdeburg
Bothstatecapitalsrecordedgrowingtransactionvolumes
between2013and2014.Theincreaseincommercialinvest-
mentvolumewasmostnoticeableinMagdeburg.Compared
to2013,transactionvolumesincreasedby81%toEUR156
millionin2014andexceededtheaveragelevelsofthelast
decadebyaboutonethird(avg.2004–2013:aroundEUR116
millionperyear).Theincreaseinturnoverwasparticularly
evident intheofficeandcommercialbuildingsegments.
AccordingtoAengevelt,MagdeburgrecordedaEUR119
millionriseinthissegment,upby143%comparedto2013.77
AmongthekeytransactionsinMagdeburgwas,forexample,
theacquisitionofUlrichshausbyaninstitutionalfundfrom
F&CREIT–anofficeandcommercialbuildinglocatedcen-
trallybetweenthemaintrainstationandtheRiverElbe.78
At justunder9%,growthinturnoveronthecommercial
investmentmarketinDresdenwasmoremoderate–trans-
actionvolumereachedEUR336million,whichisinlinewith
theaverageforthelastdecade(avg.2004–2013:EUR337
millionperyear).79Inaddition,theElbemetropolisrecorded
oneofthebiggestdealsacrossalltheeasternGermancities
in2014:ThePragueCarréprojectonPragerStrassewassold
forEUR70million.80Theincreasingshortageofcoreproper-
tiesinDresdenisreflectedinfallinginitialyieldswhichare,
nevertheless,stillhigherthantheaverage.Marketyields
forcommercialbuildingsinprimelocationscurrentlyrange
between6%and7.5%–inthepreviousyeartheyranged
between6.5%and8.5%.InitialyieldsforofficesinDresden
rangebetween6.6%and7.5%–atthestartof2014the
lowerthresholdwas7%.81
Commerciallandmarket2014
TransactionmarketineasternGermany| 23
BERLIN’S OFFICE MARKET CONTINUES TO GROW-
AND RENTS FOLLOW SUIT
Berlin’seconomyhasbeenboomingforyears.In2014,real
GDP in the capitalgrewby2.2%compared to theprevi-
ous year, which is significantly higher than the German
average(+1.6%).82Onthisbasis,Berlinwasrankedamong
thetopstates,justoneplacebehindBadenWürttemberg
(+2.4%).83 The service sector, which is the powerhouse
of Berlin’s economy, outperformed Germany as a whole.
Last year, the realgross valueadded inBerlin’s services
sector roseby2%,0.6percentagepointsabove the fed-
eralaverageof1.4%.84Thecapitalalsorecordedthemost
businessstart-upsinGermany.With121businessstart-ups
per 10,000 inhabitants, Berlin was clearly ahead of sec-
ond-placedHamburg(101start-upsper10,000inhabitants)
aswellasGermanyasawhole(73start-upsper10,000
inhabitants).85WhileunemploymentinBerlinremainshigh-
er than the German average (10.5% compared to 6.2%
forGermanyasawhole,asatJune2015)86,employment
hasbeenrisingatasteadypacesince2003.In2014,the
labourforcegrewby1.8%,whichis0.9percentagepoints
higherthanthefederalaveragegrowthrateof0.9%.87The
servicesectoristhemajordriverofBerlin’seconomyand
thelocallabourmarket.In2014,around88%ofthosein
employment worked in the service sector. Compared to
theprevious year, overall employment increasedby2%.
Retail,tourismandthehospitalityindustry,aswellasthe
ITandcommunicationssectors,recordedthefastestgrowth
of3%respectively.88TheBerlinofficemarketisbenefiting
fromthepositiveeconomicdevelopmentsinthecapital.
Berlin claims the top spot among the five largest
office market locations in Germany
In2014,Berlin’sofficemarkethadapproximately18.7mil-
lionsquaremetresofofficespaceonoffer89,andreached
a take-up volume of 609,000 square metres, which rep-
resents an increase of just under 34% compared to the
previousyear.90TheseresultsplaceBerlinfirstamongthe
fivelargestofficemarketlocationsinGermany.Thelargest
share of take-up volume is attributable to city locations,
which include, among others, office market locations in
Charlottenburg, Schöneberg and Wilmersdorf, as well as
themainrailwaystation,CheckpointCharlie/Spittelmarkt
and at Hackescher Markt.91 This positive development is
mainly due to the dynamism of financial services sector,
industry/construction,researchandbiotechnology,aswell
astechnology,mediaandtelecommunications.92
The positive economic developments, particularly in the
service sector, in recent years is reflected in the increas-
ing number of office workers in Berlin. In 2014, there
wereabout695,400officeworkersinthecapital,placing
Berlin in top position among major German cities. This
isdue to thesharp riseof2.7% in thenumberofoffice
workerswhencomparedtothepreviousyear.Amongthe
majoreasternGermancities,onlyLeipzigrecordedahigh-
ergrowthrateoverthesameperiod,with3.9%.93
82 FederalStatisticalOffice83 Arbeitskreis“VolkswirtschaftlicheGesamtrechnungenderLänder”[WorkingGrouponNational
AccountsoftheGermanLänder]:Informationpriortorevisionofnationalaccountsin201484 FederalStatisticalOffice85 FederalStatisticalOffice86 FederalEmploymentAgency(BundesagenturfürArbeit)87 AmtfürStatistikBerlin-Brandenburg[Berlin-BrandenburgStatisticsOffice]88 AmtfürStatistikBerlin-Brandenburg[Berlin-BrandenburgStatisticsOffice]
89 bulwiengesa(purchaseddata)90 BNPParibasRE,“BüromarktDeutschland[officemarketGermany],PropertyReport2015”91 BNPParibasRE,“BüromarktDeutschland[officemarketGermany],PropertyReport2015”92 CBRE,“VermietungsumsatzindenfünfgroßenBüromärktenfünfProzentüberVorjahr”[Take-up
volumeinthefivemajorofficemarketsgrowsfivepercentyearonyeardated8.1.201593 bulwiengesa(purchaseddata)
24 |OfficepropertymarketinBerlin
Drop in supply of available space
The average office vacancy rate in Berlin fell over three
yearsby2percentagepoints,andin2014itstoodat5%.94
DespitefallingvacancyratesinBerlin,in2014thevolume
of new construction remained at a relatively low level
compared todemand.Whilespaceunderconstruction in-
creasedby6%yearonyearto286,000squaremetres,the
availablesupplyofspacedecreasedby11%duetomarked
fallsinvacancyrates.95
Average rents increase, prime rents stable
AccordingtoSavills,highdemandwasreflectedinaverage
rentsforofficespaceinBerlin,whichincreasedby7.3%in
2014compared to2013. In theprimesegment,however,
therentsremainedlargelyflat(+2.3%).96Accordingtofore-
castsbyBNPParibasRealEstate,primerentsareexpected
to increase in 2015, which ismainly due to the positive
outlookfortheBerlineconomy,thegrowingdemandand
thelowvolumeofavailablespace.97
Rents for office space in Berlin in prime office locations
remainedstableandrangedbetweenEUR20and23/sqm.
The largest price increases were recorded in the prime
locations of Potsdamer Platz and Leipziger Platz, where
rents increasedby5%yearonyeartoEUR23/sqm,and
prime locations in City West and City East, where rents
increased by 12% to EUR 22 and 21.50/sqm. The area
surrounding the main railway station was among the
mostexpensivelocationsinthecapitalwithrentsofEUR
20.50/sqm.98 Due to stable or rising rents, investors con-
tinuetoviewofficepropertiesinBerlinasveryattractive
–initialyieldsincentrallocationsfellfrom4.8%in2013to
4.6%in2014.99
In city centre locations, rents were relatively high and
rangedbetweenEUR12and22/sqm.Rentsvarydepend-
ingonthebuildquality.Priceincreaseswereparticularly
dramaticinthissegment.Asaresult,rentsinHackescher
Markt and Charlottenburg recorded double-digit growth
andreachedEUR19.50and14.50/sqm,respectively.100At
the same time, rent levels in city fringe and peripheral
locations remained stable at EUR 7.50–13/sqm and EUR
6–12/sqm, respectively. As the demand for office space
in Berlin now also extends to B-rated locations, falling
yieldshavealsobeenrecordedinperipheralofficemarket
locations–havingfallento7.1%in2013,theinitialyield
decreasedfurtherin2014to6.8%.101
94 bulwiengesa(purchasedata)95 BNPParibasRE,“BüromarktDeutschland[officemarketGermany],PropertyReport2015”96 SavillsResearch97 BNPParibasRE,“BüromarktDeutschland[officemarketGermany],PropertyReport2015”98 BNPParibasRE,“BüromarktDeutschland[officemarketGermany],PropertyReport2015”99 bulwiengesa(purchaseddata)
100BNPParibasRE,“BüromarktDeutschland[officemarketGermany],PropertyReport2015”101bulwiengesa(purchasedata)
Locations Berlin
Prime office locations 20.00–23.00
City centre locations 12.00–22.00
City fringe locations 7.50–13.00
Peripheral locations 6.00–12.00
RentrangesforofficespaceinBerlin
Sources:compiledfromIVDcommercialpricereport2014/2015;PlötzRealEstateGuide2015;DIPMarketandFacts2015;BNPParibasRealEstatePropertyReport2012/2015;CBRichardEllisBerlinOfficeMarket2014;SavillsOfficeMarketReport2014;JonesLangLaSalleRetailandOfficeProfiles2014;Engel&Volkers2014–15;Colliers2014/15;AengeveltCityReport2015;guidelinespublishedbyIHKBerlin2014;ownresearch.
OfficepropertymarketinBerlin| 25
OFFICE PROPERTY MARKET IN EASTERN GERMANY:
GROWTH IN WHITE-COLLAR EMPLOYMENT
REFLECTED IN DECREASING VACANCY RATES
The office property markets in eastern Germany have
comea longwaysince the1990s,whichwerecharacter-
isedbyanenormousoversupplythatledtovacancyrates
of20–25%.Thesupplysurplushasdeclinedsignificantly
overthepasttenyears.Thepropertymarkets ineastern
Germany have benefited from the favourable conditions
andgrowthintheGermaneconomy.Theunemployment
ratefellagainsignificantlyinallsevenmajorcitiesunder
review.ThesteepestfallswererecordedinRostock,where
the unemployment rate fell by 0.9 percentage points to
9.6%inJune2015.Asaresult,unemploymentisnowun-
der10% in sixof the seven citiesunder review.Magde-
burgistheexceptionwitharateof10.7%,butevenhere
thenumber of unemployedwasdroppedmarkedly over
thepastyearby0.7percentagepoints.Withtheexception
ofPotsdam,whitecollaremployment rose in theeastern
Germancities,withLeipzigand Jenashowing thestrong-
est growth rates, at close to 4% and 2.6% respectively.
EmploymenthasalsoincreasedintheDresdenandRostock
officemarkets,whichgrewby1.6%and1.2%respectively.
Vacancy rates fall in six of the seven major eastern
German cities
As the construction of new offices does not quite keep
up with growth in the number of employees, vacancy
ratescontinuedto fall lastyear insixof thesevencities.
Leipzig was able to reduce the vacancy rate by 2.3 per-
centagepointsto13.5%asaresultofitshighgrowthin
employment. This is the second-highest office vacancy
ratebycomparison(behindErfurtwith15.8%).Theover-
all trend is still positive.At 4.9%,Potsdam recorded the
lowest supply surplus is in, benefiting as it does from
its proximity to Berlin and its status as a state capital.
NextcameRostock,withanofficevacancy rateof7.6%.
WhileRostockisnotastatecapitalanddoesnothavethe
sameneedswithregardtoofficespace,itisstillthemost
importanteconomiccentreinMecklenburg-Vorpommern.
Office vacancy rates in Magdeburg and Dresden were
under the 10-percent mark with 9.4% and 9.6% respec-
tively,whileJenastillhasroomforimprovementat10.6%.
However, thisThuringianuniversitycity isalso thesmall-
esteasternGermanofficemarketwithofficespacebelow
490,000squaremetres.
ThemaineasternGermanyofficelocationsarestillDresden
andLeipzigwithroughly110,000white-collarworkersand
around2.7millionsquaremetresofofficespace.Whilethe
demand for office space in Dresden as a state capital is
basedonpublicservices,administration,universitiesand
researchinstitutes,thedemandinLeipzigisdrivenbythe
categories “other services”, “consulting firms” and “man-
agementofindustrialcompanies”.102
Stable rents across the board, sharp rises in Potsdam
Despitethepositivedynamicsintheemploymentmarket,
the property markets in easternGerman citieswere not
affected as positively. In Dresden and Magdeburg, rent
levelsacrossallofficesegmentsremainedflatcompared
to the previous year. In Dresden, rents for offices with
good utility value remained stable at EUR 8.50–12/sqm,
while in Magdeburg they fell to EUR 7.50 to 10.50/sqm.
Incontrast, toprents inLeipzig forofficeswithgoodutil-
ity value increased by around 4% compared with 2013.
AttractivespacecancommandrentsofbetweenEUR8.50
and12.50/sqm,puttingLeipzig in2ndplacebehindPots-
dam.Rostockcommandsverysimilar rents,which range
betweenEUR8.50and12/sqm.TheErfurtmarket forof-
fice space recorded a significant increase in rents for of-
102BNPParibasRealEstate:OfficemarketLeipzig,Q12015
26 |OfficepropertymarketineasternGermany
ficeswithfairtoaverageutilityvalue.Theseincreasedby
25% from EUR 6 to 7.50/sqm. In Erfurt, administration/
managementandtheservicesectorareamongthemost
important employers, the evolution of which will have
a significant impact on developments in the local office
propertymarketsgoingforward.
The most significant changes were once again reported
inPotsdamwhere,despitetheslightriseinexcesssupply,
rentsforofficeswithfairtoaverageutilityvalueaswellas
thosewithgoodutilityvaluewereontherise.Whiletop
rentsforofficeswithfairtoaverageutilityvalueincreased
byaround6%uptoEUR9.50/sqm,rentsforofficeswith
goodutilityvaluerosebyasmuchas12.5%.In2014,these
properties were rented out for EUR 9.50 to 13.50/sqm.
The Brandenburg state capital is therefore bucking the
new trend of declining office employment. Traditionally,
public administration and TMT (technology, media and
telecommunications)sectorcompaniesarewellrepresent-
ed in Potsdam. As several major projects are due to be
completedinPotsdaminthecomingyears–e.g.thecon-
structionofthenewInvestitionsbankdesLandesBranden-
burg[InvestmentBankoftheLandofBrandenburg]build-
ing, this is likely to have a positive impact on the local
economy.
Dresden:Margonhaus
OfficepropertymarketineasternGermany| 27
No. of
office workers
(2014)
Office workers
Change in %
(2013/2014)
Vacancy rate
in %
(2014)
Vacancy rate
Change in %
(2011/2014)
Total office
space in sqm
(2014)
Total office space
Change in %
(2011/2014)
Berlin 695,427 2.7 5.0 -2.0 18,736,911 1.5
Potsdam 40,078 -1.1 4.9 0.5 1,321,305 1.1
Rostock 38,888 1.2 7.6 -0.6 992,702 1.7
Dresden 110,962 1.6 9.6 -1.0 2,683,958 -0.3
Leipzig 110,034 3.9 13.5 -5.2 2,742,347 -1.1
Magdeburg 45,910 0.4 9.4 -1.5 1,428,830 0.5
Erfurt 52,176 0.7 15.8 -1.4 1,617,575 1.3
Jena 24,747 2.6 10.6 -0.9 488,408 4.0
KEY OFFICE MARKET INDICATORS
BB
MV
SNST
TH
Source:bulwiengesa,2015(reviseddataforofficeworkersin2013)
28 |Keyofficemarketindicators
RENT RANGES FOR OFFICE SPACE
IN EASTERN GERMANY
City Fair to average
utility value
Trend Good utility value2 Trend
Potsdam 5.00–9.50 æ 9.50–13.50 æ
Rostock 6.00–8.50 â 8.50–12.00 â
Dresden 4.50–9.00 â 8.50–12.00 â
Leipzig 5.00–8.50 â 8.50–12.50 æ
Magdeburg 4.00–7.50 â 7.50–10.50 â
Erfurt 4.50–7.50 æ 8.00–10.50 æ
Jena 5.00–8.00 â 8.50–11.00 â
BB
MV
SNST
TH
Themostimportantfactorsincalculatinglocalofficeandretailcommercialrentsarelocationcriteriafollowedbypropertysizeandtype/qualityoffacilities.Pricerangesarealsoprovidedinordertotakeintoaccountvariationsincomparisoncriteria.
Sources:compiledfromlocallandmarketreports;localIHKpricereports;IVDcommercialpricereport2014/2015;PlötzRealEstateGuide2015;DIPMarketsandfactsandcityreports2015;BNPParibasrealestatepropertyreport2015;AengeveltCityreports2015;Engel&Völkers2014/15;ownresearch
1Spaceonfringeofcentralbusinessdistrictswithcontemporaryfacilities,notsuitableforrepre-sentativepurposes
²Spaceincitycentresandprimelocations,mostlyinnewlybuiltpropertieswithstate-of-the-artfacilities
Rents in EUR/sqm
ærisingrentsâflatrentsèfallingrents
OfficepropertymarketineasternGermany|29
RETAIL PROPERTY MARKET IN BERLIN:
RISING PRIME RENTS AND HIGH APPEAL
TO INTERNATIONAL RETAILERS
Berlin’sevolution intooneof theworld’smostdesirable
cities – for tourists, students, migrants, businesses and
realestate investors–continued in2014.Thepopulation
increasedagainbymorethan40,000, thehotelandhos-
pitality industry achieved new records in the number of
overnight stays, and the number of students in the
2014/2015 winter semester grew by 3.2% compared to
thefirst semesterof thepreviousyear.103 Thenumberof
unemployeddroppedagain–theunemploymentratefell
betweenJune2014andJune2015from11%to10.5%.104
DuetotheimprovedemploymentsituationinBerlin,retail
spending per capita rose by 3.4% in 2014 to EUR 5,493.
Thanks to these factors, Berlin’s retail sector with its
numerous well-frequented shopping locations increased
itssalesby1.3%.105
Higher rents in prime locations and central
business districts
These positive developments were clearly noticeable on
Berlin’s market for retail properties. Retail rents in prime
locations once again recorded the fastest growth in 2014.
Whilein2013rentsforlargerprimespacesover150square
metresrosefromEUR180to250/sqmyearonyear,in2014,
they climbed up to EUR 300/sqm. In central business dis-
tricts outside Berlin’s prime locations of Kurfürstendamm,
FriedrichstrasseandHackescherMarkt,toprentsincreased
by4%fromEUR120to125/sqm.Atthesametime,retail
rentsforsmallerspacesupto100squaremetresinBerlin
alsoshowedsignificantgrowth.InBerlin’scentralbusiness
districts,primerents insomecasesreachedEUR180/sqm
in 2014 – representing a year-on-year increase of 12.5%.
Inkeyprimelocations,rentsforsmallerspacesroseby3.3%
andreacheduptoEUR310persquaremetreofretailspace.
Berlin attracts international retailers
and luxury brands
The rise in retail rents – particularly in the city’s prime
locationswithhigh footfall – ismainlydue to theendur-
ingappealofBerlinforretailers.AccordingtoJonesLang
LaSalle (JLL), Berlin andMunich are among the10most
attractive retail locations in Europe. While London tops
the rankings and is widely considered the best “spring-
board”forexpansionintoEuropethankstoitsmarketsize,
high market transparency and retailer-friendly attitude,
Berlinisalsoconsideredtobeanimportantgatewaycity
inthisregard.106Inparticular,thisappliestointernational
luxurybrandssuchasDolce&Gabbana,LouisVuittonand
Prada,whichbesidesFriedrichstrassearealsoattractedto
Kurfürstendamm. According to JLL, Kurfürstendamm has
beengaininginimportanceoverthepastfiveto10years
andisconstantlyevolving.Berlinhasnowclosedthegap
itpreviouslyhadwithDüsseldorf,Frankfurt,Hamburgand
Munichwithregardtoluxuryhighstreetshopping.Ofthe
20luxurybrandswiththehighestconcentrationofshops
in Europe, 15 are now present in Berlin. The reason for
thisdevelopmentisthatinternationalbrandschoosetheir
locationsbasednotonlyonspendingpower,butalsoon
thenumberoftourists,sophisticatedcommercialstructures,
as well as a successful blend of tradition and suitable
architecture. In particular, the city’s appeal for tourists
has had a positive effect on the expansion decisions of
internationalretailers,andthisisoneofBerlin’sstrengths.
In2014,thecapitalrecordedcloseto28.7millionovernight
stays, representing almost 7% of all overnight stays in
Germany and thus securing the pole position for Berlin
among German cities. By comparison, in 1992, Berlin’s
sharewasjust2.5%.107
103AmtfürStatistikBerlin-Brandenburg(2015)[Berlin-BrandenburgStatisticsOffice]:pressreleases104BundesagenturfürArbeit[FederalEmploymentAgency],July2015105GfKGeoMarketing,2015and2014
106JLL(2014):Pressreleaseof27.11.2014,MünchenundBerlinzählenzudenzehnattraktivstenHandels-standortenEuropas[MunichandBerlinamongthe10mostattractiveretaillocationsinEurope]
107JLL(2015):Pressreleaseof10.3.2015,BerlinerKu’dammlocktinternationaleLuxuslabels[Berlin’sKurfürstendammattractsinternationalluxurylabels]
30 |RetailpropertymarketinBerlin
KEY RETAIL MARKET INDICATORS
Retail spending
in EUR
per inhabitant
(2014)
Change in retail
spending in EUR
per inhabitant in %
(2011/2014)
Retail turnover
in EUR
per inhabitant in %
(2014)
Change in retail
turnover in EUR
per inhabitant in %
(2011/2014)
Retail centrality
(2014)
Berlin 5,493 8.8 5,182 2.1 105.2
Potsdam 5,672 6.7 3,951 1.3 77.0
Rostock 5,194 5.9 4,698 0.6 101.5
Dresden 5,372 6.2 5,212 1.1 108.9
Leipzig 5,161 8.3 4,728 0.1 104.4
Magdeburg 5,150 4.6 5,513 -1.0 119.8
Erfurt 5,233 3.0 5,466 2.4 116.2
Jena 5,268 4.0 5,191 -1.1 110.0
BB
MV
SNST
TH
Source:GfKGeoMarketing,2015
Keyretailmarketindicators| 31
RETAIL SPACE RENT
RANGES IN BERLIN
Rentsforretailspaceuptoapprox.100sqm
Sources:compiledfromIVDcommercialpropertypricereport2014/2013;Brockhoffrentindex2015;PlötzRealEstateGuide,2015;DIPMarketandFacts,2015;BNPParibasRealEstatePropertyRetailReport2015;guidelinespublishedbyIHKBerlin2014;ownresearch.CBRE2014;Aengeveltcityreport2015;ownresearch
Rents in EUR/sqm for retail space
ærisingrentsâflatrentsèfallingrents
Sub-centre Central business district Prime locations
Berlin East 10–40 40–140 140–230
Trend æ æ â
Berlin West 15–40 40–150 170–310
Trend æ è æ
Prime 75 180 330
Sources:compiledfromIVDcommercialpropertypricereport2014/2015;guidelinespublishedbyIHKBerlin2014;Brockhoffrentindex2015;JonesLangLaSalle2014;ownresearch
Rents in EUR/sqm for retail space
ærisingrentsâflatrentsèfallingrents
Sub-centre Central business district Prime locations
Berlin 7–25 20–125 140–300
Trend â æ æ
Rentsforretailspacefrom150sqm
32 |RetailpropertymarketinBerlin
TheretailsectorintheeasternGermancitieswasableto
benefit from the positive market conditions in Germany.
Theboomincitytourismledtoariseintouristnumbers
acrossallsevencities,withDresdenseeingovernightstays
increase by 7.6% year on year, followed by Magdeburg
with6.3%andRostockwith4.4%respectively.108Whatis
more, thecitiesalso reportedgrowth in theirnumberof
inhabitants–especiallyLeipzigwithan increaseof2.3%
–andasatJune2015,thenumberofunemployedhadfall-
enyearonyearinallsevenmajoreasternGermancities.
As a result, retailers were able to benefit from rising
incomesinadditiontotourism-relatedconsumption.Retail
sector sales are also affected by growth in online retail-
ing.However, food retailing remainsvirtuallyunaffected
bythisas itsshareofonlineretailing isonlyaround1%
of total sales.According to forecastsby theGfK, it isnot
expectedtopassthe5%markwithinthenext10years.109
While retail spending power remains below theGerman
average in most growth regions of eastern Germany,
theannualpercapitaspendingpoweroftheirinhabitants
hasnowreachedoverEUR5,150.AtEUR5,672perhead,
PotsdamhasnowsurpassedtheGermanaverageofEUR
5,657 for the first time. With product range restrictions
for shops in Potsdam’s “Bahnhofspassagen” shopping
arcade being relaxed last year, the Gesellschaft für Kon-
sumforschung (GfK) [Society for Consumer Research]
anticipatesthatsaleswillrisemarkedlyinPotsdamin2015,
handinhandwithincreasedretailcentrality.110Fifteennew
shops opened there on 4,500square metres of hitherto
vacant retail space and now complement the range of
productsonoffer.111
Stable rents for small spaces, rent growth for large
spaces in Potsdam, Leipzig and Dresden
Thetrendinretailrentsacrossthesevenanalysedeastern
Germancitieswaslargelystabletorising.Asbefore,the
highest rentsarepaid for city centre locations in Leipzig,
Dresden and Erfurt. Noticeable is the lack of momen-
tumwithregardtosmallerretailspacesupto100square
metresdespitethefavourableconditions.Inthissegment,
rentshaveonly increased insub-centre locations inDres-
den and Rostock, and in the central business district of
Erfurt.ToprentsreachedEUR120/sqminDresden,EUR140/
sqminLeipzigandremainedunchangedatEUR150/sqm
inErfurt.Itshouldbetakenintoaccount,however,thatthe
rentrangesintraditionalfoodretailspacesarelower.
Retail rents for larger spaces above 150square metres
evolvedmoredynamically.Toprentscouldbeincreasedby
around14%uptoEUR40/sqminPotsdam’scentralbusi-
nessdistrict.Insomeisolatedcases,rentsevenclimbedto
EUR55/sqm.Onlyayearago,toprentsrangedbetween
EUR35and50/sqm.However,therangeofrentscharged
for sub-centre locations in Potsdam has fallen from EUR
6–12/sqmin2013toEUR6–10.50/sqmin2014.Theoutlook
forthecentralshoppinglocationsinPotsdamremainsposi-
tiveforthecurrentyear.112
ThehighestrentsforlargeretailspacesarepaidinLeipzig,
withtoprentsreachingEUR85/sqm.Lastyear,theyrose
onceagainbyaround6%.Thehighestrentsarecharged
in central locations e.g. Petersstraße and Grimmaischen
Straßewhicharesettobenefitfromtheopeningofthecity
tunnelandthecompletionofseveralprojects,suchasthe
“Handelshof”andthenewuniversitybuildingatAugustus-
platz.113Takingintoaccountthe3%year-on-yearriseinthe
per capita retail spending power of Leipzig’s inhabitants,
108StatistischeLandesämter109GfKPrognose2025Online-AnteilamGesamtumsatz110GfKGeoMarketing111Comfort:ComfortStädteReportPotsdam,2014
112Comfort:ComfortStädteReportPotsdam,2014113BNPParibasRealEstate:FrequenzreportLeipzig,Q22014UNDAengeveltResearch,
Pressemitteilungvom17.4.2015
RETAIL PROPERTY MARKET IN EASTERN GERMANY:
RISING PURCHASING POWER AND GROWTH
IN TOURISM
RetailpropertymarketineasternGermany| 33
114Aengeveltresearch,pressreleasedated17.4.2015115Comfort:ComfortCityReportDresden,2014116Comfort:ComfortCityReportRostock,2014
thegrowingappealoftheSaxoncapitalfordomesticand
foreign tourists and the various projects currently under
development114,itcanbeassumedthatthehighdemand
forretailspaceandthepositiveoutlookfortheretailprop-
ertymarketinLeipzigwillcontinue.
InDresden,rentsofuptoEUR65/sqminexpensivecentral
businessdistrictlocationsremainedcomparablystablein
2014.Thecomparisonofsevenmajorcitieshas revealed
that rents for large retail spaces in sub-centre locations
in Dresden increased by more than 40%. While in 2013
therentrangespanwasEUR11/sqm,ayear later ithad
climbed to EUR16/sqm.As rents in the central business
districtremainedlargelyflat,thisisanindicationthatthe
retailers’focusinDresdenhasshiftedtowardssub-centre
locations. However, projects such as “Prager Carée” and
“Jüdenhof”,whichputtheDresdencitycentreonthemap
asanattractiveshoppingdestinationfordomesticandin-
ternationalretailers,rentsinthecentralshoppinglocations
ofDresdenarelikelytoriseinthemediumterm.115Other
positivefactorsincludethecity’srisingappealfortourists
and its pull effect with regard to the surrounding areas.
This is because, with Dresden’s good retail centrality of
around109,storesandshopsinDresdenhaveagreatpull
powerforsurroundingcommunities.
Rents for smaller retail spaces in the Hanseatic City of
Rostockarealsostableorontherise.Interestingly,rents
havemainlybeenrisinginsub-centrelocations.Toprents
forlargerareasover150squaremetresreachedEUR11.50/
sqm, representinga4.5% increase compared to thepre-
vious year. Rents for smaller spaces of up to 100square
metres in sub-centre locationshave increasedbyaround
one-thirdfromamaximumofEUR30to40/sqm.Thismay
beattributable,amongotherfactors,totheexpansionof
theOstseeParkinRostock-SievershagenandtheWarnow
ParkintheLüttenKleindistrict,whicharelocatedinakey
locationonthecityfringeofRostock.116
34 |RetailpropertymarketineasternGermany
RENT RANGES FOR RETAIL SPACE
IN EASTERN GERMANY
Rentsforsmallerretailspaces–uptoapprox.100sqm
Rentsforlargerretailspaces–fromapprox.150sqm
Themostimportantfactorsincalculatinglocalofficeandretailcommercialrentsarelocationcriteria,followedbypropertysizeandthetype/qualityoffacilities.Pricerangeisalsoprovidedinordertotakeintoaccountvariationsincomparisoncriteria.
Sources:compiledfromlocalpropertymarketreports,localchamberofcommercepricereports;IVDcommercialpricereport2014/2015;Plötzrealestateguide2015;Brockhoffrentindex2015.DIPMarketsandFactsandDIPCityReports2015;BNPParibasRealEstatePropertyReport2014;AengeveltCityReports2015;JonesLangLaSalle2014;Engel&VölkersRetailOpportunities2014;CBRE2014;Cushmann&Wakefield2014;ownresearch.
1 Spaceinagoodlocationwithinclosedresidentialquartersorindistrictcentres2Areainacentralinner-citylocationwithhighfootfallandabroadrangeofsectors
Rents in EUR/sqm
ærisingrentsâflatrentsèfallingrents
City Sub-centre1 Trend Central business district2 Trend Top prices
Potsdam 9.00–15.00 â 18.00–80.00 â 80
Rostock 10.00–40.00 æ 40.00–80.00 æ 90
Dresden 10.00–40.00 æ 50.00–110.00 â 120
Leipzig 15.00–40.00 â 45.00–130.00 â 140
Magdeburg 7.00–20.00 â 15.00–55.00 â 60
Erfurt 5.00–12.00 â 35.00–120.00 æ 150
Jena 8.00–12.00 â 25.00–60.00 â 60
City Sub-centre1 Trend Central business district2 Trend Top prices
Potsdam 6.00–10.50 è 10.00–40.00 æ 55
Rostock 8.00–11.50 â 11.00–50.00 â 60
Dresden 7.00–16.00 æ 40.00–65.00 â 70
Leipzig 8.00–16.00 è 40.00–85.00 â 110
Magdeburg 4.50–6.50 â 11.00–20.00 â 25
Erfurt 5.00–8.00 è 40.00–60.00 è 100
Jena 6.00–10.00 â 15.00–35.00 æ 38
BB
MV
SNST
THB
BM
VSN
STTH
RetailpropertymarketineasternGermany| 35
BERLIN: DESPITE COMPETITIVE PRESSURES
HIGHER ROOM REVENUES AND OCCUPANCY
Berlin is Germany’s top travel destination, registering
another record in thenumberofovernightstays in2014.
Over this period, some 12 million tourists checked into
Berlin’shotels,translatinginto28.7millionovernightstays.
Thismeansthat inBerlin, thenumberofovernightstays
hasmore thandoubledsince2004– comparedwith the
previous year this figure increasedby6.5%.117According
toaccountingandconsultingfirmPwC,overnightstaysin
Berlinareforecasttoexceedthe30millionmarkby2016.118
ThismeansthatBerlinhasagoodchancetomovecloserto
Parisintherankings.Measuredbythevolumeofovernight
stays,Pariscameinsecondwith36millionovernightstays
in2014,whileLondonclaimedthetopspotwith53million
overnightstays.119
Berlin’s tourism has a broad, diversified base
Berlin’smaincharacteristicandadvantageasatourist
destinationisitsmoreorlessequalappealtobusinessand
leisuretravellers.Businesstraveldemandismainlybased
on Berlin’s growing economy, trade shows as well as it
being the home of various political institutions and
researchfacilities.Demandintheleisuresegmentisbased
on Berlin’s historical significance as well as the numer-
ous cultural events and sights.120 According to a survey
conducted by the German National Tourist Board (GNTB)
in 2014, which asked 11,000 visitors to Germany about
theirfavouritesights inthecapital, thetop10highlights
included the Brandenburg Gate (4th place), the Berlin
Wall/East Side Gallery (5th place), and the World Her-
itageMuseum Island (10thplace).Berlin also claims the
top spot among conference and congress destinations:
117VisitBerlin(2015):Berlinintherankings–theGermancapitalinnationalandinternationalcomparison,AmtfürStatistikBerlin-Brandenburg[Berlin-BrandenburgStatisticsOffice]
118PwC(2015):Roomforgrowth–Europeancitieshotelforecastfor2015and2016for20gatewaycitiesfromAmsterdamtoZurich,p.32
119Tagesspiegelof19.02.2015:“RekordzahleninderHauptstadt–TouristenliebenBerlin”[Thecapitalattractsarecordnumberoftourists] 120ColliersInternational(2014):HotelmarktBerlin[HotelpropertymarketinBerlin]2014/2015
Berlin:RamadaHotel
36 |HotelpropertymarketinBerlin
In2014,11millionparticipantsvisitedsome131,000events
(+4%)intheGermancapital,representinganincreaseof
3%yearonyear.Theconferenceandconventionmarket
generated7millionovernightstaysforthefirsttime,rep-
resentinga4.5%increasecomparedto2013.121
Rise in key hotel market indicators
underlines positive business outlook
BecauseofBerlin’senduringappealtobothbusinessand
leisure travellers, it tends to have higher and more sta-
ble occupancy rates than, for example, Frankfurt, which
is mainly frequented by business travellers, who pre-
dominantly occupy hotel rooms on weekdays.122 Average
occupancy rates in Berlin’s hotels reached a record lev-
elof74.2% in2014,which translated intoa7thplace in
thecomparisonof20hotel locationsinEurope(1stplace:
London,83%occupancy).Compared to thepreviousyear,
room occupancy in Berlin rose by 1.5 percentage points
in2014.Despiteincreasingcompetition–accordingtothe
tourism data provider STR Globa, Berlin added a total of
1,700 new hotel rooms in 2014 – room revenues and av-
eragedaily rates inBerlinhave inpart increased sharply
in areas with high demand. While revenue per available
room(RevPAR)climbedinBerlinbetween2013and2014
by approximately 4.2% to EUR 66.35, the average daily
rate (ADR) over the same period reached EUR 89 (+2%).
While room rates across other German top destinations
increased(withtheexceptionofCologneatEUR88)with
MunichatthetopendofthescaleatEUR110,insomecases
rateshaveactuallyfallen.AveragedailyratesinFrankfurt
amMainfellby2.6%andinCologneby1%,butremained
largelyflatinMunich.AtEUR89,averagedailyratesinBer-
linareEUR2abovetheADRforGermanyasawhole.123
Largest market for hotel investments – 2,800 rooms
under construction or in planning124
Berlin is the largest market for hotel investments in
Germany,withavarietyofnew,trendyhotelprojectssuch
as thenewMoxyhotelsby theMarriottGroupand IKEA.
Duetostableorveryhighvisitornumbersandovernight
stays, as well as the long-anticipated BER Airport which
isnowdue toopen in2017,Berlin isaparticularly inter-
estinginvestmentdestinationforhotelchains.125TheStei-
genbergerandMoxyhotelchainsplantoopennewhotels
nearthenewairportin2015.126However,newhotelsare
alsobeingbuiltinBerlin’sCityEastandWestcentralloca-
tions.ARiuHotelandaHiltonHotelwithacapacityof350
roomswillopenclosetoWittenbergPlatzandAlexander-
platz in2015and2018respectively.127Byfar thebiggest
hotelproject inBerlin is theMotelOneUpperWestnear
theGedächtniskirche[MemorialChurch]withacapacityof
around580roomson18floors.Itisexpectedtoopenits
doorsin2016.128
121VisitBerlin(2015):Berlinintherankings–theGermancapitalinnationalandinternationalcomparison,AmtfürStatistikBerlin-Brandenburg[Berlin-BrandenburgStatisticsOffice]
122Haufe(2015):BerlinerHotelsverzeichnenBesucherrekorde[HotelsinBerlinwelcomerecordnumberofvisitors]from3.3.2015,availableat:http://www,häufe,de/immobilien/entwicklung-vermarktung/marktanalysen/pwc-berliner-hotels-verzeichnen-besucher-rekorde_84324_295310.html,accessedon5.6.2015
123ColliersInternational(2014):HotelmarktBerlin[HotelmarketinBerlin]2014/2015,PwC(2015):Roomforgrowth–Europeancitieshotelforecastfor2015and2016for20gatewaycitiesfromAmsterdamtoZurich,STRGlobal2015
124PwC(2015):Roomforgrowth–Europeancitieshotelforecastfor2015and2016for20gatewaycitiesfromAmsterdamtoZürich,S.32
125ColliersInternational(2014):HotelmarktBerlin[HotelpropertymarketinBerlin]2014/2015126http://www,ahgz,de/neueroeffnungen/moxy-soll-im-fruehjahr-2015-in-deutschland-starten,
200012210155.html,accessedon5.6.2015;http://www,steigenbergerhotelgroup.com/documents/10516/15303/Region+Berlin,pdf,accessedon5.6.2015
127http://www.riu.com/de/Paises/deutschland/berlin/hotel-riu-plaza-berlin/,accessedon5.6.2015,http://www.haufe.de/immobilien/entwicklung-vermarktung/in-berlin-entsteht-weltweit-groessteshampton-by-hilton_262_295336.html/andhttp://www.superior-hotel.net/home/groesstes-hampton-by-hilton-soll-in-berlin-entstehen/,accessedon5.6.2015147CBRE:HotelmarktDeutschland[HotelpropertymarketGermany]MarketView2013,figurerelatingtoFrankfurtonp.4,figurerelatingtoDüsseldorfonp.3.
128http://www.upper-west.de/andhttp://press.visitberlin.de/de/pressemeldung/neues-aus-der-city-west,accessedon5.6.2015,booking.comandhotelreservierung.de
HotelpropertymarketinBerlin|37
HOTEL MARKET IN EASTERN GERMANY:
DRESDEN, LEIPZIG AND ROSTOCK SETTING THE PACE
TheGermanhotelpropertymarketisstilloneofthemost
attractivemarketsinEurope,contributingtotheappealof
theeasternGermanmarketsasawhole.Amongthetop
10citieswiththemosthotelprojectdevelopmentsisLeip-
zig,withalmost1,000newroomsandDresdenwith400,
which puts them in the 7th and 9th place respectively –
betweenDüsseldorfandCologne.129Nextyear,166rooms
will be opened at the Adina Apartment Hotel in Leipzig
and around100 rooms at the AmediaHotel Jüdenhof in
Dresden.130
DresdenandLeipzigareincreasinglyevolvingintotourist
magnets,andin2014theyrecordedthehighestnumberof
overnightstaysofalltheeasternGermancities(excluding
Berlin)withacombinedtotalof7.2million.LastyearDres-
den, in particular, attracted significantly higher numbers
ofvisitorsthanin2013.Overnightstaysincreasedby7.6%,
whichwasthesharpestriserecordedinanymajoreastern
Germancity,includingBerlin.
Dresden, Leipzig and Rostock profitable,
Magdeburg’s growing appeal
All other eastern German cities analysed here saw the
number of overnight stays increase last year. Somewhat
surprisingly,Magdeburgrankssecondwithariseof6.3%
comparedto2013.Rostockrecorded1.9millionovernight
stays,representinganincreaseof4.4%.Thegrowingtour-
istappealofMagdeburgisalsoreflectedintheevolution
ofkeyhotelmarketindicators:Hotelsinthestatecapitalof
Saxony-Anhaltwereabletoincreasetheiraveragerevenue
peravailableroom(RevPAR)by10%lastyear.AtEUR29.45
perroom,pricesareatthebottomofthescalecompared
withothereasternGermancities.Asinthepreviousyear,
hotelsinRostockandLeipzigrecordedthehighestrevenue
withEUR63.78andEUR52.25respectively.Itistherefore
hardlysurprisingthathotels inthesetwocitiesachieved
thehighestroomoccupancyratesandaveragedailyrates
close to 69% and EUR 92.91 (Rostock) and EUR 75.82
(Leipzig)respectively.Havingincreaseditsoccupancyrate
substantially to just under 67% in 2014, Dresden com-
mandedthethirdhighestaveragedailyrateofEUR72.20.
This would suggest that Dresden, Leipzig and Rostock
remain the most successful hotel markets in eastern
Germany. This is due to their appeal as tourist destina-
tions featuringnumeroushistorical and cultural sightsor
anattractiveseasidelocation.Nevertheless,Magdeburgis
catchingupfast.
While Potsdam’s hotel market ranks in the middle
of the pack, Erfurt again trails the other markets
Potsdam ranks in themiddleof the table.However, the
occupancy rate has risen noticeably in the state capital
ofBrandenburg.Afterasharpincreaseby3.6percentage
points,itreached64.4%in2014.Overthepastyear,hotels
in Potsdammarkedly increased their revenueper availa-
bleroom.TheRevPARincreasedby4.4%fromEUR43.26
perroomtoEUR45.15.ComparedtoothereasternGerman
cities, hotel rooms in Magdeburg and Erfurt continued
togenerate lower revenues.Witha slightdecline inkey
hotelmarketindicators,Erfurtisamongtheworstperform-
ingeasternGermancities.Average revenueper room in
Erfurt’s hotels decreased by 1.3% to EUR 38.07. The oc-
cupancyratealsofellslightlyby0.6percentagepointsto
62.8%inlinewithroomrates,whichdeclinedby0.4%to
anaverageofEUR60.66.131
129www.tophotelprojects.com/de/wieviele-hotels-werden-noch-deutschland-gebaut;accessed29.5.2015
130www.hotelier.de/hotellerie/hotelgewerbe/38086-neue-hotels-geplante-hotels-hotelneubau-hotelprojekte-und-hoteleroeffnungen#Deutschland;accessedon29.5.2015 131AllfiguresfromSTRGlobal,2015
38 |HotelpropertymarketinBerlin
KEY HOTEL MARKET INDICATORS
Number of
overnight stays
(2014)
Overnight stays.
change in %
(2011–2014)
Average occupancy
rate in %
(2014)
Revenue per room
in EUR. (RevPAR)
(2014)
Average room price
in EUR. ADR
(2014)
Berlin 28,688,700 28.3 74.2 66.35 89.39
Potsdam 1,035,800 13.8 64.4 45.15 70.15
Rostock 1,898,000 25.5 68.6 63.78 92.91
Dresden 4,441,896 16.9 66.9 48.30 72.20
Leipzig 2,764,851 29.5 68.9 52.25 75.82
Magdeburg 569,791 7.0 48.0 29.45 61.35
Erfurt 772,487 6.4 62.8 38.07 60.66
Jena 313,100 2.6 n/a n/a n/a
Sources:StatistischeLandesämter[StatisticalOfficesoftheGermanLänder],STRGlobal
*includingWarnemünde
Doubleortwinroombasedontwopersonssharing,bathorshowerandWC,includingtradefairprices,updatedregularly.Observationdays:15.3/28.3/12.4/26.4/10.5/24.5,15.3LeipzigBookFair
Hotel prices in EUR ærisinghotelpricesâflathotelpricesèfallinghotelprices
Source:HolidayCheck,hotel.de,hrs.de,booking.com,hotelreservierung.deowncalculations.
BB
MV
SNST
TH
✶ ❘ ✶ ✶ Trend ✶ ✶ ✶ Trend ✶ ✶ ✶ ✶ ❘ ✶ ✶ ✶ ✶ ✶
Trend
Berlin 32–160 â 35–300 æ 50–615 æ
Potsdam 55–100 â 55–155 æ 60–180 æ
Rostock* 30–90 â 45–125 è 60–320 æ
Dresden 35–85 â 35–125 â 45–220 â
Leipzig 30–100 æ 38–150 æ 40–190 â
Magdeburg 40–66 â 50–108 è 55–135 è
Erfurt 44–84 æ 64–150 æ 75–175 æ
Jena 45–79 æ 55–80 è 65–130 æ
BB
MV
SNST
TH
Hotelpricerangesbystarrating(1/2,3,4/5)inBerlinandeasternGermanyin2015(onadoubleroombasis)
Keyhotelmarketindicators|39
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CONTACTS
TLGIMMOBILIENAG
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E-Mail:[email protected]
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Tel.03024303310
Fax03024303309
E-Mail:[email protected]
Customerservices
Tel.08008540000
Fax:03024303123
South Branch
BudapesterStraße3
01069Dresden,Germany
Tel.035149130
Fax03514913460
E-Mail:[email protected]
Customerservices
Tel.08008548548
Fax03514913460
42 |Contacts
COMPANY AND LEGAL INFORMATION
Publisher:
TLGIMMOBILIENAG
CorporateCommunications
Hausvogteiplatz12
10117Berlin,Germany
Concept,projectmanagement,editorialcontent:
RUECKERCONSULTGmbH,Berlin
Production:
DUOWerbeagentur,Berlin
Dataasof12/2014
Noliabilityisacceptedforthe
accuracyandcompletenessofthe
informationcontainedherein.
Copyright:
09/2015©TLGIMMOBILIENGmbH,Berlin
Thispublication(includingtablesandcharts)isprotectedbycopyright.
Anyusewithoutthepublisher’sconsentisprohibitedandliabletoprosecution.
Thisapplies,inparticular,toreproductions,translations,microfilming,
aswellasstorageandprocessinginelectronicsystems.
Companyandlegalinformation| 43
TLG IMMOBILIEN AG
Hausvogteiplatz12
10117Berlin,Germany
Tel.030247050
Fax03024707337
www.tlg.de