Englisch

INDUSTRIAL AND LOGISTICS PROPERTY STUTTGART REGION2013

3

4

CONTENTS.

The Stuttgart Economic Region 4

Market Trends 5

Facts and Figures 6

Investments 8

Outlook 2013 8

Our Services 10

Your Contact Partners 10

ELLWANGER & GEIGER Real Estate 11

2

3

THE STUTTGART ECONOMIC REGION.

A81 direction Heilbronn

A81 direction Karlsruhe

A81 direction Singen

A8 direction Munich

County of Göppingen

County of Ludwigsburg

County of Esslingen

County of Rems-Murr

County of Böblingen

Ditzingen

Weilimdorf

Esslingen

industrial and logistics cluster*

* logistics space > 50,000 sqm industrial space > 100,000 sqm

Berlin

5

6

4

5

MARKET TRENDS.

Global concerns like Daimler, Porsche and Bosch, as well as many strong midsized companies have created employment and wealth in the Stuttgart Region. Their success is mainly due to excellent export rates, but also to a high level of specialisation and closely linked value chains. To ensure economic success in a global industrial environment, it will be crucial to remain flexible and competitive, and to provide an excellent infrastructure for businesses in the Stuttgart Region

ALLOCATION OF CAPITAL

One option for reaching these goals is to invest in modern

production facilities. This can be a challenge for midsized

companies due to the extremely high capital require-

ments and long capital commitment of such investments.

Especially in a volatile market environment, foreign capital

needs to be strategically allocated within the company.

The capital requirement for research and development

need to be harmonised with efficient production processes

and a high level of standards. Only a successful trade-off

between these factors will lead to sustainable economic

success.

RENTING OF PRODUCTION SPACE

Industrial companies may therefore consider to reduce

their capital commitment by renting property. Profes-

sional investors have met this demand with a balanced

provision of lettable office, logistics and storage space.

However, this trend is slow to gain ground in industrial

production, the very heart of German midsized companies.

In order to make use of production property as a hidden

resource, it is crucial to strengthen real estate compe-

tence within these companies. This can be reached by

implementing corporate real estate management or

through close cooperation with professional real estate

partners.

A NEW ASSET CLASS

In the near future, production property will become more

and more interesting for investors with a long term orien-

tation. A low probability of default, a strong binding to

location and long term leases of more than 10 years will

provide for stable, secure cash flows with above average

yields.

FLEXIBLE USE OPTIONS

The key to success in this new asset class will be standard-

ised multi-functional production facilities in industrial A

locations, the potential to be adapted to individual tenant

requirements. This may be logistics in a former production

site, or vice versa. Industrial and logistics tenants will

appreciate the multi-functionality of such facilities, as it

allows them to flexible react to market requirements.

FACTS AND FIGURES.

SPACE TURNOVER*

For 2012 ELLWANGER & GEIGER Real Estate were able

to determine a total of approx. 240,000 sqm of rented

industrial and logistics space within the Stuttgart Region.

This constitutes an increase in space turnover of approx.

45 per cent compared to the previous year (165,000 sqm).

With ca. 65,500 sqm, newly built logistics property

played a major part in this excellent result – a plus of

nearly 64 per cent compared with approx 40,000 sqm

in 2011. This means that newly built lettings made up

round about one third of the total space turnover.

In the county of Ludwigsburg alone, especially in Mark-

gröningen, Marbach am Neckar, Schwieberdingen and

Kornwestheim, ca. 56,000 sqm of newly built logistics

space were successfully placed on the letting market.

The remaining new developments were let in Esslingen

(ca. 5,500 sqm) and Stuttgart-Weilimdorf (ca. 4,100 sqm).

ELLWANGER & GEIGER Real Estate were able to win

Mercedes-AMG as tenant for the modern logistics

facility in Marbach am Neckar (ca. 12,000 sqm),

Schenker Deutschland AG for 10,500 sqm of multi-

functional logistics space in Schwieberdingen, as well

as Rhenus AG & Co. KG for the 4,100 sqm in Stuttgart-

Weilimdorf. These signings correspond with a market

share of about 41 per cent for newly built logistics space

in the Stuttgart Region. In 2012, the counties with the

highest lettable space turnover of existing and newly built

property were: Ludwigsburg with approx. 105,000 sqm

(2011: approx. 33,000 sqm), Böblingen with approx.

49,000 sqm (2011: approx. 35,000 sqm), Esslingen with

45,000 sqm (2011: approx. 49,000 sqm).

The most significant brownfiled transaction took place

in Winnenden, where Alfred Kärcher GmbH bought

ca. 58,000 sqm of Pfleiderer Ziegelfabrik (former brick

factory). This was closely followed by the selling of

the Redevco-areal in Markgöningen (ca. 53,000 sqm).

Porsche acquired the former Mercedes-Benz transmission

plant in Stuttgart-Zuffenhausen (ca. 45,000).

With regards to greenfield, HUGO BOSS acquired approx.

58,000 sqm in Filderstadt-Bonlanden for their new high-

bay warehouse. ELLWANGER & GEIGER Real Estate

launched approx. 41,000 sqm in Marbach am Neckar

designated for 24/7 industrial and logistics use, which

was sold to Gazeley.

In total, about 135,000 sqm of industrial and logistics

property were successfully listed by real estate agents

in 2012. This corresponds with approx. 56 per cent

of the total letting volume. ELLWANGER & GEIGER

Real Estate were able to market ca. 48,000 sqm, which

constitutes a market share of approx. 36 per cent.

* without lease extensions

7

8

6

7

RENTS

In 2012 the average net rent for existing industrial and

logistics space in the Stuttgart Region remained steady at

approx. € 4.70 per sqm, compared with € 4.75 per sqm

in the previous year.

Average net rents for newly built logistics space ranged at

€ 5.55 per sqm, with peak rents of € 6.60 per sqm in the

county of Ludwigsburg.

Tenants requested and leased production and storage space

mainly between 2,000 sqm and 5,000 sqm. For existing and

newly built logistics property, lettable spaces between

7,000 sqm and 10,000 sqm were most requested.

LEASE TERMS

The average lease duration for existing property still lies

between 3 an 5 years. Lately, a trend for shorter lease

terms could already be observed.

While lease durations range between 7 and 10 years for

newly built logistics, leases of 10 years and more are not

uncommon for newly built production space.

Range of net rents € per sqm

Average net rents € per sqm

trend 2013/2014

County of Böblingen 3.40 – 6.50 5.10

County of Esslingen 2.50 – 5.50 4.50

County of Göppingen 2.70 – 3.80 3.50

County of Ludwigsburg 3.70 – 6.60 5.00

County of Rems-Murr 1.80 – 4.00 2.90

Stuttgart 4.50 – 6.20 5.20

Total 3.25 –5.40 4.70

Source: BANKHAUS ELLWANGER & GEIGER KG ©, March 2013 monthly net rents

OUTLOOK 2013.

To remain cost competitive, industrial companies in the

Stuttgart Region will continue to outsource logistics

processes to external service providers. In order to meet

the constantly increasing requirements of the industry

and to ensure smooth process chains, an ongoing demand

for modern logistics property can be expected in 2013.

Especially contract logistics requires modern, flexible and

multi-functional facilities. The supply of such logistics

developments will remain limited, as no major speculative

construction project has yet been identified for 2013.

Similar trends can be observed at industrial companies in

the Stuttgart Region. Multi-functional newly built produc-

tion facilities have come into focus as owner occupier or

lease hold investment models. What counts for logistics,

also holds true for industrial property: modern industrial

production requires modern production facilities.

INVESTMENTS.

The demand for logistics and light industrial investment

opportunities by private and institutional investors has

remained on a high level in 2012. The high density of

logistics service providers in the Stuttgart Region is a

result of a strong economic base with an attractive mix

of SME´s and global concerns.

As in the previous year, also in 2012 predominantly private

investors were active on the market. Transaction volumes

for existing property ranged between € 3 m and € 8 m,

reaching gross initial yields of 7.5 per cent to 9.5 per cent.

Due to a general lack of new developments, Core property

will continue to be scarcely available. As a matter of fact,

only one logistics development in Böblingen sold to an

institutional investor for approx. € 30 m.

A modern logistics facility at the Stuttgart harbour was

sold in a portfolio together with two warehouses in

Sindelfingen, comprising a total of approx. 55,800 sqm

of logistics space.

For modern, highly flexible logistics property,

ELLWANGER & GEIGER expect initial gross yields

between 7.2 per cent and 7.8 per cent.

9

10

TOP YIELDS FOR COMMERCIAL PROPERTY (IN %)

2006 2007 2008 2009 2010 2011 2012 2013

8

9

In most cases, the refurbishment of existing space will not

necessarily pay off. Especially the high energy costs of

such older facilities stand in the way of modern and cost-

efficient industrial production.

For 2013, ELLWANGER & GEIGER expects steady market

rents, with a slight increase in average rents in some

counties. Base rents for newly built logistics facilities are

going to range at € 5.50 per sqm.

Source: Research BANKHAUS ELLWANGER & GEIGER KG ©, March 2013

LogisticsRetail Centres

OfficeOffice/Retail in Prime-Location

7,0

7,07,5 7,5 7,5

9,5

7,2

10,5 10,5

7,58,0

7,57,25

7,5

5,55,55,55,5 5,25 5,5

5,04,6

5,0 5,0 5,04,6 4,6

5,5

7,5

YOUR CONTACT PARTNERS.

The industrial and logistics sector has its own characteristics. In this field, you should rely on specialists who know the

requirements for buildings, infrastructure and property down to the last detail: ELLWANGER & GEIGER Privatbankiers.

You will benefit from our expertise, our long-standing experience and our comprehensive services.

Our team in Stuttgart looks forward to your call or visit. You can reach us at: Phone +49 (0)711/2148-286

or Fax +49 (0)711/2148-290.

Information on the Internet: www.privatbank.de

OUR SERVICES.

Markus Knab

Team Manager, Industrial and

Logistics Properties

Phone +49 (0)711/2148-227

Markus.Knab@privatbank.de

Alexander Fink

Consultant, Industrial and

Logistics Properties

Phone +49 (0)711/2148-261

Alexander.Fink@privatbank.de

Moritz Weeber

Consultant, Industrial and

Logistics Properties

Phone +49 (0)711/2148-383

Moritz.Weeber@privatbank.de

Kathrin Ziegler

Assistant Industrial and

Logistics Properties

Phone +49 (0)711/2148-286

Kathrin.Ziegler@privatbank.de

Letting Investment Valuation Consulting ResearchSale

INDUSTRIAL AND LOGISTICS

11

12

10

11

ELLWANGER & GEIGER REAL ESTATE.

ELLWANGER & GEIGER Real Estate offers you a one-stop shop for a comprehensive range of services relating to the asset class of real estate. With the very highest discretion and integrity, we enable you to keep your bearings in rapidly changing markets. Our success is founded above all on excellent knowledge of the market and decades of experience in the real estate business.

COMMERCIAL PROPERTY

Extensive research is the basis for our

analyses of locations, portfolios and

cost-effectiveness that reflect market

conditions. From this, we derive

strat egies whose goal is to capitalize

on potentials for earnings and effi-

ciencies.

Apart from comprehensive leasing

services, our core expertise includes

project consulting and transaction

business. We adopt a holistic approach

in consulting on real estate invest-

ments: we partner you all the way –

from the development of market ing

strategies, to preparation of data on

properties, to implementation of

marketing processes.

OUR SERVICES

Research

Investment analysis and consulting

Transactions, renting and leasing

of office, retail, industrial and

logistics facilities

FUNDS & ASSET MANAGEMENT

We plan individual real estate invest-

ments and create special funds for

institutional investors and professional

private investors (family offices).

Each investment approach is devised

in close consultation with the customer.

An investment volume is selected

that permits niche investments and

individual mandates. By creating

portfolios for single investors or small

groups, we are able to provide indi-

vidual support for the duration of the

investment. Different investment

vehicles are selected depending on

the needs and product preferences

of each investor.

OUR SERVICES

Special funds in accordance with

the German Investment Company

Act (KAGG)

Closed investment models

(KG, GmbH)

Luxembourg security funds and

special funds, SICAV, SIF

Individual schemes for offshore

investors

OUR LOCATIONS

Head office Stuttgart

Börsenplatz 1

70174 Stuttgart, Germany

Phone +49 (0)711/2148-286

Fax +49 (0)711/2148-290

www.privatbank.de

Branch office Munich

Herzog-Rudolf-Straße 1

80539 München, Germany

Phone +49 (0)89/17 95 98-0

Fax +49 (0)89/17 95 98-55

www.privatbank.de

OUR OTHER PUBLICATIONS

Retail Market Report Office Market Report Investment Market Report

can be obtained free of charge from:Kathrin.Ziegler@privatbank.de

DISCLOSURE:

The data for this market report has been sourced directly from city and

community authorities, as well as from realtors and owners. Our contact

partners received standardised questions concerning quantitative factors

like rental price, standard ground value, plot size and space turn- over,

as well as the prospects for the future. The quality of the answers to our

enquiry varied significantly. Some values were estimated, some data

was incomplete. However, this survey offers an overview of the current

trends and developments in the industrial and logistic sector of the

Stuttgart Region.

BANKHAUS ELLWANGER & GEIGER KG

Real Estate

Börsenplatz 1, 70174 Stuttgart, Germany

Phone +49 (0)711/2148-286, Fax +49 (0)711/2148-290

www.privatbank.de

Englisch