A LOOK INSIDE. THE STUTTGART OFFICE MARKET 2013/2014

BÜLOW CARRÉLautenschlagerstr. 21Office + retailCompleted in 201380% let (office)

HOSPITALHOFHospitalplatz/Gymnasiumstr.OfficeCompleted in 2013100% let

CITYGATEKriegsbergstr. 11Office + retailTo be completed 4th quarter of 2014

MILANEOOffice + retailTo be completed 1st quarter of 2015

LOOK 21Türlenstr. 2 Office + residentialTo be completed 1st quarter of 2017

4

5

PAULINEPaulinenstr. 21 Office completed in 201370% let (office)

CALEIDOTübinger Str. 41– 43Office + retail + residentialcompleted in 201360% let (offices)

DAS GERBERMarien-/Tübinger-/Paulinenstr.Office + retail + residentialTo be completed 4th quarter of 2014 15% let (office)

DOROTHEEN QUARTIERDorotheenstr./Holzstr. Office + retail + residentialTo be completed 2nd quarter of 2017 90% let (office)

* Data from a survey by BulwienGesa AG + Baasner, Möller & Langwald GmbH Source: Research BANKHAUS ELLWANGER & GEIGER KG ©, figures as of 31 December 2013

Year Volume

in sq. m

Representative

prime rents

Average central

business district

rents

Vacancies

(sq. m)

Vacancies

(%)

Total space

(mill. sq. m)

Completion

volume

(sq. m)

Pre-leased

volume

(sq. m)

2000 205,000 €16.87 €14.90 100,000 1.50 6,356 60,000 No data

2001 160,000 €18.41 €15.34 137,000 2.00 6,516 160,000 130,000

2002 127,000 €17.89 €14.80 292,000 4.20 6,828 312,000 220,000

2003 149,000 €17.50 €14.50 379,000 5.30 6,973 145,000 80,000

2004 152,000 €17.00 €14.50 415,000 5.70 7,102 129,000 93,500

2005 145,000 €17.00 €13.50 402,000 5.60 7,170 68,500 51,400

2006 140,000 €17.50 €13.50 467,400 6.50 7,222* 52,500 20,500

2007 169,000 €17.50 €14.50 466,000 6.40 7,253 32,600 23,400

2008 180,000 €18.00 €14.50 460,000 6.20 7,367 117,000 116,000

2009 171,000 €18.00 €13.60 453,000 6.12 7,401 40,000 22,000

2010 194,000 €17.50 €14.30 480,000 6.46 7,425 42,400 22,400

2011 285,000 €18.80 €14.30 424,000 5.70 7,449 45,900 41,200

2012 191,500 €20.00 €14.60 399,000 5.40 7,416 37,000 36,300

2013 258,000 20.00 14.40 365,000 4.87 7,496 81,200 62,700

OVERVIEW OF THE STUTTGART OFFICE MARKET

CONTENTS.

Foreword 8

Stuttgart – well prepared for the future 10

Steady progress in the Europaviertel 11

Stuttgart’s office market delivers impressive performance 12

Strong demand from the public sector and from industry 14

Large rental transactions playing a significant role 15

Rents remaining steady at a high level 16

Vacancy rate falls below the 5-percent mark 18

Stuttgart leading Germany in growth 20

Stuttgart central business district / city centre:

New spaces have attracted many tenants 22

Northern Stuttgart: Increasingly attractive 23

Eastern Stuttgart: Making rapid progress 24

Southern Stuttgart: Record results in some areas 25

Overview of the Stuttgart office market 27

Another vibrant market year expected for 2014 28

Your contact partners 30

ELLWANGER & GEIGER Real Estate 31

FOREWORD.

Stuttgart’s future: Investments in infrastructure.

Stuttgart’s citizens find their city very attractive, as do the companies based there and those

companies drawn by the many opportunities in the economic region and planning to relocate

there. To preserve the city’s high quality as a place to live and work, the most recent budget was

based on the principle “save in order to invest” – and the city’s infrastructure will be a major area

for these investments.

The raft of investment measures will address the needs of Stuttgart’s citizens and businesses, with

the aim of improving living conditions in many areas, most importantly child care, mobility, energy

and the provision of affordable housing.

Industrial and economic policies will focus on those areas of business and industry where the region

is already strong. Stuttgart’s companies are widely known for their expertise in mobility, machine

manufacturing and information technology. The city, already a leading automotive manufacturing

location, is also on the way to becoming the major centre for jobs related to mobility. This process

will require close cooperation with the local automotive manufacturers and their suppliers. One figure

reflects the ongoing transition from industrial production to services: 79.9 percent of all employees

in the city paying into the social insurance system are employed in the service sector. The financial

sector is crucial in this connection. It is a major employer in the city, accounting for 8.2 percent

of all jobs in the city, putting Stuttgart in second place among German cities after Frankfurt.

The engineering industry is another area in which environmental protection and the efficient use

of resources are gaining worldwide importance. Companies will have to develop energy-efficient

facilities and meet the requirements of the Industry 4.0 Strategy by implementing the necessary

sensor technology and software.

The goal is to make Stuttgart, already renowned as a location for research and industry, just as

well known as a centre for environmental technologies, while ensuring it remains Germany’s most

attractive city.

Fritz Kuhn

Mayor of Stuttgart

Ines Aufrecht

Director of Business Development, Stuttgart

A promising location.

In 2013 the turnover on Stuttgart’s office market was excellent, and the prospects for the coming

years look good too. The city continues to be attractive to investors as well as the working population.

Care was taken at an early date to set the right course for the future, and this has paid off. A good

example is electromobility, an area in which Stuttgart has been playing a pioneering role. In addition,

its universities are continually devising new study courses in renewable energy, and new business

clusters are sprouting up in medical technology. The city has taken important steps in these areas

to strengthen the links between research and education.

Given the current economic climate, the Stuttgart region can look forward to continued growth in

2014, as it will also continue to benefit from the export trade of locally-based companies. This means

that demand for energy-efficient, certified and optimally configured office space will likewise remain

strong. In view of developments in past years in the city centre, however, there will certainly be

fewer opportunities there for new projects. This will make it all the more important to promote

growth in the peripheral parts of Stuttgart.

The following pages present detailed facts and figures on developments in Stuttgart’s office market

in 2013. We hope you will find the report informative and will be glad to respond to any questions

or suggestions you may have.

Mario Caroli Björn Holzwarth

8

9

Source: GfK GeoMarketing, figures as of January 2014

28,920

25,566

24,920

24,297

23,469

23,236

19,423

Munich

Düsseldorf

Frankfurt

Stuttgart

Hamburg

Cologne

Berlin

PER CAPITA PURCHASING POWER IN 2013, IN €:

CITIES WITH 500,000 OR MORE RESIDENTS

STUTTGART – WELL PREPARED FOR THE FUTURE.

When planning for the future, cities have always had to take a wide range of continually changing factors into account. In this respect, Stuttgart has been very far-sighted, making itself equally attractive as a place to work for both employees and investors. This has been greatly appreciated in a number of different studies. For example, studies carried out by the HWWI and the Prognos Institute have recently commended the city for its forward-looking planning.

CLOSE LINKS BETWEEN ACADEMIA AND BUSINESS

The demand for highly qualified personnel is steadily in-

creasing in industries and service sectors where research

and expertise play an important role. It was Stuttgart that

recognised this trend at an early stage: in recent years, it

has encouraged the development of closer links between

academia and business, for example by establishing new

business clusters in medical technology and new courses of

study in the field of renewable energy.

IMPORTANCE OF ELECTROMOBILITY RECOGNISED

AT AN EARLY DATE

A number of years ago already, the city started to give

strong support to electromobility, becoming one of the

four model regions in Germany’s ”Showcase for Electro-

mobility”. The Car2Go concept has now become well

established, and hybrid buses provide a regular service

through the city.

INSTITUTIONAL INVESTORS ACTIVE IN THE

HOUSING MARKET

A well-functioning housing market is also very important

for the future. In the last two years, major institutional

investors have put money into projects like the “Pariser

Höfe”, “Milaneo” and “Gerber”: a total of approximately

750 new residential units have now been completed.

Additional projects will also help to meet the need to

build housing in the coming years, which comes to about

1,500 units annually. The last ten years have also seen

efforts by Stuttgart’s Student Social Services to create

housing for students. In the next three years alone, 1,000

additional units will be built as student residences and will

cover the needs of the city’s students, who now number

more than 70,000.

STUTTGART ONE OF GERMANY’S MOST ATTRAC-

TIVE RETAIL LOCATIONS

The retail sector is another major contributor to quality

of life in Stuttgart: with its 2.6 million consumers, the

city’s catchment area ranks fourth in the country in

attractiveness for retailers, behind Berlin, Hamburg and

Munich. The healthy state of Stuttgart’s economy is

reflected in its unemployment rate, which has been low

for years: at 4.3 percent it is well below the national

average of 6.8 percent.

STEADY PROGRESS IN THE EUROPAVIERTEL.

The Europaviertel is now coming alive. The new City Library has opened, and the 240 apartments in the “Pariser Höfe“ are now occupied. In 2014 the Sparkassenakademie and the Milaneo will be completed, another milestone in the development of this area which will enhance its urban character.

The “Pariser Höfe“ project was completed in late 2012,

and in the first quarter of 2014 the Sparkassenakademie

will be officially dedicated. The Sparkassenakademie has

some 12,600 square metres of new training and admini-

strative space and about 160 apartments. The “Milaneo“

project currently under construction will provide around

45,000 square metres of retail space, 7,400 square metres

of office space and 450 apartments. It will also feature a

165-room hotel belonging to the Starwood chain. The

retail premises will open in late 2014. Construction in the

other areas, including the residential units, is scheduled

for the first two quarters of 2015.

Construction work for the “Cloud No. 7” project began

in 2013. This residential and commercial high-rise will

have some 25 privately owned apartments a 175 room

hotel belonging to the Steigenberger Group and about

52 business apartments. It will probably be ready for

occupancy by the summer of 2016.

In addition, a number of projects have been launched in

the areas adjacent to the Europaviertel. Two three-star

hotels are being built: a Hampton by Hilton and a Holiday

Inn Express with a total of about 321 rooms. In addition,

an A&O hostel with some 400 beds is under construction.

Completion of these projects is expected by 2015 at the

latest. Development of the former Mercedes-Benz site is

also under way. This project, called “Look 21”, consists

of an elongated building facing Heilbronnerstrasse and

Türlenstrasse, and a residential complex at the rear.

Südwestmetall (Baden-Württemberg’s metal industry

association) will have its future headquarters here.

Part of the tram line is currently being relocated owing

to construction work on the Stuttgart 21 project. By

2016 the new U12 line through the Europaviertel will be

finished, and the original line will have been modified.

10

11

STUTTGART’S OFFICE MARKET DELIVERS IMPRESSIVE PERFORMANCE.

With some 258,000 square metres of rented office space as of 31 December 2013, Stuttgart’s office market exceeded all expectations. The result was already visible after the third quarter of the year. At that time the rental turnover, at approximately 194,000 square metres, had already surpassed the previous year’s total of some 191,500 square metres. Owner-occupiers accounted for about 36,000 square metres of the turnover, and of this amount some 23,000 square metres were contributed by the new building of the German Pension Insurance Association. The rental take-up for the whole year thus exceeded the previous year’s level by about 34 percent.

HIGHEST TURNOVER IN THE SOUTHERN FRINGE AREAS

The highest turnover for 2013 was achieved in Stuttgart’s

southern fringe areas. The biggest transaction was the

long-awaited rental contract of Ernst & Young GmbH in

Airport City, for about 25,500 square metres. Daimler AG

signed leases in Stuttgart-Möhringen and Leinfelden-

Echterdingen, for 11,315 and 17,640 square metres

respectively. In Stuttgart-Vaihingen the biggest contract,

for some 13,500 square metres, was signed by the book

wholesaler KNV, which plans to build a new administrative

building on the premises it formerly owned. In addition,

a new building was let to a single user in the Stuttgart

Engineering Park, located in Vaihingen. The turnover

figures in the submarkets of Leinfelden-Echterdingen and

Vaihingen-Möhringen were high as well.

In the northern fringe areas, the Zuffenhausen/Feuerbach

submarket showed good results. The main factor here,

however, was the decision of the German Pension Insurance

Association to build in Stuttgart-Freiberg, with some

23,000 square metres.

RENTAL TURNOVER IN STUTTGART’S CENTRAL

BUSINESS DISTRICT NOT UP TO PREVIOUS LEVELS

The rental turnover in Stuttgart’s central business district

came to approximately 34,600 square metres, which

was well below the levels of the previous two years. The

main reason was a lack of big transactions, although the

demand for large premises is still strong and some major

contracts are currently under negotiation. In 2013 the

largest contract in the central business district came to

about 5,000 square metres.

In the city centre, not quite as many contracts were signed

as in the previous year. The biggest transaction involved

the new building project of Südwestmetall, Baden-

Württemberg’s metal industry association. Located on the

former Mercedes premises on Türlenstrasse, it has about

11,200 square metres of space.

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Central business district 4,600 55,100 33,300 43,000 61,500 44,400 38,200 32,800 63,000 61,500 34,600

City centre 28,400 21,700 43,200 31,300 46,600 41,700 83,800 66,600 97,500 58,400 51,000

Vaihingen/Möhringen 14,450 30,800 10,400 32,600 13,700 18,500 20,200 26,200 56,300 18,200 62,200

Fasanenhof 72,500 4,000 3,700 3,500 2,300 10,600 2,700 5,300 12,500 7,400 5,700

Feuerbach/Zuffenhausen 8,400 20,600 9,800 2,000 6,800 12,300 3,300 28,500 24,800 18,700 27,200

Degerloch 3,000 6,000 3,400 4,500 7,200 9,200 4,900 2,100 4,000 4,800 1,900

Weilimdorf 750 3,000 6,600 6,000 5,100 12,800 5,900 11,400 5,500 5,300 7,700

Bad Cannstatt/Wangen 14,000 7,700 24,600 13,500 15,400 12,500 8,100 8,300 13,400 12,000 19,800

Leinfelden-Echterdingen 2,900 3,100 10,000 3,600 10,400 18,000 3,900 12,800 8,000 5,200 47,900

Total 149,000 152,000 145,000 140,000 169,000 180,000 171,000 194,000 285,000 191,500 258,000

159,

00

0

127,

00

0

149,

00

0

152

,00

0

145,

00

0

140,

00

0

169,

00

0

180,

00

0

171,

00

0

194,

00

0

191,

500

285

,00

0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

RENTAL TAKE-UP IN STUTTGART AND SUBMARKETS IN SQ. M

RENTAL TAKE-UP OF OFFICE SPACE IN STUTTGART 2001–2013 IN SQ. M

Source: Research BANKHAUS ELLWANGER & GEIGER KG ©, figures as of 31 December 2013

Source: Research BANKHAUS ELLWANGER & GEIGER KG ©, figures as of 31 December 2013

25

8,0

00

12

13

STRONG DEMAND FROM THE PUBLIC SECTOR AND FROM INDUSTRY.

Demand from the “other office users” category, which

includes various services providers, self-employed

professionals and retail companies, came to approximately

73,900 square metres. This corresponded to about 29 per-

cent of total rental turnover. The public sector was another

important source of demand: it accounted for about 24 per-

cent of turnover, or some 61,300 square metres. This figure

includes rental transactions by associations, and also the

decision of Baden-Württemberg’s metal industry association

to build new headquarters on Türlenstrasse with about

11,200 square metres.

Following a slight decline in 2012, demand from the

“energy” and “industry” sectors came back strongly. The

companies in this category rented some 45,500 square

metres of office space, amounting to about 18 percent

of the total rental volume. Prominent among them was

Daimler AG, with two major transactions. The “consultants”

category again played a significant role in Stuttgart’s

office market. The transactions here totalled approximately

41,500 square metres, most importantly the 25,500 square

metres leased by Ernst & Young at Stuttgart Airport.

In terms of percentage, demand in the “IT/telecommuni-

cations category” declined, but this was only due to the

increase in the market’s total turnover, and not to a fall in

demand. In absolute terms, the demand in this category

came to approximately 21,600 square metres, almost

matching the previous year’s level of 22,300 square metres.

Demand in the “financial service providers” category fell

last year by more than 50 percent compared to 2012. It

amounted to only 7,100 square metres, as against 14,600

square metres the previous year. Demand was also lower in

the “media/communications” category. It likewise came to

only 7,100 square metres, or 2.7 percent of total turnover.

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Media/Communication 4.00 8.00 6.64 6.27 5.56 6.14 4.07 3.82 5.20 2.74

Financial service providers 34.00 12.00 9.93 10.36 15.78 8.36 8.41 8.67 7.60 2.77

Consultants 5.00 10.00 20.29 18.4 13.39 7.72 13.35 8.00 16.70 16.00

Public sector 9.00 21.00 3.21 17.75 7.22 30.41 8.14 13.68 14.50 23.74*

Other 29.00 28.00 35.21 37.28 36.94 40.94 48.04 40.42 35.00 28.61

Energy/Industry 9.00 13.00 12.86 – – – – 15.79 9.30 17.77

IT/Telecommunications 10.00 8.00 11.86 9.94 21.11 6.43 17.99 9.62 11.70 8.37

Total 100 100 100 100 100 100 100 100 100 100

TAKE-UP BY SECTORS IN %

* including take-up by associations amounting to approx. 30%Source: Research BANKHAUS ELLWANGER & GEIGER KG ©, figures as of 31 December 2013

LARGE RENTAL TRANSACTIONS PLAYING A SIGNIFICANT ROLE.

Stuttgart has a tradition of a large number of transactions for small premises. In 2013 there were again more than 200 leases for premises up to 500 square metres. But eight major transactions accounted for the biggest share of the rental turnover. A total of 314 contracts were signed.

In the segment up to 500 square metres, there were 229

transactions, with a total rental volume of approximately

54,300 square metres. Of these, 133 were in the central

business district and city centre. In all, they came to

31,100 square metres, or about twelve percent of the total

rental turnover.

For premises in the range from 501 to 1,000 square metres,

there were 53 transactions, a slight decline compared

with the previous year. Transactions in the segment from

1,001 to 2,000 square metres almost reached the previous

year’s level. Here 18 leases were signed totalling some

24,800 square metres. In the segment from 2,001 to

5,000 square metres there was much less movement.

Whereas there were 14 transactions in this range in 2012,

there were only six in 2013.

The largest share of the transactions, accounting for 46 per-

cent of the total and approximately 120,000 square metres,

was in the segment above 5,000 square metres. Only

eight leases sufficed to reach this figure. Four were for

premises exceeding 10,000 square metres, such as the

transaction by the State of Baden-Württemberg and two

by Daimler AG in Möhringen and Leinfelden-Echterdingen.

Two exceeded 20,000 square metres: Ernst & Young at

Stuttgart Airport and the German Pension Insurance

Association in Stuttgart-Freiberg.

Source for both charts: Research BANKHAUS ELLWANGER & GEIGER KG ©, figures as of 31 December 2013

Total space 2012: 191,500 sq. m

2012

COMPARISON OF NEW CONTRACTS BY SIZE

54,

25

8

54,

720

37,1

83

40,

86

8

24,7

33

24,0

03

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

2013

Total space 2013: 258,000 sq. m

22

,141

43,1

46

119,

685

28

,763

Total number 2012: 292

2012

197 2

29

59 53

18 614 4 8

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

2013

Total number 2013: 314

COMPARISON OF NEW CONTRACTS BY NUMBER

18

14

15

RENTS REMAINING STEADY AT A HIGH LEVEL.

In 2013, the rent levels on Stuttgart’s office market again held steady: the average rent for Stuttgart as a whole was relatively high at 12.00 euros per square metre.

A total of 137 leases, or 43 percent, were signed in the

price segment up to 10.00 euros per square metre. In

the range from 10.01 to 13.00 euros per square metre

112 leases were signed. The next segment, 13.01 to 15.00

euros per square metre, showed a significant increase:

78 transactions in 2013 as compared to 48 in 2012. In

the range above 15.00 euros per square metre, 27 office

premises were newly rented, 11 of which were above

17.00 euros per square metre.

CENTRAL BUSINESS DISTRICT: HIGH-QUALITY

PREMISES COMMAND PRIME RENTS

In 2013, the prime rent in Stuttgart’s central business

district remained at about 20.00 euros per square metre,

as confirmed by a number of new lease agreements.

The average rent, at about 14.40 euros per square metre,

was slightly below the 2012 average of 14.50 euros. Rents

in the city centre showed significant increases, with new

projects and expensive renovations of old buildings

pushing the peak rent from 16.00 euros per square metre

in the previous year to 17.00 euros per square metre. The

average rent rose accordingly, from 11.50 to 12.00 euros

per square metre.

SUBMARKETS DEVELOP THEIR POTENTIAL

In the southern outlying districts of Vaihingen/Möhringen/

Fasanenhof and Leinfelden-Echterdingen, the peak rent

rose to 15.00 euros per square metre and the average

rent to about 11.60 euros per square metre, largely on

account of the Ernst & Young transaction and new leases

in the Colorado office building. In the eastern submarkets,

the average rent rose from 10.00 euros in 2012 to 10.60

euros per square metre, owing to various new leases in

Bad Cannstatt.

Rents showed a declining trend only in the northern fringe

areas: of the leases signed in 2013, the most expensive

was for only about 10.10 euros per square metre. There

were few transactions for new premises owing to a lack

of supply. The average rent was about 8.50 euros per

square metre.

Prime rents

Average rents

PRIME AND AVERAGE CENTRAL BUSINESS DISTRICT RENTS 2001 – 2013 IN €/SQ. M

15.3

4

•18

.41

14.8

0

•17

.89

14.5

0

•17

.50

14.5

0

•17

.00

13.5

0

•17

.00

13.6

0

•17

.50

14.5

0

•17

.50

14.5

0

•18

.00

13.6

0

•18

.00

14.3

0

•17

.50

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: Research BANKHAUS ELLWANGER & GEIGER KG ©, figures as of 31 December 2013

14.3

0

•18

.80

14.5

0

•2

0.0

0

14.4

0

•2

0.0

0

XX

X

PRIME AND AVERAGE RENTS 2013 IN €/SQ. M

14.4

0

20.

00

12.0

0

17.0

0

8.5

0

10.1

0

10.6

0

11.5

0

11.6

0

15.0

0

Average rentsPrime rents

Source: Research BANKHAUS ELLWANGER & GEIGER KG ©, figures as of 31 December 2013

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

16

17

In spite of the appreciably higher completion volume,

only a small amount of new space came onto the market,

because many new premises had been pre-let. In

Stuttgart’s central business district and city centre, the

supply of office space remained almost unchanged. The

situation was however better for high-quality office

space in the central business district. Large units became

available in existing buildings, and a number of new

construction projects like the Bülow Carré, Caleido and

Pauline were completed. There is still a shortage in the

segment below 500 square metres.

Leinfelden-Echterdingen showed significant change:

leases were signed for large amounts of space in existing

premises, reducing the total vacant space from about

68,100 square metres to about 50,500 square metres.

The number of available premises in relation to demand is

still too high, however.

VACANCY RATE FALLS BELOW THE 5-PERCENT MARK.

The supply of vacant office space continued to decline. At the end of the year, it totalled some 365,000 square metres, as compared to the total office space of about 7.5 million square metres. This equates to a vacancy rate of about 4.9 percent. There was also a marked drop in the supply of space for subtenants: at present only about 7,200 square metres are available.

COMPLETION VOLUME IN SQ. M

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

81,2

00

62,7

00

79,7

00

43,1

00

312

,00

0

22

0,0

00

145,

00

0

80,

00

0

143,

500

131,

500

68

,50

0

51,4

00

49,

00

0

28

,50

0

32,6

00

23,

40

0

115,

60

0

104,

90

0

40,

00

0

22

,00

0

42,4

00

23,

20

0

45,9

00

41,2

00

37,0

00

36,3

00

Pre-lettingBuilding completion

82,3

00

77,1

00

In Vaihingen and Möhringen, the supply of vacant office

space diminished as a result of new leases in the “Am

Wallgraben” commercial area. A construction project in

progress in the Stuttgart Engineering Park has already

found a tenant, accounting for most of the available

space here too. The supply was also slightly reduced in

the southern district of Degerloch. In the Fasanenhof

commercial area, the supply of vacant space remained

almost unchanged.

Bad Cannstatt in eastern Stuttgart experienced a significant

decline in available space: hardly any new building space

was created, and major transactions with Deutsche Telekom

and the State of Baden-Württemberg cut the supply from

some 30,600 square metres in 2012 down to about

23,200 square metres at the end of 2013. In the north,

Feuerbach and Zuffenhausen showed very little change.

Weilimdorf did however increase its supply of vacant

space from some 41,100 square metres to approximately

46,000 square metres.

VACANT OFFICE SPACE AS OF 31 DECEMBER 2013

Stuttgart central business district 70,200 sq. m

Stuttgart city centre 71,000 sq. m

Bad Cannstatt, Wangen etc. 23,200 sq. m

Fasanenhof 24,000 sq. m

Feuerbach, Zuffenhausen 14,100 sq. m

Degerloch 10,200 sq. m

Leinfelden-Echterdingen 50,500 sq. m

19.45%

100%(equal to approx.

365,000 sq. m)

19.23%

13.84%

Weilimdorf 46,000 sq. m

12.60%

6.58%

Source for both charts: Research BANKHAUS ELLWANGER & GEIGER KG ©, figures as of 31 December 2013

Möhringen 32,300 sq. m

8.85%

Vaihingen 23,500 sq. m

6.44%

3.86%2.79%

6.36%

18

19

All told, the turnover of office space in the “Big Seven”

came to some 2.9 million square metres. Whereas Ham-

burg and Cologne showed only slight increases of 2.3

and 3.7 percent respectively, Düsseldorf and Stuttgart

had gains of 12.7 and 34.7 percent respectively. Düssel-

dorf led the group, with some 347,000 square metres – the

best result in five years. Berlin had a decline of 17.3 per-

cent to 521,000 square metres, mainly owing to a drop

in leases in the segment above 5,000 square metres.

In Munich, the turnover volume fell by 15.1 percent to

608,200 square metres.

In Hamburg, Berlin and Stuttgart, the peak rents held

steady at the previous year’s levels of 24.00 euros, 22.00

euros and 20.00 euros per square metre respectively. In

Cologne, the peak rent rose slightly to 21.25 euros per

square metre. Munich, with 32.50 euros per square metre,

was about 0.50 euros higher than in 2012. Düsseldorf

posted a gain of 1.50 euros to 27.50 euros per square

metre.

The average rent in Hamburg remained unchanged at

14.00 euros per square metre, whereas in Berlin and

Stuttgart it declined to 12.30 and 12.00 euros per square

metre respectively. Düsseldorf saw a rise (6 percent),

as did Cologne (4.5 percent), while in Munich it rose

(1.3 percent) to 15.10 euros per square metre.

The sharpest drop in the vacancy rate was in Berlin, where

it fell by 10 percent from 1.10 million square metres to

0.99 million square metres. Stuttgart followed with a

decline of 8.5 percent from 399,000 square metres to

365,000 square metres.

STUTTGART LEADING GERMANY IN GROWTH.

The markets in Germany’s seven top real estate locations (Berlin, Düsseldorf, Frankfurt, Hamburg, Cologne, Munich and Stuttgart) were largely stable. Düsseldorf and Frankfurt posted good gains. Peak rents stayed constant or, as in the case of Cologne, Munich and Düsseldorf, increased. In Berlin the average rent declined. Vacancy rates went down at all office locations.

Turnover of space in sq. m Peak rent in €Average rent in the central

business district in €Vacancy rate in %

2013 2012 2013 2012 2013 2012 2013 2012

Berlin 521,000 630,000 22.00 22.00 12.30 13.20 5.3 5.9

Düsseldorf 347,000 308,000 27.50 26.00 14.95 14.90 10.9 11.6

Frankfurt 447,600 514,800 38.00 35.00 18.50 17.50 13.7 13.9

Hamburg 440,000 430,000 24.00 24.00 14.00 14.00 7.0 7.4

Cologne 280,000 270,000 21.25 21.00 11.90 11.40 7.4 7.6

Munich 608,200 716,700 32.50 32.00 15.10 14.90 6.3 6.8

Stuttgart 258,000 191,500 20.00 20.00 12.00 12.40 4.9 5.4

Frankfurt Düsseldorf Cologne Munich Berlin Hamburg Stuttgart

COMPARISON OF VACANCY RATES IN GERMANY IN %

7.4

9.6

8.3 8

.9

8.2

7.6

6.3

9.1 9.

7

8.3

7.7

6.8

5.3

8.2 8.4 8.9

8.4

5.9 7.

0

6.7 7.

5

9.8

8.1

7.4

4.9

6.2

6.1 6.5

5.7

5.4

11.5

11.8

11.6

9.8 10

.3 10.9

Source: GPP German Property Partners, figures as of 31 December 2013

Source: GPP German Property Partners, figures as of 31 December 2013

TURNOVER OF SPACE OF THE BIG SEVEN 2003 – 2013 IN SQ. M

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: GPP German Property Partners, figures as of 31 December 2013

149,

00

0

140,

00

0

5

10,0

00

152

,00

0

4

80,

00

0

145,

00

0

5

80,

00

0

6

20,

00

0

169,

00

0

8

20,

00

0

180,

00

0

7

65,0

00

171,

00

0

5

40,

00

0

194,

00

0

5

90,

00

0

191,

500

7

16,7

00

Munich

Frankfurt

Hamburg

Berlin

DüsseldorfCologneStuttgart

STUTTGART COMPARED TO OTHER GERMAN CITIES

13.7

13.9

14.3 15

.1

14.4

13.9

2008

20092010

2011

2012

2013

285

,00

0

8

53,0

00

25

8,0

00

6

08

,20

0

20

21

EuG_RE-J-13014_Bueromarktber_

Inh_2012_lay02_Ansicht_18-19_

Vers1.jpg

STUTTGART CENTRAL BUSINESS DISTRICT / CITY CENTRE:

NEW SPACE HAS ATTRACTED MANY TENANTS.

In 2014 the upgrading of the Gerberviertel will be completed. Negotiations for these attractive new premises in the city centre are already under way. In the central business district, 92 percent of the new leases were in the segment up to 1,000 square metres. Demand for large and expensive premises was very weak.

In 2013, following a wave of completions in 2011 and 2012,

tenants were found for many of the new premises. In the

Caleido project, for example, 60 percent of the space has

been let, and for the Pauline building the figure is 70 per-

cent. The Gerberviertel project recently announced its first

lease, which was signed with a law firm. By 2015 some

7,000 square metres of office space will be available here.

The Gerberviertel is growing steadily in attractiveness:

the retail areas will be completed in the autumn of

2014, the office space and apartments will be ready for

occupancy in 2015, and the Globetrotter building in the

Tübinger Carré (formerly Eberhard-Passagen) will open

in 2014.

Three new leases were signed in the Bülow Carré, raising

the occupancy level to 80 percent. The CityGate project

will be ready for occupancy in late 2014, and a number of

leases are already being negotiated.

In the central business district, 43 percent of the rented

premises were in the segment up to 500 square metres,

and 23 percent were in the range up to 1,000 square

metres. No leases were signed in the segments between

2,001 and 4,000 square metres. In the range above

5,000 square metres there was only one contract:

the German Federation of Trade Unions, which is currently

renovating its building, signed an interim lease. In the

central business district, 49 percent of the rented premises

went for less than 14.00 euros per square metre, and

35 percent for 14.00 to 17.00 euros per square metre.

Only 17 percent were let for 17.00 euros or more.

In the city centre, the Rosenberghöfe project, with some

11,400 square metres of office space, is currently under

construction on the site formerly occupied by the AOK.

The AOK, which intends to return to its former site, will

occupy some 5,000 square metres, while an IT company

has signed for about 1,600 square metres. Currently,

about 50 percent of the space has been let; completion is

scheduled for June 2014.

In the city centre, 57 percent of the rented premises were

in the segment up to 1,000 square metres and 20 per-

cent in the segment from 1,001 to 3,000 square metres.

A single contract for 11,200 square metres, accounting

for 22 percent of the total, was concluded on the former

Mercedes-Benz site on Türlenstrasse. Twenty-six percent

of the premises were let for up to 10 euros per square

metre, 71 percent for 10 to 15 euros, and only 2 percent

for 15.01 euros or more.

EuG_RE-J-13014_Bueromarktber_

Inh_2012_lay02_Ansicht_18-19_

Vers1.jpg

FEUERBACH/ZUFFENHAUSEN

Feuerbach and Zuffenhausen have always been closely

linked to the automotive industry. In 2013, automotive

suppliers signed fewer new leases than in previous years,

but the decision by Porsche AG to establish new factories

for vehicle bodies and engines will do much to strengthen

these locations.

On Heilbronnerstrasse too, where automotive manu-

facturers are concentrated, the trend is positive. Audi

opened its new branch here in late 2013. Daimler AG

acquired property adjacent to its sales area at the corner

of Heilbronnerstrasse and Borsigstrasse in order to

establish a branch. VW will follow with a new facility on

the Kiefer site in 2015.

The Oasis II construction project is scheduled to be

completed in the first quarter of 2015. The Skyline project,

which includes further apartments and some 10,000 square

metres of office space, is in the planning stage.

On the whole, demand was low on the Feuerbach/

Zuffenhausen market in 2013. Although the annual turn-

over of about 43,000 square metres might first seem

impressive compared with the previous ten-year average

of 13,500 square metres, it must be pointed out that the

new building of the German Pension Insurance Association

alone accounted for 23,000 square metres of that total.

WEILIMDORF

In 2012 Stuttgart’s Business Development Department

and several property owners launched an initiative to

enhance the attractiveness of the location. Their reason

was the departure of the large-scale user Ernst & Young,

scheduled for the first quarter of 2016. The planning so

far includes the establishment of a day nursery and the

energy-efficient upgrading of a number of buildings.

If implemented before the departure of Ernst & Young,

these measures would have a favourable impact on

the location’s general image. Another helpful factor is

the continued growth of the software company Vector

Informatik: this company has been steadily expanding

in recent years. Major companies like Siemens and

Vodafone are also contributing to the development of

the location.

The rental turnover in Weilimdorf came to 7,700 square

metres, 45 percent more than in 2012 and significantly

above the ten-year average of 6,200 square metres.

Ten leases were signed in the segment up to 500 square

metres, and two were signed between 500 and

2,000 square metres. Ninety-two percent of the rented

space was let for rents between 8.00 and 9.00 euros per

square metre.

NORTHERN STUTTGART: INCREASINGLY ATTRACTIVE.

22

23

EASTERN STUTTGART: MAKING RAPID PROGRESS.

BAD CANNSTATT/HEDELFINGEN/WANGEN

In 2013 land-use planners continued to push ahead with

the Neckarpark, located on the site of the former goods

station in Bad Cannstatt: the project will be implemented

in the coming years. It has now been agreed to create a

central green area covering a space of 60 x 200 metres.

One party has been given a purchase option on the

sites for the planned office building on Daimlerstrasse.

Following intensive negotiations with users like the

Red Cross and the sports clinic, it now appears that

construction can soon begin on several sites.

The area around the Kegelenstrasse metropolitan train

station has also been improved. The new youth club

called DAS CANN has opened, and in 2012 already the

former Friedel chocolate factory was converted into the

Friedel Lofts. Together with the new city museum, these

buildings add much to the attractiveness of the area

adjoining the Neckarpark.

The Cannstatt/Hedelfingen/Wangen office market

continues to be characterised by transactions for less

than 500 square metres. Throughout the area there is

a shortage of small, well-equipped office units, so the

market offers interesting potential for developers with

the right ideas.

The number of new leases declined slightly in comparison

with previous years, but turnover stayed at the same level.

In fact, at some 19,800 square metres it was well above

the ten-year average of roughly 12,900 square metres,

due to a major contract signed in 2013 by the State of

Baden-Württemberg for the police, which amounted to

about 11,500 square metres, and a contract by Deutsche

Telekom for about 3,600 square metres. Thanks to these

transactions, 89 percent of the space was let in the price

segment between 10.01 and 11.00 euros per square metre.

SOUTHERN STUTTGART: RECORD RESULTS IN SOME AREAS.

DEGERLOCH

Degerloch, in particular the area around Albplatz, continues

to be a sought-after office location. Unfortunately, once

again there were no new construction projects in 2013,

severely limiting the supply of modern office space.

Existing premises with open-plan structures are not much

in demand, and it takes a long time to market them. The

Tränke industrial estate offers simpler kinds of office space

for production-related use.

Turnover continued to be low in 2013: of the total rented

space, which amounted to 1,900 square metres, 58 per-

cent was in the segment below 500 square metres. Only

one contract, for 790 square metres, was signed for larger

premises. Although demand for large premises exists, no

other contracts were signed in the area owing to a lack of

suitable offers. Ninety percent of the rented space went

for prices between 9.01 and 11.00 euros per square metre.

The scarcity of premises in Degerloch has already made

itself felt in the neighbouring district of Möhringen,

where developers are pushing to build in the site formerly

occupied by the Hansa company.

LEINFELDEN-ECHTERDINGEN

With a total of some 47,900 square metres of rented

office space, Leinfelden-Echterdingen achieved very good

turnover. This was mainly the result of two large trans-

actions for space in existing buildings: one by a carmaker

for about 17,600 square metres and one by an IT company

for 1,350 square metres. The Leinfelden-Unteraichen

submarket, which had a high vacancy rate in past years,

benefited in particular.

Ernst & Young signed the lease for its new premises at

the airport. This helped pave the way for the construction

of “Airport City”, with a potential total volume of some

100,000 square metres of new building space for offices,

services and hotels. Stuttgart’s long-distance coach

terminal is already under construction, and the infra-

structure will soon be expanded when the ICE train station

is complete.

Most of the 13 transactions were in the segment up to

500 square metres. Eight leases, for a total of 21,900

square metres and hence about 45 percent of the total

turnover, were signed for rents in the range from 7.50 to

11.00 euros per square metre. There were three trans-

actions for more than 12.00 euros per square metre.

The average rent for the Leinfelden-Echterdingen sub-

market was thus 12.70 euros per square metre.

24

25

FASANENHOF

Fasanenhof stands to benefit significantly as a location

when the infrastructure is improved by the suburban rail-

way being extended to the airport, providing access to

the future long-distance train station. For the first time, a

project exists that could permit the creation of a user-

specific building within a predictable period. The total

turnover came to some 5,700 square metres, slightly

above the previous year’s figure of 5,200 square metres.

Nineteen leases were signed, most of which, as in previous

years, were for premises smaller than 500 square metres.

There were two transactions in the segment from 501 to

1,000 square metres. The segment from 9.01 to 10.00 euros

per square metre accounted for 89 percent of the leased

space, and about 11 percent of the space went for less

than 9.00 euros per square metre. The average rent was

9.50 euros per square metre.

VAIHINGEN/MÖHRINGEN AND STEP

The turnover in 2013 was excellent: approximately

62,200 square metres of office space was let to new

users, almost three times the average rental take-up rate

for the previous ten years.

Demand for space in the “Am Wallgraben” industrial

estate was high, one major transaction being the renting

of an office building with some 15,500 square metres by

a carmaker.

Another major transaction was concluded by the book

wholesaler Koch, Neff & Volckmar. A new administrative

building with some 13,500 square metres is being

con structed on the company’s former site. More than 600

employees will move in when the building is completed

in late 2015. In addition, the city, the Business Develop-

ment Department, the region, the local council and a

new investor are planning further development of the

site, which covers a total of some 80,000 square metres.

A number of existing buildings will be preserved and

new construction projects are planned. As a result, the

area including Industriestrasse, Ruppmannstrasse,

Schockenriedstrasse and Wallgraben will help enhance

the quality of the industrial estate.

In the Stuttgart Engineering Park (STEP), construction has

begun on the new building project 7.1, which comprises

some 5,800 square metres. Work on the second phase,

7.2, can be expected to start soon, as the premises under

construction have already been let. The Centre for Solar

Energy and Hydrogen Research, situated adjacent to the

projects 7.1 and 7.2, has now been approved. The building

will provide some 10,000 square metres for research labs,

workshops and offices.

The industrial estate on Sigmaringerstrasse, which is a

part of Möhringen, includes the area formerly occupied

by the production plant of Hansa Metallwerke AG. This

company is building its new administrative building on

these premises, which cover some 5,000 square metres.

Completion is scheduled for the second quarter of 2015.

The remaining area will be able to accommodate up to

10,000 square metres of office space.

In 2013, on the initiative of the city of Stuttgart, a planning

study was produced for the vacant IBM site. The complex,

which was designed by the architect Egon Eiermann, is to

be preserved and put to appropriate use.

A total of 48 leases were concluded in the Vaihingen/

Möhringen submarket. Eight of them were for less than

8.00 euros per square metre and 17 were for 8.01 to

10.00 euros per square metre. Together they accounted

for about 37 percent of the turnover in this submarket.

Most of the leases were in the segment from 10.01 to

13.00 euros per square metre. Rents exceeding 16.00 euros

per square metre were achieved in the 19-storey Colorado

office tower in Vaihingen. There were 26 transactions for

premises smaller than 500 square metres, corresponding to

54 percent of the leases. Thirteen office units were let in

the segment from 501 to 1,000 square metres, and there

were only four between 1,001 and 3,000 square metres.

Four leases were signed for premises larger than 4,000

square metres. Two, together accounting for 9,100 square

metres, were in the range between 4,001 and 5,000 square

metres. Three leases, each for more than 5,000 square

metres, brought the total to 30,600 square metres of

rented space, or about 49 percent of the entire turnover

in the Vaihingen/Möhringen area.

A 81

< 10,000 sq. m

10,000 – 20,000 sq. m

20,000 – 30,000 sq. m

30,000 – 40,000 sq. m

above 40,000 sq. m

A 8 towardsKarlsruhe

Stuttgart motorway intersection

A 81towards Singen

A 8 towards Munich

A 81towards Heilbronn

Industrial parks/office locations

NorthernStuttgart

EasternStuttgart

CentralStuttgart

SouthernStuttgart

WesternStuttgart

OVERVIEW OF THE STUTTGART OFFICE MARKET.

A 81

< 10,000 sq. m

10,000 – 20,000 sq. m

20,000 – 30,000 sq. m

30,000 – 40,000 sq. m

above 40,000 sq. m

A 8 towardsKarlsruhe

Stuttgart motorway intersection

A 81towards Singen

A 8 towards Munich

A 81towards Heilbronn

Industrial parks/office locations

NorthernStuttgart

EasternStuttgart

CentralStuttgart

SouthernStuttgart

WesternStuttgart

Turnover of office space in 2013

26

27

Although the completion volume more than doubled in

2013, only a few of the premises were new on the market

because many had already been pre-let. Demand for

energy-efficient, certified and optimally configured office

space will however remain strong, as there has been a clear

trend for many years now towards optimisation among

both users and developers. Numerous projects have been

completed in recent years, and as a consequence there

are fewer opportunities to implement new projects in the

city centre. For the most part, the demolition or renovation

of existing buildings are the only remaining options.

Peak rents will remain high in 2014, as a number of trans-

actions can be expected in new and high-priced projects.

In recent years, rents have shown a continuous upward

trend, especially in the southern fringe areas. Renters in

the other submarkets have likewise demonstrated a

willingness to pay an appropriate price for new, high-

quality premises. Major changes in the market have

brought about a significant improvement in the quality

of the available premises.

ANOTHER VIBRANT MARKET YEAR EXPECTED FOR 2014.

The economic forecasts for Germany point to a relatively successful 2014. The Stuttgart region, which benefits strongly from exports by local companies, can look forward to continued growth in the year ahead. Unlike previous years in which it was difficult to make predictions, 2014 seems to be a year for which forecasting is easier.

On the other hand, there are still many users on the

Stuttgart market who need simple premises at an

average price.

The marketing of existing premises has become more dif-

ficult, however; this is because of the more rigorous re-

quirements of public authorities and factors like increa-

sing energy prices. As a result, owners of such properties

who want to remain competitive will be forced to reduce

their basic rent in order to compensate for the increased

burden on their tenants.

On the other hand, they also have to consider compre-

hensive refurbishment work, which ultimately raises rents

to their market level. Through this process, low-priced

premises become rarer on the market.

Assuming that the turnover for small premises will remain

relatively stable and that several anticipated major trans-

actions will take place, the turnover in office space for

2014 will probably be about 220,000 square metres.

28

29

YOUR CONTACT PARTNERS.

ELLWANGER & GEIGER Real Estate is the ideal partner for marketing your office properties. Our long years of experience and unique range of services enable us to move the market and proactively identify budding trends. For us, having a sixth sense isn’t a supernatural ability but simply part of the service we offer you. Our team in Stuttgart is looking forward to your call or visit. Contact us: Phone: +49 (0)711 2148 300, Fax: +49 (0)711 2148 290 On the Internet: www.ellwanger-geiger.de · www.bueroflaeche-stuttgart.de

Sebastian Degen

Office Letting Consultant

Phone +49 (0)711 2148 166

sebastian.degen@ellwanger-geiger.de

Laura-Teresa Seiler

Commercial Property Assistant

Phone +49 (0)711 2148 297

laurateresa.seiler@ellwanger-geiger.de

Ulrich Nestel

Head of Office Letting and

Retail Stuttgart

Phone +49 (0)711 2148 291

ulrich.nestel@ellwanger-geiger.de

Matthias Hägele

Office Letting Consultant

Phone +49 (0)711 2148 292

matthias.haegele@ellwanger-geiger.de

Helga Schöner

Research and Commercial Property Consultant

Phone +49 (0)711 2148 269

helga.schoener@ellwanger-geiger.de

DISCLAIMER:

Although this study has been prepared

with all due care, we can accept no

liability for the correctness of the

assessments presented.

We are sure that you will understand this.

30

31

30

31

www.germanpropertypartners.de

ELLWANGER & GEIGER REAL ESTATE.

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Systematic research form the basis for

our analyses of locations, portfolios

and cost-effectiveness that reflect mar-

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strategies aimed at capitalising on po-

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In addition to comprehensive leasing

services, our core expertise includes

project consulting and transaction

business. We adopt a holistic approach

in consulting on real estate: we partner

you all the way – from the develop-

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office, retail, industrial and logistics

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We select different investment

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pursuant to the German Invest-

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special funds (SICAV, SIF)

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permit niche investments and indi-

vid ual mandates. We also limit the

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throughout the investment period.

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STARTING IMMEDIATELY: REPRESENTED THROUG HOUT

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OUR OFFICES

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Börsenplatz 1

70174 Stuttgart

Phone +49 (0)711 2148 300

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BANKHAUS ELLWANGER & GEIGER KG

Real Estate

Börsenplatz 1, 70174 Stuttgart

Phone +49 (0)711 2148 300, Fax +49 (0)711 2148 290

www.ellwanger-geiger.de

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