OFFICE REAL ESTATE MARKET
Selected office projects
Anna
Aurelis has built the 5,100 sqm "Anna" office building on the site of the former Südgüterbahnhof in Hanover's Südstadt district by the end of 2021. The users are KPMG AG (4,000 sqm), a daycare center (550 sqm) and Kieser Training (550 sqm). The completion of the office building concludes the overall development of the area at the Südbahnhof in Hanover. In recent years, space has already been sold to small businesses, a retail park has been built and a residential building with 142 residential units and around 2,000 square meters of office space has been constructed. In addition, the associated traffic development was created with the realization of Anna-Zammert-Straße.
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Archive/depot and office building for the culture and school departments
A new archive/depot and office building for the culture and school departments is being built on Vahrenwalder Straße - the Hanover City Archive will move in and other magazines and depots of Hanover's museums will be brought together in one location. The contract for the new building was awarded to the Hanover-based project developer bauwo. The largest municipal archive in Lower Saxony will be built in the north of Hanover by September 2023.
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BOB.Hannover Fischerhof
BOB.Hannover Fischerhof is the name of the office quarter that is being built on the site of the former Kaiserbrauerei directly at the Fischerhof S-Bahn station following the demolition of the Kaisercenter. Based on a design by Hanover-based architects agsta Architekten Dr. Schulte, Petersen & Partner, Aachen-based BOB AG is developing a property with a special focus on sustainability and climate protection in two construction phases in clinker brick architecture with around 23,000 m2 of rental space.
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Office project V 253
The new V 253 office building with approx. 12,000 sqm of rental space is to be built between Kabelkamp and the historic water tower. The planned building will be an essential part of the realignment of the area north of the Mittelland Canal and will be an effective counterpart to the existing office buildings on Vahrenwalder Strasse.
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Continental Headquarters
Construction of Continental AG's new corporate headquarters on Hans-Böckler-Allee in Hanover began in 2018. The new headquarters are expected to be completed in 2023.
The total of eight interconnected buildings will provide space for 1,250 employees in the first expansion phase. A later expansion to 1,600 workstations is possible.
One of the defining elements is a column-free bridge with a span of 71 meters. It connects the northern and southern campuses across Hans-Böckler-Allee.
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City Gate North (2nd BA)
Hannover Region Grundstücksgesellschaften and Delta Bau AG from Hanover have built another office and administration building on the remaining approx. 5,000 m² of the 14,000 m² site known as City Gate Nord. The six-storey, DGNB Gold-certified building with a total usable area of around 11,000 m² was completed in the second quarter of 2022 and handed over to the tenants ExxonMobil Production Deutschland GmbH, BKK Mobil Oil and BEB Erdgas und Erdöl GmbH & Co.
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H₃ö
"Hanover's most sustainable office quarter" - this is what STRABAG calls its flagship project H3öin Groß-Buchholz. Around 25,000 office spaces are planned on the campus by 2023/24 in three building complexes, whose technical centerpiece is, among other things, an innovative and climate-neutral heating and cooling technology with an ice storage system. The three buildings implement different concepts: with a monolithic brick construction, as a timber hybrid building or with a variety of green façades.
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Hy_live
Its iconic architecture made the Dutch pavilion a landmark of EXPO 2000. In future, the various levels will offer space for a new, innovative way of working. The renowned architecture firm MVRDV from Rotterdam, which originally realized the Dutch pavilion, has been commissioned with the planning. Around the pavilion, around 380 micro-apartments will be created in the HY_live Loop, supplemented by additional workspaces.
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Joachim's Carrée
The office and commercial building in Joachimstrasse (22,255 sqm total area) was originally built by the Bundesbahn in 1969 and was used by Deutsche Bahn until recently. Getec Immobiliengruppe has completely refurbished the building complex next to the main railway station until summer 2021. The main tenant is now the Youth and Family Department of the City of Hanover. Retail space has been created on the first floor facing Joachimstrasse and Thielenplatz.
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Swiss Life Career Campus
In June 2020, the insurance and financial advisory company Swiss Life Germany began construction of the "Career Campus Hannover" seminar and conference center at the company's site in Hannover-Lahe. Swiss Life invested around 30 million euros in the construction of the Career Campus Hannover, which was completed in August 2022. The building comprises more than 30 training and conference rooms as well as an event hall measuring over 650 square meters and meets the gold certification criteria of the German Sustainable Building Council (DGNB), is barrier-free and offers charging facilities for electric cars and bicycles. One floor of the new building also offers space for around 100 new workplaces for the approximately 900 Swiss Life employees at the Hanover location. The premises are designed in a modern co-working style.
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Gatehouse Expo Park
Delta HRG (a joint venture between Delta Bau AG and Hannover Region Grundstücksgesellschaft mbH) is constructing a new office and administration building, the Torhaus Expo Park, near Expo Plaza. The five-storey building, which was planned by architects BKSP, has a floor space of approx. 9,500 square meters. The office building is scheduled for completion in the second quarter of 2022, with Cochlear Deutschland GmbH as the main tenant.
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Volkswagen Academy
From 2024, Volkswagen Commercial Vehicles (VWN) plans to bundle all training activities in a new building, the Volkswagen Academy, in the Marienwerder Science Park. Laboratories, workshop areas, offices and training rooms are planned for an area of more than 8,000 square meters.
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Office space take-up at the end of 2022 was around 165,000 sqm. In the last five years (2018 to 2022), around 280,000 sqm of new office space has been built and a further 80,000 sqm has been completely refurbished. The project development list is very well filled: A further 330,000 sqm is expected to be added by 2025 (of which around 80,000 sqm will be refurbished).
MARKET SENTIMENT AND TRENDS
The crisis-ridden environment initially slowed down the investment decisions of players on both the supply and demand side in 2022, particularly in the first half of the year. However, sales then picked up more dynamically than expected in the second half of the year, presumably driven by catch-up effects from the weak previous years and the expectation of even higher prices in the coming months.
Annual balance of the office real estate market with a clear plus
Against this backdrop, the annual balance sheet for the office real estate market for 2022 shows a significant increase compared to 2021. Office space take-up at the end of 2022 was around 165,000 square meters - an increase of around 22% (plus 30,000 square meters). Take-up of space is therefore back to the five-year average (2018 to 2022), following on from the strong years of 2018 and 2019.
Vacancy rate falls, prime rents rise
After a strong increase (from 3.3% to 4% in 2021), the vacancy rate will fall slightly to 3.9% in the city of Hannover in 2022. Demand is primarily for high-quality space in integrated locations and project developments, which are particularly suitable for companies with a high proportion of research and development in the technology sector due to their location. This is also reflected in the prime rents . By the end of 2022, the value will rise to EUR 18.80 per sqm in the city center - an increase of 80 cents.
Jump in average rents by € 2 per sqm
Prime rents have developed very positively across all locations in recent years. In the first half of 2022, however, they came under slight pressure on the outskirts of the city and on the arterial roads , but stabilized at a higher level at the end of the year and now stand at EUR 16.50 per sqm (up 50 cents). A jump in average rents is particularly noteworthy - average rents rose by around €2 per sqm both in the city center and on the outskirts and arterial roads.
Investors remain interested but cautious
Long-term rented properties in sought-after locations are generally very popular with investors. Prime yields remained at a low 3.8% at the beginning of the fourth quarter.
In the office market, however, fewer transactions tended to be recorded last year; the annual balance sheet is still pending. Investors are very interested, but remain cautious. In addition, many of the projects currently being completed have already been sold.
A small number of ongoing and newly initiated sales processes will probably mean that the transaction volume will remain comparatively low at the end of 2022 and prime yields may rise slightly.
Around 330,000 sqm of new office space by 2025
In view of the unexpectedly good comeback and the very well-filled project development pipeline, market players are spreading pragmatic optimism. This is well founded: Office space with a total volume of around 330,000 sqm is expected to be completed by the end of 2025.
As the number of office employees in Hannover is expected to continue to rise slightly over the next few years, the volume of office lettings and project development should stabilize again overall. However, the development of the office real estate market is closely linked to the overall economic development in the Hannover Region and in Germany. It is clear that the real estate market and the economy as a whole remain in a challenging situation.