The Bremen property market is boomingInvesting in Bremen
2018 Bremen Property Market Report – the results at a glance
Bremen is expanding. Several construction projects will reshape the city centre. The 2018 Bremen property market report confirms that the city is an attractive location for investors and developers.
Every year, Bremeninvest works with leading analysts to collate data on the real estate market in Bremen. “The stable to very good trends in all market segments show that Bremen continues to be an extremely attractive investment location,” says Andreas Heyer, CEO at Bremeninvest. Bremen’s high level of construction activity and low vacancy rates compare favourably with other locations in Germany, and this is a good reason to take a closer look at office, logistics and retail properties, and at investment market trends.
This year, the take-up of office space is expected to slip from 99,500m² in the previous year to 87,500m². In 2017, the Überseestadt (New Harbour District) led the field in terms of office space take-up, with the city centre in second place. In 2018, however, the city centre secured the top spot with more than 40 per cent of office space transactions taking place here. The Bremen Technology Park is in second place this year. “Although 2018 got off to a slightly slower start, the planned new developments will boost take-up in the coming quarters,” says Heyer confidently. These include the construction of the Sparkasse headquarters that is due to begin in the fourth quarter.
The vacancy rate remains at 3 per cent, the same low level as last year. Überseestadt has the smallest volume of vacant offices, but more office space is already being planned here and some is nearing completion. Overall, completions increased significantly again this year. Last year, new builds accounted for 9,600m² of completions, and refurbishments for 8,500m². Two major projects have already been completed in the first half of 2018: the 10,500m² Office Center in Überseestadt and the 8,800m² 24’7 twentyfourseven complex in the technology park. If all goes to plan, by the end of the year Bremen will have 3.65 million square metres of office space in total.
Around three million employees work in Germany’s second largest economic sector – logistics. Bremen occupies a key position in this industry thanks to its location on the river Weser, efficient container terminals and five logistics centres. This is also evident in the amount of logistics space in the region, which rose in 2017 and is set to grow further in 2018. In the city of Bremen alone there is now 2,827 million m² of logistics space, “60 per cent of which is particularly attractive for investors – four times as much as the national average,” says Heyer.
There has been a sharp rise in the vacancy rate this year, up from 0.7 per cent in 2017 to 4.8 per cent. This is primarily due to a logistics facility of approximately 70,000m² becoming unoccupied. The take-up in the logistics property market is expected to increase this year from just under 153,000m² (2017) to 187,000m², just under 40 per cent of which will be in the Bremen Cargo Distribution Center (GVZ). The GVZ is one of Europe’s most important logistics hubs and is well connected to the road and rail network, to both inland waterways and international shipping routes, and to air transport. The development of this logistics centre is being driven by the companies that operate there.
Bremen is one of Germany’s most popular cities for shopping, favoured for its good transport links, appealing city centre and numerous tourist attractions. The catchment area has more than one million people as well as a growing number of domestic and foreign tourists. This year, retail sales exceeded €4,012 million for the first time.
“Numerous property projects are being planned in and around the prime locations which will noticeably increase the quality of shopping and life in the city centre,” explains Thorsten Tendahl, team leader of Bremen’s business support and relocations service at Bremeninvest. Private investors are pumping more than €1 billion into the centre of Bremen. Among the projects being planned is one by Christian Jacobs, a member of the Jacobs coffee dynasty, which will involve a new pedestrian walkway between the city centre and the river Weser in the new Balgequartier district. The Carrée centre will undergo thorough modernisation and there is to be a new shopping arcade in the Parkhaus Mitte area.
The volume of transactions rose to €573 million in 2017, a 20 per cent increase on the previous year. Over €320 million was invested in the first six months alone, which is the highest half-year transaction volume ever observed in the market. The majority of investments last year were in office and commercial properties, totalling €236 million. Logistics and industrial properties were in second place, consolidating Bremen’s importance as a logistics hub. “Bremen’s investment market benefits from the capital markets being under pressure to invest,” says Heyer.
While the first half of 2018 did not match the record set in 2017, Bremen still reported a remarkable €190 million in investment. The second half of the year also shows that Bremen continues to be in high demand among investors, with several deals already having been reported or announced. A total of just under €450 million in investments by the end of the year is therefore a realistic prospect.
If you have any questions about the Property Market Report 2018, please contact Thorsten Tendahl, Tel.: +49 (0)421 9600 121, firstname.lastname@example.org.
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