HIH Real Estate (HIH) can look back on a successful letting year in 2023. With a letting performance of over 380,000 square metres, HIH was able to build on the previous year’s good level in 2022 despite the challenging market environment and maintain the occupancy rate in the overall portfolio at over 95 percent. New leases were concluded for around 87,000 square metres, which is a share of 23 percent. The remaining 77 per cent are renewals of existing contracts. 288,000 square metres, or around 76 percent, were let in Germany, 127,000 square metres of which were let in the top 7 cities alone. 35,100 square metres were let in Poland and 15,300 square metres in the UK. The remainder is accounted for by other European countries. The majority of leases were for office space (186,000 square metres). Logistics space follows in second place (106,200 square metres) and retail space in third place (45,300 square metres).
Frank Kindermann, Head of Asset Management at HIH Real Estate, comments: “2023 was a very successful year for us despite the difficult market conditions. Letting management is currently very important to ensure a stable cash flow from the properties. In asset management, our top priority is to increase the attractiveness of the properties we manage for tenants and to secure property values for investors. The high number of renewals shows that we are successful with our focus on a constant partnership and solution-orientated exchange. The tenants are very satisfied with our work and feel comfortable in the properties we manage.”
The largest new letting is a retail space of 5,711 square metres in Liverpool in the UK, which was let to the discount department stores’ chain TJ Hughes. The two largest new lettings in Germany are office space: The city of Stuttgart took a long-term lease of over 5,300 square metres at Löwentorbogen 11 in Stuttgart for its vehicle registration and driving licence office. In Nuremberg, the publishing house Nürnberger Presse Druckhaus was acquired as a new tenant for the CUBE property at Kressengartenstrasse 4. The publishing house will move into over 4,800 square metres of office space there in autumn 2024.
The largest lease extension was concluded in Malsch in the district of Karlsruhe in Baden-Württemberg, where a major car manufacturer extended its lease for 44,372 square metres of logistics space. The second largest lease extension relates to office space: The rental agreement with NTT DATA, trusted global innovator of business and IT solutions, for almost 11,000 square metres of office space in Nu Office 2 in Munich was extended on a long-term basis.
The largest foreign letting was in Wroclaw, Poland: The Polish subsidiary of an international market leader in auditing and management consultancy extended its lease for the 10,975 square metres of office space in Sagittarius Business House, a BREEAM Excellent certified office building in the city centre with a modern flex office design.
“The letting market for space over 1,000 square metres is currently challenging. Nevertheless, we have succeeded in concluding leases for large spaces and attracting new tenants, particularly in the office segment,” adds Carolin Brandt, Deputy Head of Asset Management. “We are noticing a significant decline in large-scale searches almost everywhere in Germany. Companies are acting more cautiously in the current economic situation and shying away from higher investments. Moving to a new location or expanding existing space is currently out of the question for many. The lack of office space is being addressed with more flexible home office solutions rather than by renting new space.”
HIH Real Estate plans to further expand its letting services for third parties in 2024, particularly for institutional investors, family offices and insolvency administrators. The HIH Group’s growth trajectory is also reflected in its personnel. The number of employees in asset management at HIH Real Estate rose to 130 as of 31 January 2024 (previous year: 120).
