Across Europe, there is an increasing demand for logistics space, resulting in rising rents, healthy returns for investors and extremely low vacancy rates.
Due to Germany’s geographic location and size, along with its impressive infrastructure and access to technology, it has become the most important logistics market in Europe. Cushman & Wakefield have reported that around 25% of Europe’s total logistic turnover is generated in Germany.
The rise of e-commerce has been a major driver for occupier demand with the rapid, ongoing growth of online shopping. German online retail is expected to grow by 9% in 2019 to reach €58.5 bn, and will therefore, remain a key logistics driver.
Logistics and industrial property in Germany changed hands for approximately €6.7bn last year, exceeding the last 5 year average of €5bn. Some large acquisitions include:
The demand for space continues this year with some large deals already underway:
It is clear the demand for space isn’t slowing, making the German market a lucrative location for property investors, developers and managers alike. Large assets in prime locations continue to be sought after, with new concepts coming through pressuring assets to develop to be equipped with the latest technologies, energy-saving facilities and flexible designs.
New technologies have fundamentally changed the sector with automated stock management, IT-based supply chain management and numerous processes quickly becoming optimised to be technologically controlled. This change has resulted in well-networked and automated assets becoming increasingly sought after, which are more commonly better developed in new-build assets. In addition, new-build developments are much more efficient to run in terms of space and energy, making them much more economically viable and a sustainable investment. This shift has made new developments or repositioned assets fantastic investment opportunities.
Across Europe, demand is only continuing – outweighing supply – and the current strength of the logistics and industrial property asset class is quickly rising. New concepts and technologies are increasingly sought after, large assets quickly snapped off the market and there is a growing demand for smaller, inner-city assets to meet local supply-demand – expected to develop further this year.
The market is experiencing a boom. It’s a lucrative and fast-paced sector to be involved with and we’re looking forward to watching it develop further this year. If you’re looking for a move into this sector, check out our latest job opportunities here.