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European Logistics Market - May 2022

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The logistics market remains strong across Europe

Strong occupier fundamentals

Take-up increased by 15% in Q1 2022 in the six leading European countries. Market fundamentals are healthy with low vacancy rates around 5% in most countries. The lack of new developments combined with the strong activity in the e-commerce sector are the two main factors that contribute to rental growth in prime sectors.

 

An all time high for logistics investment 

The industrial & logistics market is yet again breaking new record volumes of investment (+10% in Q1 2022), representing 23% of total commercial real estate (10% in 2016). Supported by strong occupier fundamentals, yields are still compressing slightly in most markets.

 

Online penetration for retail sales is still low

It accounts for 11% of total retail sales in Europe. There are great differences between countries. Changing shopping habits resulting in increasing online sales is a structural demand driver for warehousing space. As online shopping grows, so does reverse logistics, further space will be needed.

 

The choice of location remains paramount

As retailers are developing omni-channel solutions, the choice of location for last mile solutions along with regional solutions will prevail. The challenge will be land availability.

 

Large disparities in labour costs across Europe

Labour availability and cost are strategic in occupier decisions on where to locate, and also for developers assessing the cost and time within which they can deliver buildings. 
 

European Logistics Market May 2022
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