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Property Report - European logistics market - H1 2019

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The European logistics market is slowing down despite strong demand

Following the record volumes achieved in 2017 and 2018, the occupier market slackened in H1 2019 constrained by a shortage of supply in the main European hubs. Yet, demand remains strong. This is adjusting rents, resulting in growth in the best locations.

The investment market is cooling after several years of intense activity leading to the scarcity of products in some markets. Nonetheless, attractive pricing and active occupier markets still inspire investors.

 

Logistics take-up for warehouses over 5,000 sqm in 22 cities: -19% in H1 2019 vs H1 2018.

Despite a slump in take-up, demand is strong and prospects positive overall

Germany and the Netherlands hit a new record volume of transactions, whilst the UK is on hold hanging on the Brexit outcome

Supply remains insufficient to meet end user requirements despite new developments

Rents are on the rise. Prime rents increased by 5.1% over the past 12 months in a panel of 33 cities across Europe.

 

Industrial and Logistics investment in Europe: -16% in H1 2019 vs H1 2018.

Supply is too scarce to meet active demand entirely across all risk profiles

Prime yields compressed further in Europe to bottom at 3.9% in Germany and 4.5% in France and stabilized to 4.5% In the Netherlands and 4% in the UK

Logistics assets remain less expensive than prime offices or prime high street retail.

 

Property Report - European logistics market - H1 2019
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