Property Report - European Logistics Market - March 2022

Take-up

Market fundamentals are healthy with low vacancy rates 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.

• European logistics set up a new record volume of transactions boosted by a strong economic upturn.

• Supply is low with vacancy rates down again to 5.0% or less in most European countries. 

• Rents rose by 3.4% in 2021 and are likely to continue to grow, stimulated by inflation, particularly in sectors where the imbalance in demand vs supply is strong.

Investment

The industrial & logistics market is yet again breaking a new record volume of investment gaining market share against other assets. Supported by strong occupier fundamentals, yields are still compressing in most market.

• With over €65 bn invested during 2021 in industrial and logistics, the market set a new record compared to last year.

• Prime yields compressed by 65% on average in Europe in 2021. The prime yield dropped to 3% in the main markets.

• Further yield compression is expected for prime assets reflecting limited stock and strong demand.