Take up of logistics property in Europe is on track to set new records for the year, according to a study by Cushman & Wakefield.
European logistics and industrial take-up reached 10.8 million square metres in the first nine months of 2015, a 13 per cent increase compared to the same period a year ago, C&W’s latest Property Times European Logistics market report shows.
German lettings accounted for more than half of letting activity, although the Volkswagen scandal could hit future demand from the automotive sector. Poland (2.8 million sq m), a priority market for e-retailers thanks to relatively low operating costs and improving infrastructures, has overtaken France to become the second most active market.
€14.3bn was invested in industrial property across Europe over the same period, with almost half concentrated in the UK.
Magali Marton, Director, EMEA Research, said: “In most European countries, and especially in the UK, letting activity is dampened by a lack of supply. Demand is strong, marked by the surge of e-commerce. Retailers as well as industrial companies are completely reshaping their supply chain in favour of built-to-suit solutions in a market where there is a clear mismatch between demand and supply.”
And Rob Hall, senior director and co-chair EMEA logistics, said: “Prime rents in Europe are expected to grow at an average rate of 1.6 per cent per annum up to 2020, over performing the growth expected in offices and retail over the same period. Dublin is forecast to improve the most, with expected annual rental growth of 5.3 per cent up to 2020. Having been resilient even during the crisis, rents should remain quite strong in the UK, especially in regional markets such as Birmingham and Leeds.”