The European logistics real estate markets suffer from the impacts of Covid-19. In 9 important logistics real estate markets the take up in 2020 will be 32% less compared with 2019 if business returns to ‘normal’ as of October 1st. If the business circumstances are back to normal only as of January 1st, 2021 the total new take up will decrease with 46% compared with last year.

These are some of the conclusions in a research study released today by Europe’s leading independent real estate consulting firm Buck Consultants International/BCI Global (BCI). BCI surveyed the most important logistics real estate developers, investors, brokers and experts with a focus on 9 markets: Germany, France, United Kingdom, Poland, The Netherlands, Belgium, Italy, Spain and the Czech Republic.

Download now the BCI presentation on European Logistics Real Estate Markets.

Forecasts

These 9 markets together had a take up of 23.5 million sqm in 2019. At the beginning of the year the respondents expected for 2020 about the same take-up volume as in 2019 (23.4 million sqm). But a decrease down to 15.9 million sqm (- 32%) is expected and in an even worse situation take up will only be half of 2019 (12.8 sqm = - 46%).

Estimate of the total take-up volume in Europe in 2020 (mln sqm)

BCI Global forecastsSource: BCI 

Differences per country

As the figures below show the logistics heart of Europe (Germany, Netherlands, Belgium) is expected to do better than other markets, while Spain, Italy and the Czech Republic will probably suffer the most.

Summary European Logistics Real Estate Markets

Summary European Logistics Real Estate Markets

Source: BCI 

Other conclusions:

  • Prime rents in 22 logistics regions in Europe are expected to be relatively stable this year, with no upward potential.
  • Yields for prime warehouses increase slightly with an average 15 basis points.
  • Interest of Asian and US investors in logistics real estate is expected to continue.
  • The establishment of new mega distribution centers (more than 40,000 sqm) will continue, probably at a slightly lower pace, with The Netherlands, Germany and Poland as favourite markets.
  • The growth of new city distribution center initiatives will accelerate all over Europe.

Comments

“Our study shows that logistics real estate is a robust asset class and relatively Covid-19 proof. It is obvious that there are differences between the nine countries and submarkets in these countries”, says René Buck, CEO of BCI. “The accelerated growth of e-commerce, higher inventory levels in order to create more risk resilient supply chains and potentially reshoring of assembling activities will drive the demand for logistics real estate”.

Download now the BCI presentation on European Logistics Real Estate Markets.

 

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