Logistics Real Estate Markets in Europe Not Impacted by Covid-19: 14% Growth Forecasted for 2021

European logistics real estate markets have not suffered last year from the Covid-19 pandemic. Due to fast growing e-commerce and higher inventory levels of producers the total expected take-up in 11 European countries of 23.6 mln sqm for 2020 is only 3% down compared with record year 2019. In major markets like Germany and the UK last year’s figures were certainly not bad.

The forecasts for this year are even better with an expected take-up of 27 mln sqm – an increase of 14%. Particularly large logistics real estate markets like Germany, France, the Netherlands and Poland are expected to grow substantially.

Rents are expected to be stable or to show a limited increase. Yields are falling, but Central and Eastern Europe still have very attractive yields.

Logistics real estate is a strong asset class, which has proven to be corona proof.

That concludes European leading, independent real estate consultancy firm Buck Consultants International, based on a survey amongst Europe’s most important logistics real estate developers and investors.

Expected take-up volumes in 2020 and 2021

Source: Buck Consultants International, 2021

Expected Prime Net Yields 2021 versus 2020

Source: Buck Consultants International, 2021

Mega distribution centers

Compared with 2020, the expectations for the establishment of new mega distribution centers in Europe in 2021 are very positive. More than half of the experts interviewed (70%) believes that the establishment of new mega distribution centers will show (strong) growth; 30% of the respondents expect that the establishment of new mega distribution centers will be more or less stable in 2021. Favorite countries for the establishment of new mega distribution centers are Germany, the Netherlands and Poland. Across Europe, real estate developers and investors fear the lack of land.

City distribution centers

The expectations for 2021 compared with 2020 for the establishment of new city distribution centers in Europe are very positive. Nobody expects a decrease, 80% of the leading logistics real estate developers and investors expect a growth of 10 to 25% for the establishment of city distribution centers, while 20% even expect a strong growth of more than 25%. London and Paris are by far favorite.

View our webinar The Future of the Logistics Real Estate Markets in Europe. During this webinar BCI presents the results of the survey and discusses them with three industrial leaders. Download the presentation below.