European Industrial & Logistics
Logistics Market Fundamentals
Q42016
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European logistics take-up hits a new record high in 2016
Low vacancy levels and strong occupier demand drive further development, but most of this is build to suit (BTS)
European prime rental growth remains very modest in aggregate in part because yield compression has enabled competitive rental terms on BTS space.
YoY on 5-year average
YoY in CEE YoY in Southern Europe
YoY in Western Europe
12% 28%
35%
Third Party Logistics36%
Other7%
E-Commerce12%
Manufacturing17%
3%10%
3PLs were the most active occupier group in 2016 – but space directly dedicated to e-fulfilment rose strongest
Strongest growing occupier groups in 2016
Guy GueirardHead of EMEA Industrial & [email protected]
Jon SleemanHead of EMEA Industrial & Logistics [email protected]
Alexandra TornowEMEA Industrial & Logistics Research [email protected]
Ryan LoftusEMEA Industrial & Logistics [email protected]
For more information, contact:
France, Spain and Russia registered lower take-up in 2016 compared with 2015, but all other countries posted an increase in take-up. All countries, except Russia, recorded higher take-up in 2016 compared with their respective 5-year average levels.
40%YoY in UK
16%YoY in Russia
Take-up e-commerce driven YoY
3PL providers / express companies
48% 18%
Immediately available space across the majority of European markets remains below total annual occupier demand (based on 5-year average take-up)
For the first time in the current cycle, new completions and space under construction exceed the previous peak. However, market conditions remain very different, as the majority of new space now is build-to-suit whereas previously it was speculative.
<6%New completions in 2016
Warehouse space under construction at end 2016
European aggregate vacancy rate at end
2016 YoY
of current space under construction is speculative (20% if excluding Russia)
on 5-year annual average
25%
QoQ
10%
YoY
27%
on 5-year average
74% 25%
60%
0.3% 1.4%Q4 warehousing rents
QoQ excl. RussiaYoY excl. Russia
Retail Companies28%
The importance of e-commerce as a demand driver is greater than our figures suggest because of knock-on effects on demand from logistics and express operators. That said, occupier demand remains broadly-based driven by business growth and ongoing pressures to restructure physical distribution networks to reduce costs and make supply chains more efficient.
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