The completion figures for logistics properties are rising again, and at least in established locations, occupier and investment demand is also stable. The tenth joint study “Logistics and Real Estate” with BREMER, GARBE and Savills analyses the market and shows current developments.
After years of extraordinary growth and record figures, the logistics real estate market is now entering a phase of stabilisation. The fact that stability does not mean stagnation becomes clear when you look at the challenges that are moving the industry.
Three examples: For example, the requirements for construction alone have become much more complex and require a high level of technical expertise. The rental market is particularly challenging in regions that have built up a lot of capacity. And in the investment market, which has not slumped as much compared to other asset classes, the old momentum has not yet returned. Nevertheless, a positive conclusion can be drawn for the logistics real estate sector as a whole, based on the optimism of the players and the continued resilience of the sector.
Even though the overall economic situation remains tense, key interest rate cuts, lower energy prices and declining inflation are fuelling hopes for economic recovery.
Here are some key results of the short study, for which data from more than 3,000 logistics properties under construction and planned as well as existing properties were evaluated:
- The weakening economy is causing many companies to postpone investment decisions. This is also reflected in the declining demand for logistics real estate in some places: where the supply of space is still very scarce, there are no vacancies. On the other hand, there are signs of overcapacity in individual regional markets because a lot of construction has been done there in recent years.
- As in previous years, the market environment for project developments is generally difficult and characterized by uncertainties regarding the macroeconomic outlook. Overall, the German logistics real estate market is currently very differentiated, but quite stable: everything currently indicates that more than 5 million square metres of logistics space will be completed in 2024 (2023: 4.8 million sqm) and that the completion volume is likely to level off at this high level in the coming year as well.
- Nevertheless, the reluctance of investors is still noticeable in the logistics real estate segment. The investment volume of EUR 2.7 billion for industrial and logistics properties in the first half of 2024 once again points to a comparatively weak investment year, although logistics properties accounted for the highest volume of all commercial asset classes in the first half of the year.
- In the ranking , Panattoni, GARBE and VGP have remained the strongest players among project developers in the long term since 2018. With almost 2 million square meters completed since 2019, Panattoni continues to lead the ranking. However, with the completion volume of 477,000 square meters this year, GARBE is catching up and comes to a total of 1.7 million square meters.
Note: You can download the entire study free of charge from the website https://logistik-und-immobilien.de/ .
Contact: Felix Werner, Team Leader, werner@bulwiengesa.de and Daniel Sopka, Consultant in the field of logistics and corporate real estate, sopka@bulwiengesa.de
