Rents for prime logistics properties in Europe are increasing at an accelerated pace as warehouse vacancy levels fall further amid continued strong occupier demand, new research from CBRE shows.
Prime logistics rents rose 13% on average across the main logistics markets in Europe in the first half of 2022, reaching double digits for the first time, the adviser said. London and Prague saw the largest increases at 49% and 42% respectively, followed by Warsaw and Gothenburg which both recorded an increase of 26%.
At the same time, the average vacancy rate across the 10 countries covered by the research dropped below 2.5% for the first time ever. This, said CBRE, reflected ‘the acute lack of available stock in the market’, which also restrained total levels of take-up in Q2.
Take-up of European logistics space reached 16.7 million m2 across the region in H1, representing an increase of 8% compared to the year-earlier period when a total of 15.5 million m2 was taken up.
The research further revealed that net absorption rates were in line with levels booked during the same period last year at 11.6 million m2. However, new completions are struggling to keep pace despite rising 19% year-on-year in H1 to 10.3 million m2.
Mark Cartlich, senior director of EMEA industrial & logistics said: ‘The further fall in the average vacancy rate in H1 2022 has driven rent increases in the majority of markets. It also partly explains slower take-up during the second quarter, as a number of requirements for space remained unmet due to the lack of availability.’
Joerg Kreindl, head of EMEA occupier industrial & logistics, added: ‘These unprecedented levels of European rental growth create an increasingly challenging environment for the occupier.
‘However, the bullwhip effect, in which large fluctuations in inventory occur as a response to shifts in consumer demand and delayed arrivals of goods, is driving retailers to further grow their logistics footprint. By addressing this now, these occupiers are adapting for further structural change as well as preparing for future disruption.’
CBRE’s logistics research covers the UK, Germany, France, the Netherlands, Spain, Italy, Belgium, Poland, Czech Republic and Slovakia. The firm tracks all warehouses in excess of 100,000 sq ft in the UK and over 5,000 m2 in Continental Europe.
