Gazeley sees logistics market shake-up

The lack of funding to develop new and existing logistics is forcing developers to cancel projects or pull out of some markets altogether, saysThomas Karmann, SVP of European operations at Logistics firm Gazeley. Speaking on the first day of EXPO REAL in Munich, Karmann said that he had just been approached by a German and a Spanish competitor looking to offload sites that they could not afford to develop.

Gazeley, which in June was acquired by Dubai government-owned Economic Zones World, is having no problems funding its own projects for the time being, Karmann said. ‘We currently have three major projects in Germany, two for logistics company Zufall and one 60,000 m² site for Bosch, all fully financed with equity.’ The firm also has ‘huge’ development in Spain and projects for food retailer Bennet and Lamborghini in Italy.

Karmann said the demand side is still very strong in Germany and Spain for for large scale projects. ‘But the markets for smaller projects in Spain has dried up and every other firm except Prologis has pulled out of the country completely. Karmann said the logistics market could decline further if the credit squeeze continues. ‘Obviously, if this carries on for too long, clients will not be able to finance new projects. Germany is still strong, as is Italy, but if Europe slips into an economic downturn that could change, too. The key right now is to buy very carefully.’