Logistics development has returned to the levels last seen during the 2007-2008 boom years, with the total floor space under development reaching 7 million m2 by end-June, according to Jones Lang LaSalle.
Logistics development has returned to the levels last seen during the 2007-2008 boom years, with the total floor space under development reaching 7 million m2 by end-June, according to Jones Lang LaSalle.
Around 2.1 million m2 of new developments have entered construction over the second quarter of this year, up 35% on the year-earlier period.
Construction activity continues, however, to be driven by pre-let activity. 'Developers remain risk-sensitive and although we see further significant occupier demand in the remainder of the year, we do not anticipate a strong return in speculative development,' said Alexandra Tornow, associate director of EMEA Logistics & Industrial Research at JLL.
Speculative developments are likely to remain restricted and limited to select markets such as Germany and the UK, she added.
At 3.6 million m2, logistics take-up is up 23% on the previous quarter and 18% on Q2 2012, reflecting renewed occupier confidence. Occupier activity was driven by a number of large-scale transactions as supply chains respond to new customer and manufacturing patterns - with retail companies increasingly moving to multi-channel distribution models.
The UK recorded the strongest growth over the quarter (up almost three-fold) to 660,000 m2 amid strong economic recovery and continued high demand from retail companies. Elsewhere, take-up more than doubled in France, Poland and Russia over the quarter although half year figures in France and Russia were down on H1 2012.
Take-up in Germany, Europe’s logistics powerhouse, reached 1.1 million m2 in Q2, one third of the European total, albeit marking a modest 7% decline over the quarter. Nevertheless, half year volumes at nearly 2.4 million m2 continued to increase, up 9% year-on-year.
