Logistics take-up hits new record in 2011: JLL

European logistics markets achieved a new take-up record in 2011 despite rising economic uncertainty, according to a report by Jones Lang LaSalle. Overall take-up amounted to 16.3 million m2, 59% ahead of the 10-year annual average.

Stronger activity year-on-year was seen in most markets, including those countries where economic growth remained squeezed or even contracted in the latter part of the year.

The healthiest increase in take-up was seen in Belgium (+121%, although growth came from subdued levels), France (+52%) and Hungary (+52%). Substantial growth was also evident in the Netherlands (+20%), Poland (+28%) and Italy (+26%).

In contrast, take-up declined in the Czech Republic (-47%), Russia (-14%), Spain (-5%) and the UK (-47%) - in part driven by limited available modern supply in the most sought-after locations, underplaying existing occupier requirements.

'Continued strong occupier demand was driven by network optimisation and outsourcing, as well as robust demand originating from e-commerce and considerable domestic demand in emerging markets both in Central and Eastern Europe and Asia,' comments Alexandra Tornow, Jones Lang LaSalle EMEA Industrial and Logistics Research.

Germany saw the strongest activity (31% of the European total) and for the first time exceeded the five million m² mark in 2011. Accelerating activity in France over H2 2011 meant that almost 1.9 million m² was taken in the full year, the second-highest volume across Europe. In contrast, with 1.2 million m2, the UK dropped out of the 'top 3' last year. Activity was held back by bleak economic growth prospects and a significant reduction in supply of available modern distribution buildings.

Buoyant occupier activity helped Poland and Russia climb the ranking of square metres taken in 2011, respectively recording 1.7 million and 1.6 million m². Take-up levels increased due to the regions’ maturing distribution market with ongoing network optimisation and outsourcing, and strong domestic demand driven by robust economic growth across the CEE and Russia.

This trend is expected to keep activity on healthy levels over the medium-term, JLL said.