Leading industrial and logistics operator Prologis has announced that it ended 2016 with 96.7% occupancy in Europe, after signing new leases and renewals totalling 718,000 m2 in the fourth quarter of the year. The total tenancy deals inked in Europe during 2016 reached 3.5 mln m2, an increase in volume of 54% compared to 2015.
'2016 was our strongest year yet for leasing, which contributed to our highest-ever occupancy in Europe,' commented Ben Bannatyne (pictured), president, Prologis Europe. 'In spite of political shocks, customers remain focused on the long term and sentiment remains positive. This has fuelled broad-based demand, led by the general retail and automotive sectors.'
At quarter-end, the company owned or had investments in properties and development projects amounting to 17.0 mln m2 in Europe.
'With strong operating fundamentals and increasingly attractive yields, we anticipate another period of strong growth in the year ahead,' Bannatyne added.
Markets with the strongest interest from customers in the fourth quarter were the UK, Germany and the Netherlands in Northern Europe, and Lyon, Le Havre, Barcelona and Valencia in Southern Europe. In CEE, Prague, Budapest and Bratislava proved the most active markets.
Prologis said that the supply of Class-A distribution facilities was still low across Europe. In the last three months of 2016, it commenced work on 13 developments in the Czech Republic, Germany, France, Hungary, Italy, Poland, Slovakia, Spain and the UK totalling 309,000 m2, 65% of which was build-to-suit and 35% of which was speculative. These include a 56,000 m2 build-to-suit shed for Tesco near Bratislava in Slovakia, and a purpose built 24,000 m2 property for Action at Moissy II, France.
In 2016, Prologis acquired €70 mln of buildings totalling 121,500 m2 and 18 land plots totalling 1.3 million m2 across Europe. These acquisitions were in line with Prologis‘ strategy of investing carefully in global markets. During the year, Prologis sold portfolios in the Netherlands, UK, France, Germany, Italy and Sweden for a total of €259 mln.
'Logistics remains a resilient and attractive asset class that benefits from high demand, low vacancy and increasing rental growth across Europe,' concluded Joseph Ghazal, chief investment officer, Prologis Europe. 'Speculative development remains disciplined, with big box build-to-suits characterizing the market’s total development activity through 2016.'
