Savills: Spanish logistics demand leads to new submarkets

Strong demand for logistics space has led to the creation of new submarkets in Spain, according to a new research report by property adviser Savills. The logistics sector has experienced 3.9% growth per annum nationwide, while the logistics businesses in Madrid and Barcelona have grown by 4.1% and 4.2% respectively. As a result, the areas of Guadalajara and Toledo have now been incorporated into the Madrid logistics market. And about 35% of the Barcelona market is located more than 40 km away from the city in Zaragoza and Valencia.

Although demand has always been stronger for well-connected locations in the 'ring areas' around Barcelona and Madrid, many new warehouses and distribution centres are now located in neighbouring provinces due to a combination of a lack of available land, complex ownership structures, planning restrictions and high land and rental values around the core cities. The growth in Spain's logistics sector is largely attributed to higher levels of demand for the transport and communications sectors, with 2007 output increasing by 5.2%.

State-owned companies such as Apregio and Cimalsa are involved in some of the most ambitious projects in Madrid and Catalonia regions, with more developments planned for the future. Cimalsa has four centres that are currently operational, with a further two under construction including Logis Emporda, outside Barcelona, which will be over 170,000 m².

'Investors, in particular foreign have been involved in forward funding deals, as well as some sale and leaseback opportunities. Logistics property is in high demand, with good rental potential, and yields have dropped significantly over recent years,' said Eri Mitsostergiou of Savills European Research.