Around 400,000 m[sup]2[/sup] of new logistics space will be delivered in Sweden by the end of 2012, up from 350,000 m[sup]2[/sup] in 2011, according to new research published by Savills.
Around 400,000 m2 of new logistics space will be delivered in Sweden by the end of 2012, up from 350,000 m2 in 2011, according to new research published by Savills.
The property adviser expects the trend to continue as there are a number of larger projects (over 100,000 m2) scheduled for completion in 2013. According to Savills, the rise in activity is a result of a combination of an undersupplied market and an increase in demand with occupiers preferring new, purpose-built facilities.
Tenants looking for expansion are mainly larger retail companies that want to consolidate their smaller warehouses into one location along with third-party logistics companies, Savills said.
In terms of locations, developers are increasingly building outside the main larger cities where land and labour costs are lower. This has resulted in peripheral industrial parks and strategic locations between larger cities such as Jönköping, Örebro and Linköping/Norrköping becoming logistics hubs.
Interest in the logistics sector also remains strong on the investment side. The sector's share of the investment market increased from 5.3% in 2009 to 8.1% in 2011. Yields for prime logistics properties currently stand at approximately 6.5%, while secondary property yields reach between 7% and 8%.
