SPAIN - Spanish logistics markets are expanding as urban sectoral growth continues at above the national average, according to a Savills report on the country's warehousing market.

Compared with growth of 3.9% nationally, Madrid is seeing logistics growth of4.1% while Barcelona is seeing 4.2% expansion in areas with strong transport connections. The result of this growth has been for the two cities to ‘claim' neighbouring provinces - Guadalajara and Toledo for Madrid, Zaragoza and Valencia for Barcelona, according to Savills.

Expansion "will take the pressure off. Reasonable pricing is better for occupiers and developers because it will ease congestion in Madrid," said Eri Mitsostergiou, associate director of commercial research at Savills.

Additional factors driving their expansion include planning restrictions and high land and rental values around the core cities. Asked whether complex ownership structures would stifle international investor interest in the market, Mitsostergiou said rental potential had attracted cross-border investment, together with an outward yield shift at the end of last year caused by tighter lending conditions.

The complexity of the market has caused "difficulties and delays in the mobilisation of the market", she said, "but investors will find products that are not exposed to those factors. They'll be resolved before they reach the market".

She said the expansion would influence targets for potential investors. The new markets would affect prices and rents, as increased demand would boost values. 

Transport and communications is driving Spanish logistics growth, as it saw 5.2% output growth last year. However, Mitsostergiou acknowledged the continued pace of growth would depend on broader economic factors.

"There's a whole chain of interrelated factors but of course it's related to the economy," she said.

"Consumer spending is slowing down. There has been some impact on retailers but there's still generally some uncertainty over the extent of it. We expect slower growth - but it will still be healthy."

In a separate development, Harbert European Real Estate Fund II and Promociona Hispania last week set up an investment platform for Spanish logistics and industrial, in a joint venture worth €150—€200m.

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