INDUSTRIAL & LOGISTICS HUBS - Colliers International
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INDUSTRIAL EMEA & LOGISTICS HUBS QUARTER 2 | 2018
2 3
Q2 | EMEA
Research & Forecast Report | Colliers International
Research & Forecast Report | Colliers International
Quarter | Region
EXECUTIVE SUMMARY
• Economic and real estate indicators construction (570,000 sq m) KEY METRICS IN MAJOR EMEA CITIES: H1 2018
for industrial and logistics real estate represented 28% of total modern
markets remain positive, but the general stock in H1 2018. The pipeline was PRIME RENT PRIME RENT
CITY WAREHOUSE RENT LOGISTICS & DISTRIBUTION VACANCY TAKE-UP
outlook across EMEA is uncertain. slightly above the 5-year average
6M
Protectionism fears are high on the take-up level, but against a backdrop €/SQ.M/ 6M 12M €/SQ.M/ 6M 12M CHANGE 12M Y-O-Y
agenda, and while Donald Trump and of extremely low vacancy of 0.79%. CITY MONTH CHANGE OUTLOOK MONTH CHANGE OUTLOOK [%] [BPS] OUTLOOK [SQ M] CHANGE
Jean-Claude Juncker agreed to hold • In other major markets such as Barcelona 4.50 5.9% 6.75 0.0% 2.76 -44 223 4.5%
off on imposing tariffs in July, a history Stockholm, Berlin and Munich, pipelines
of unpredictability means there is no remain very low, at sub 100,000 sq m. Birmingham
room for complacency. The latest 7.34 7.4% 6.58 0.0% 3.60 20 415 -36.2%
Munich and Berlin are in much need of (West Midlands)*
industrial PMI readings depict a trend of speculative development, but there are
declining confidence - for the eurozone a number of obstacles to planning, not Bucharest 4.10 0.0% 4.10 0.0% 2.00 0 64 -56.5%
as a whole, and the major economies least from municipalities. In Munich,
within. All key European economies are for instance, municipal authorities are Budapest 5.00 0.0% 3.90 2.6% 3.50 -50 164 -42.5%
reporting declines in their index levels reluctant to give planning permission
relative to 12 months ago. for industrial developments, because Frankfurt 6.95 0.0% 6.40 0.0% 3.10 30 330 2.3%
• Despite these potential challenges, they are associated with an increase in
demand for industrial and logistics traffic, noise and pollution.
Hamburg 6.50 0.0% 6.00 3.4% n/a n/a 248 10.2%
space enjoyed an expansive H1 2018 • The scarcity of industrial sites and
resulting in a significant rise in gross planning constraints is pushing
take-up. Over 50% of markets surveyed Istanbul 4.72 -4.3% 4.72 -4.3% 14.00 -200 65 -58.6%
developers/investors into more
reported an expansion in demand creative development solutions. In
London
compared with only 35% during some cases, outdated office parks 13.67 8.0% 12.10 3.9% 3.40 -10 237 39.6%
(Greater London)*
H2 2017. Equally, the percentage of are being transformed into modern
markets witnessing a decrease in take- logistics and business parks. The Madrid 4.25 6.3% 5.50 0.0% 3.60 -61 222 -12.1%
up fell from 54% to 46%. redevelopment of Port Park Pernis in
• Demand growth could have been higher Rotterdam will be the new headquarters Moscow 4.16 -10.5% 4.16 -10.5% 7.40 -53 563 12.2%
but for a lack of quality, modern space. and distribution centre of Neele-
Vacancy rates remained very low in Vat Logistics, in premises spanning
Munich 9.30 9.4% 7.00 2.2% 1.87 -15 85 -35.7%
H1 2018, with the vacancy average 45,000 sq m. In Barcelona, where
across markets surveyed at 5.7%. supply has been a major constraint on
Vacancy rates below 3% were reported growth, Segro is redeveloping the old Paris 7.50 0.0% 4.58 0.0% n/a n/a n/a n/a
in a range of locations including Bacardi rum factory in Mollet del Vallès
Lodz, Belfast, Munich, Bucharest, (Barcelona), to convert into 40,000 Prague 4.50 5.9% 4.00 0.0% 2.69 -12 408 71.6%
Copenhagen, Vilnius, Riga, Prague, sq m of logistics space. Additionally,
Barcelona and Milton Keynes. developers are turning to brownfield Rotterdam 6.25 7.1% 5.83 7.7% n/a n/a 165 154.3%
• Construction pipelines remain locations. In Cologne, Alcaro Invest is
restricted, although conditions slightly building a 26,000 sq m logistics centre
Stockholm 9.97 0.0% 8.37 5.0% 6.50 0 n/a n/a
improved relative to end of 2017. on a brownfield site in Kerpen, and
Some 52% of markets reported an refurbishing over 15,000 sq m of office
and warehouse space in Frechen. Venlo 4.58 10.0% 4.17 11.1% n/a n/a 145 -9.4%
increase in their pipelines in H1 2018
compared with 51% in H2 2017, but the • Markets reporting landlord-favourable
percentage of markets registering falls conditions expanded to a 41% coverage Warsaw 5.00 0.0% 4.00 0.0% 7.21 116 413 1.8%
in their development pipelines reduced during H1 2018, although an equal
from 40% to 32%. number of markets reported neutral *UK industrial data relate to the region
• There are big discrepancies across occupier conditions. Prime rents in
Sources: : Colliers International
Europe. In Poland, the vast majority both the logistics and distribution and
of newly delivered supply in H1 city warehouse segments remained
2018 originated in the inner region stable or grew in most of the EMEA
of Lodz, where space under active cities monitored.4 5
FIGURE 1: CURRENT 12M 12M
Q2 | EMEA
Research & Forecast Report | Colliers International
Research & Forecast Report | Colliers International
EMEA | Q2
(07-2018) LOWEST HIGHEST
INDUSTRIAL PMI
MACROECONOMIC OVERVIEW
70
MANUFACTURING
SURVEYS
GERMANY
CURRENT, 65
EUROZONE
PMI INDEX
12-MONTH HIGHEST Macro Overview The UK would revert to WTO rules, a
CZECHIA
FRANCE
12-MONTH LOWEST disruptive development for the economy
ITALY
60 Economic indicators in Europe remain
UK
at large. Even if the UK and the EU
positive, but the general outlook is
SPAIN
POALND
strike a withdrawal agreement, there is a
uncertain. In late July, Donald Trump and
55
chance it could be rejected by parliament,
Jean Claude Juncker agreed to hold off on
with an ensuing political crisis.
imposing tariffs while trade negotiations
50
are ongoing, providing a welcome respite In other European countries, the Czech
to the protectionist measures. and Polish PMI readings went down
sharply to an 11-month-low in July.
FIGURE 2: That said, a history of unpredictability by
120 1.0% The Polish PMI fell to 52.9, and the
INDUSTRIAL PRODUCTION 120 1.0 the US President means there is no room
GDP GROWTH Q/Q [%]
Czech reading dropped to 55.4 – these
INDUSTRIAL PRODUCTION INDEX
INDEX VS GDP GROWTH 115
115 0.5%
0.5 for complacency, and as the relationship
Q/Q, 2Q 2004 TO 2Q 2018 readings remain above the 50 ‘growth
110
110 00.0%
with key trading partners the EU and
IN THE EU28 China becomes strained, investor and
watershed’ marker, so the markets
105
105 -0.5%
-0.5
continue to expand but at reduced rates
industrial confidence diminish. As the
100
100 -1.0%
-1.0
of growth. The Spanish and Italian
latest industrial PMI readings show, the
95
95 -1.5%
-1.5 PMIs also fell in July, to 10-month and
trend for the eurozone as a whole – and
90
90 -2.0%
-2.0 20-month lows, respectively, despite a
the major economies within – is one of
85
85 -2.5%
-2.5 robust reading of 52.9 in Spain.
declining confidence. All markets are
80
80 -3.0
-3.0% reporting declines in their index levels Oil Prices & Inflation
2004-Q2
2004-Q4
2005-Q2
2005-Q4
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2007-Q2
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2008-Q4
2009-Q2
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2013-Q2
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2014-Q2
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relative to 12 months ago.
Trump’s withdrawal from the Iran
Looking at the worldwide view, the nuclear deal in May, and the forthcoming
current consensus global GDP forecast US sanctions on Iran to be imposed
FIGURE 3: from Oxford Economics has been revised in November, have led to an increase
200
GLOBAL OIL PRICES, down by 0.1% (to 3.1%) for 2018. In the in oil prices. This price rise could
175
ANNUAL GROWTH eurozone, the GDP growth forecast was dampen activity in the industrial and
OIL PRICE REAL INDEX
2000-2009 150
also revised down by 0.1% (to 2%) for logistics sector, eating into the margins
125
2018, and from 1.8% to 1.7% for 2019, due of distributors and, in the longer term,
100
to the impact of expected US tariffs on negatively impacting consumer spending
75
imported European cars. If it escalates, - and thus demand for logistics. Inflation
50 the trade dispute would hit Germany and is picking up in Europe, with three
25 Eastern Europe the most, as the core of its largest economies - Germany,
0 automotive production regions of Europe. France and Spain - reaching above the
-25 European Central Bank target of 2% in
Meanwhile, in the UK, the risk of a
-50 June. The eurozone headline inflation
Brexit ‘no deal’ outcome has come into
was confirmed at 2.1% in July, the
50 increasing focus during the summer
40% 38% highest rate since late 2012. This could
25 months. Companies such as Ford,
ANNUAL GROWTH
exert pressure on disposable incomes,
0 Jaguar Land Rover, BMW and Airbus
leading to weaker consumption and thus,
are some of the bigger names to have
-25
-33% lower GDP growth rates.
-43%
expressed serious concerns about
-50
the possible repercussions a no-deal
2000
2001
2002
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
scenario would have on their UK
production operations.
Sources: Figure 1: Colliers International, Markit | Figure 2: Colliers International, OECD, IMF | Figure 3: Colliers International, Oxford Economics6 7
FIGURE 4:
Q2 | EMEA
Research & Forecast Report | Colliers International
Research & Forecast Report | Colliers International
EMEA | Q2
2017 2018 2019
UNEMPLOYMENT RATE,
MAIN EMEA CITIES,
2017-2019
0 2 4 6 8 10 12 14 16 MARKET OVERVIEW: DEMAND
ISTANBUL
UNEMPLOYMENT %
MADRID Shrinking labour pool impacts Take-up in the Netherlands displayed
the market healthy annual growth of 14%, based on
BARCELONA
the 12-month rolling take-up to end Q2
Falling labour market capacity has
VIENNA 2018. Activity was driven by industrial
become a challenge for the industrial
PARIS hotspots. The Schiphol-Rijk region,
and logistics market, as employment
located outside Amsterdam and near
MILAN expectations grow across Europe. In
the airport, continues growing as an
BERLIN an increasing number of locations, the
industrial hub, with year-on-year (y/y)
undersupply of labour is starting to act as
COPENHAGEN take-up growth of 178%. In Rotterdam,
an inhibitor to growth, or as a driver of
STOCKHOLM y/y take-up expanded by 99% on the
relocation decisions. We are witnessing
back of trade around the port. The Venlo
DUBLIN a number of companies seeking out
region, located near the German border,
LONDON the final pockets of under-utilised
displayed decent take-up growth of 20%
labour pools across Europe to help
MANCHESTER
(y/y). The Tilburg region registered
stabilise their production footprint. As a
BUCHAREST take-up growth of 12% (y/y).
counter to this, some manufacturers are
AMSTERDAM increasingly resorting to automation. The Spanish market had strong
FRANKFURT performance, displaying 12-month
On the bright side, falling unemployment
rolling take-up growth of 86% (y/y).
MUNICH is boosting wage growth, which in turn
This was mainly driven by activity in the
BUDAPEST is driving consumption and domestic
Madrid region, which expanded by 81%
demand. This is helping to drive the
WARSAW - Barcelona growth was relatively muted
industrial and logistics market, counter-
MOSCOW at only 5%, but is severely constrained by
balancing capacity constraints.
PRAGUE
a lack of existing availability - vacancy is
Take-up imbalances fuelled by at 2.7%, and the current pipeline appears
a scarcity of modern space inadequate to satisfy demand levels.
There was a significant rise in gross
In Poland, tenants leased 1 million sq
take-up during H1 2018, with 50%
m of modern industrial space in H1
of markets reporting an expansion
2018 across the country. Looking at the
in demand compared with only 35%
12-month rolling figures, the fastest rate
FIGURE 5: during H2 2017, a figure consistent with
of take-up growth (56%), came from the
TAKE-UP an environment of strong demand by
100%
traditionally industrial area of Lodz, in the
CHANGE IN 12 MONTH RISE industrial and logistics tenants.
ROLLING TAKE-UP Central Poland region – there has been
In Germany, the Big Seven (Berlin, around 1 million sq m of total take-up in
Hamburg, Dusseldorf, Cologne, Munich, this area over the last 12 months. Warsaw
NO CHANGE
Frankfurt and Stuttgart) markets saw annual growth of 16%, having
generated take-up of 2.7 million sq m reached also 1 million sq m in total take-
in the 12 months from July 2017 to up over the last 12 months. The second
FALL
June 2018, down -5% year on year, fastest-growing location (45%) was
but with big discrepancies across these the city of Wroclaw in Western Poland,
markets. Cologne (-44%), Munich (-38%), reaching 465,000 sq m in annual take-up.
H2 2017 H1 2018
Hamburg (-24%), and Berlin (-19%), all
suffered significant declines. Dusseldorf
grew by an impressive 61%, Frankfurt by
Sources: Figure 4: Colliers International | Figure 5: Colliers International 23%, and Stuttgart by a more modest 5%.8 9
FIGURE 6:
Q2 | EMEA
Research & Forecast Report | Colliers International
Research & Forecast Report | Colliers International
EMEA | Q2
GROWING
VACANCY RATES
100%
100%
MARKET OVERVIEW: DEMAND
RISE
CURRENT | left
STABLE
NO CHANGE
VACANCY RATES
OUTLOOK | right Vacancy decreases driven by Construction pipelines are
BASIS: lack of new completions constrained in many markets
HALF YEAR-ON-HALF
YEAR FALLING
Vacancy rate compression continued In a positive sign for the market, the
FALL during the first half of 2018. The development pipeline looked slightly
percentage of markets registering more robust by end of H1 2018 than in
vacancy declines was up by 2% to 58%, the previous six-month period - 52%
H2 2017 H1 2018 H2 2017 H1 2018 while the number of markets reporting of markets reported an increase in
vacancy rate rises dropped to 22% their pipelines in H1 2018 compared
from 24% at end 2017. The outlook for with 51% in H2 2017. Meanwhile the
the next 12 months is consistent with percentage of markets registering falls
current trends, with declining vacancy in their construction pipelines went
rates expected in 55% of markets. down from 40% to 32%.
FIGURE 7: H2 2017 H1 2018 A closer look at vacancy by city size In Cologne, developers are focusing on
AVERAGE SHIFT IN reveals some differences by market size. revitalising obsolete space, and most
VACANCY RATES
Downward pressure on vacancy is easing of Cologne’s take-up in this city was
(6 MONTH BASIS
-35.5 BP in mega cities (10+ million population), achieved through rentals of existing
POINT CHANGE), MEGA ( >10M) -14.6 BP
BY MARKET SIZE with a decrease of -15% by end of H1 space. Munich and Berlin are in much
2018, compared -35% falls registered need of speculative development, but
-8.6 BP
LARGE (5-10M) -3.8 BP during H2 2017. Yet the pace of vacancy there are a number of obstacles to
rate compression is much higher than planning in town centres, thus the
in large cities (5-10 million population) popularity of industrial parks, where
-3.0 BP
MID-SIZE (2-5M) 0.5 BP which saw vacancy declines slow from there is no residential element involved,
-8% in H2 2017 to -4% in H1 2018. is rising. In Berlin, a pick-up of large-
volume rentals is forecast to take place
-3.0 BP Vacancy rate compression varies by city.
SMALL (10 11
Q2 | EMEA
Research & Forecast Report | Colliers International
Research & Forecast Report | Colliers International
EMEA | Q2
MARKET OVERVIEW: RENTS
FIGURE 9: City Warehousing In London, Crossrail and Crossrail 2
CITY WAREHOUSE are already impacting industrial rents,
100%
100%
GROWTH GROWING Rental growth in city warehousing
RENT ACCELERATING for instance in Woolwich (up 33%
across EMEA showed signs of
CURRENT | left y/y to £16 per sq ft in the 12 months
GROWTH stabilising, in H1 2018 when compared
SLOWING from July 2017 to June 2018), and in
CITY WAREHOUSE with H2 2017, with the percentage of
Tottenham (up 32% y/y to £14.50 per
RENT markets displaying a slowdown in rental
OUTLOOK | right STABLE sq ft in the same period). The delivery
growth at 19% as of the end of the first
CHANGE IN EXPECTATIONS STABLE of Crossrail is now scheduled for late
half of 2018, compared to only 2% at
2019, and Crossrail 2 is still in the initial
end 2017. Some of the best performers
phase. Similarly, due to the proximity
DECLINE
in the city warehouse space in H1 2018
to Gatwick airport and a chronic lack of
ACCELERATING FALLING included Venlo (10%), Munich (9.4%),
Q1 2018 Q2 2018 Q1 2018 Q2 2018 Grade A supply, prime rents in Crawley
Greater London (7.4%), Birmingham
also grew by an impressive 33% to £14
(7.4%), Rotterdam (7.1%), Madrid (6.3%),
per sq ft over the same period.
and Prague and Barcelona (both 5.9%).
Another factor exerting upward
The outlook over the next 12 months
FIGURE 10: pressure on rents is demand for last
is for a greater degree of rent stability,
LOGISTICS& DISTRIBUTION mile and local distribution centres.
100%
100%
GROWTH
GROWING with 64% of markets expecting rents to
RENT ACCELERATING
remain the same, up from 56% in the
There is increasing decentralisation
CURRENT | left GROWTH at the end of the supply chain as
SLOWING previous outlook.
occupiers continue to push into the
LOGISTICS& DISTRIBUTION Logistics/ Distribution Rents urban core, where consumption is
RENT
Regarding the logistics and distribution rising fastest. Significant undersupply
OUTLOOK | right STABLE STABLE
CHANGE IN EXPECTATIONS segment, the top performers included and the loss of industrial land to other
Venlo (11.1%), Rotterdam (7.7%), uses, is exerting upwards pressure
Click here for our
Stockholm (5%), Greater London (3.9%), on prime rents in Croydon, owing to
DECLINE
I&L rent & occupier conditions map
ACCELERATING FALLING Hamburg (3.4%), Budapest (2.6%) and its strategic south London location, at
Q1 2018 Q2 2018 Q1 2018 Q2 2018 Munich (2.2%). The weaker performers £14.50 per sq ft (+32% y/y). Similarly,
were again Istanbul (-4.3%) and Merton’s rents are now reaching £15
Moscow (-10.5%). Barcelona, Prague per sq ft (+30%, y/y).
and Madrid were some of the cities to
Around London, overall some of the
display flat growth.
highest prime industrial rents remain
Factors influencing rental prices in Park Royal (with demand for last
Factors such as last-mile location and mile distribution combined with relative
proximity to infrastructure continue proximity to Heathrow airport) pushing
to influence pricing. At other times, rents up to £17.50 per sq ft, above
it is a simple function of demand far Heathrow’s £16 per sq ft rents. In the
outstripping supply. last 12 months, there was significant
growth in other West London locations,
Taking the UK as an example, major
with Acton now achieving £17 per sq ft.
infrastructure developments are having
an influence on rents, even during the
planning stages.
Sources: Figure 9: Colliers International | Figure 10: Colliers International12 13
Q2 | EMEA
Research & Forecast Report | Colliers International
Research & Forecast Report | Colliers International
EMEA | Q2
MARKET OVERVIEW:
OCCUPIER CONDITIONS
Despite a cooling of rental growth, The outlook for these cities is to continue
limited development pipelines and enjoying these conditions. Stockholm has
availability continue to push the drive been landlord favourable since Q1 2015,
to landlord favourable markets. They however it is softening with the outlook
account for 41% of markets as of end set for a neutral environment starting in
H1 2018, compared to only 31% of the the next few quarters.
total two years ago. The percentage of
The evolution of Eastern European
neutral markets has remained broadly
countries is interesting to watch, with
the same during the two-year period,
the Czech Republic turning landlord
ending at 41% of markets by end of
favourable in Q3 2017, after several
June 2018. Overall, this has seen the
quarters as a neutral market. In
relative number of tenant favourable
Budapest the market turned landlord-
markets drop to only 18%.
favourable in Q1 2017. Warsaw overall
Germany remains one of the strongest remains a tenant favourable city, but in
markets, with Berlin a landlord-favourable the Warsaw III sub-market covering the
market since Q2 2017, Hamburg since outer distribution ring of the city, the
Q1 2016, and Stuttgart, Dusseldorf and latest indicators now point to a landlord-
Munich, since Q2 2015. Cologne has favourable market.
been the longest-running landlord-
favourable market, since Q4 2014.
FIGURE 11:
100%
EVOLUTION OF Tenant
OCCUPIER CONDITIONS
Neutral
Landord
JUN-16 DEC-16 JUN-17 DEC-17 JUN-18 JUN-19
Sources: Figure 11: Colliers International14 15
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Research & Forecast Report | Colliers International
EMEA | Q2
RUSSIA New supply of industrial
AROUND THE MARKETS
space in H1 2018 amounted to
81,850 sq m, 50% lower than in
DENMARK Modern industrial and H1 2017. With demand increasing
logistics properties are in high by 12% annually, there is a sharp
demand from both investors and imbalance between demand and
occupiers. Vacancy rates have supply, and vacancy rates in the
been steadily declining since 2012, Moscow region continued to decline,
reaching 2.1% (-0.7% in H1 2018 reaching 7.4%. Rental rates were
on H1 2017) in Copenhagen, and flat but are forecast to grow on the
NETHERLANDS Demand for I&L space back of healthy, stable demand and
is driven by growing business in trade are forecast to decrease in the
coming year. The current building the completion of new, high quality
hotspots like the port of Rotterdam, Venlo warehouse buildings.
on the border with Germany, and the stock is highly differentiated in
industrial hub around Schiphol airport. terms of construction year, location,
In Rotterdam, logistics services provider efficiency and by extension vacancy
Dudok is developing a distribution centre risk and the ability to sell or lease
with head office for Neele-Vat, spanning the property. Sale & leaseback
UK Record demand continued to fuel
45,000 sq m. In the southern region of transactions are becoming more
the industrial market in the UK, with popular, especially for larger LITHUANIA Strong developer interest in Lithuania translated into 55,500 sq m under
take-up reaching almost 50 million sq Tilburg, retailer Bijenkorf announced the
customers with financial muscle. active construction in Q1 2018, mostly built-to-suit projects. In Q2 2018, the Apranga
ft and on track to exceed the long-term opening of a new distribution centre to
Group administration and logistics centre was completed in Vilnius Business Park after
average in H1 2018. In the North East, supply all stores, as well as e-fulfillment
an investment of € 14 million. In Q2 2018, speculation continued apace representing
a mixed-use business park spanning activities. In Amsterdam, demand comes
60% of 53,200 sq m of overall development, including the construction of two logistics
over 1.6 million sq ft on the outskirts from growing requirements for city
warehouses (13,000 sq m) by logistics services company Transimeksa. Vacancy rates
of Darlington will host Amazon in a distribution in e-commerce, and growth in
slightly decreased in H1 2018, but speculative supply is expected to push vacancy rates
major coup for the area. The South the construction and hospitality industries.
higher by end of 2018.
East and Yorkshire saw several large
deals including Clipper Logistics taking
615,000 sq ft in Sheffield, the largest
deal for a second hand unit in 2018.
Although demand from industry is
POLAND Most construction sites are located in the Central Poland region (around
growing, the biggest share of take-up in
570,000 sq m). The biggest project currently under construction is the Hillwood
H1 2018 (40%) came from retail on the
Zalando 1 warehouse, which will provide modern warehouse space of around 126,000
back of demand for units over 100,000
sq m. The highest level of supply was also recorded in Central Poland (186,000 sq m),
sq ft, including food retailers like Lidl.
GERMANY Performance was polarised where vacancy rates were just under 1% in June 2018.
between Düsseldorf, Frankfurt and Hamburg,
displaying strong activity, and Berlin and
Munich, where a severe undersupply of
modern premises, particularly in central
locations, is slowing down the market.
Take-up of 330,000 sq m (Frankfurt),
248,000 sq m (Hamburg) and 100,300 sq m
(Düsseldorf) was achieved in H1 2018, with
the latter growing by more than 50% year
on year. In Düsseldorf, deals of note included ROMANIA Development in the warehouse space reached over 100,000 sq m in H1
HUNGARY Developer activity
the lease of 10,500 sq m by beverage retailer 2018 in Bucharest, a similar figure to H1 2017. Bucharest represented only one third
continues unabated, with demand
Flaschenpost. The largest owner-occupier of total nationwide activity, down from 50% in H1 2017. Activity was concentrated in
far outstripping supply in this fast-
deal involved an operations centre built in the western part, although the north is shaping up as an attractive alternative location.
growing market. Commercial real
Hamburg by logistics provider In-Time. Vacancy rates reached 2% and demand far outstrips supply, with modern warehouse
estate developer and manager CTP
stock highly coveted. Emag.ro, the largest online retailer in the country is due to open a
started construction of new premises
120,000 sq m facility west of Bucharest. Infrastructure developments that would open
in Biatorbágy (which will expand
other sub-markets (mostly linked to expanding the ring-road to the southern part of
the developer’s future lettable space
Bucharest) are progressing slowly.
in the area to 450,000 sq m) and in
Dunaharaszti. The retail sector was
an important demand engine with
French company ‘Auchan Retail
Hungary’ planning to move into an
87,000 sq m industrial park built and
managed by operator and developer
Goodman. Total demand reached
103,297 sq m in H1 2018, while
net-take up excluding renewals
amounted to 60,232 sq m.
GREECE Demand for industrial space has remained stable during H1 2018, driven
by occupancy in the floor spaces from 1,000 to 3,500 sq m and above 10,000 sq m.
These size cohorts are experiencing really constrained availability. A key major new
development, by Rail Cargo Logistics Goldair, is in construction, with the first phase of the
120,000 sq m freight centre in “Thriassio Pedio”. With a total budget of €70 million, this
project is likely to draw demand of industrial space towards the western region of Athens.16
Q2 | EMEA
Research & Forecast Report | Colliers International
OUTLOOK
Fierce competition for warehouse space and Generally speaking, occupiers looking for
very limited availability will continue to weigh industrial accommodation in key geographies
heavily on activity over the remainder of 2018, like Germany, the Benelux region and
and most likely well into 2019. Scandinavia must prepare for further rental
uplifts, but the market is stabilising in
Looking at the macroeconomic picture, there
places. In cities including Stuttgart, Munich,
are a number of uncertainties ahead that weigh
Barcelona and Budapest, healthy demand will
heavily on the outlook for industrial/logistics
be clashing with reduced supply, but in cities
real estate. The UK market has remained
like Lodz in Poland, active pipelines could be
bullish in the face of Brexit, but there are big
holding back uplifts in rental rates.
uncertainties around the impact that a possible
‘no deal’ outcome could have for supply chains A scarcity of land and labour are two of the
after March 2019, when the UK is expected most important factors acting as inhibitors of
to be officially outside the EU. It is difficult market growth. Technology will increasingly
to predict the course of events, and whether play a role in evolving roles in production and
currency exchange fluctuations or inflationary in creating more efficient supply chains. The
pressures will be absorbed by the supply chain I&L sector will have to evolve with the times to
or passed on to consumers. remain competitive, in terms of technological
advancements. The fourth industrial revolution
That said, UK rental forecasts remain positive
will mean that increasingly sophisticated
for the UK industrial sector, set to outperform
automation will be a reality of ever more
the other core property sectors in 2018-
warehouses around EMEA.
2022. According to the all-industrial MSCI
rental index, they expect an uplift of 3.7% The rapidly evolving e-commerce sector may
in 2018, slowing to 2.4% in 2019, before also encounter challenges that could impact
resuming an upward trend, bringing the industrial real estate, such as increasing fiscal
5-year annual average to 3.2%. regulation. Recently, debate around business
rates in the UK has come to a head, with the UK Peter Kunz Damian Harrington Istvan Toth
In the EU27, Germany and the Eastern
European automotive regions, would be
chancellor discussing an ‘Amazon tax’ to create FOR
Head of MORE
Industrial &INFORMATION
+49 69 719192-23
Logistics | EMEA Director, Head of Research | EMEA
+44 7867 360489
Senior Data Scientist | EMEA Research
+44 20 7487 1899
a more level playing field between e-retail
disproportionally affected by the trade wars peter.kunz@colliers.com damian.harrington@colliers.com istvan.toth@colliers.com
driven companies and traditional, notably high-
with the US. Optimism in the manufacturing
street driven, companies. Karel Stransky Beatriz Valle Juliane Priesemeister
sector is at its lowest in almost three years,
Director | EMEA Corporate Solutions Senior Analyst | Research | EMEA Information Designer | EMEA Research
according to Markit, and a key theme in the
+420 603 457 242 +44 20 7487 1718 +31 20 540 55 55
latest survey is sharp inflationary pressures in karel.stransky@colliers.com beatriz.valle@colliers.com juliane.priesemeister@colliers.com
the manufacturing sector. Inflation could also
weigh on the outlook with businesses reporting
more muted activity over the next few quarters
in the latest Markit/PMI survey.
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