LOGISTICS HUBS EMEAINDUSTRIAL - Fastly
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
INDUSTRIAL EMEA & LOGISTICS HUBS QUARTER 2 | 2020
2
Q2 | EMEA
Research & Forecast Report | Colliers International
EXECUTIVE SUMMARY
• ECONOMY: The EEA30 saw bottleneck markets. The marginal
GDP slump by -7.1% (Y/Y) by the increase in active construction was
end of H1. The lockdown induced also the result of large development
economic contraction has been projects completing during the first
most noticeable in Q2, which saw half of 2020. While Istanbul (-81%),
a (Q/Q) drop of -12.2%, with the Dusseldorf (-76%) and Stuttgart
hospitality and tourism industries (-67%) saw the largest (H/H)
most impacted. While a Q3 uptick in declines, little impact was seen in
activity is putting markets on track relation to their current vacancy
for a rebound in growth in 2021, rates - particularly Istanbul, which
pre-crisis challenges remain. US- saw vacancy move in by -376 bps;
China Trade-War tensions, Brexit further signifying demand severely
transition negotiations and the mid- outweighs new and available supply.
to-long-term management of the • VACANCY: The weighted (average)
pandemic and its impact will shape vacancy rate for Europe remains a very
European economies and their rate low 3.7% - stable on Q1, and only a 10
of growth for years to come. bps increase on Q4 2019. This reflects
• EUROPE’S SERVICES AND that vacancy rates are bottoming out,
MANUFACTURING PMIs: As a with just 36% of markets recording
result of national lockdowns, the vacancy contractions in H1 2020,
Eurozone (EZ) services PMI score compared to 45% in H1 2019.
fell to 12.0 in April. Moreover, • OCCUPIER CONDITIONS: Landlord-
European (manufacturing) PMI favourable markets continue their
indicators also slowed, but to a prevalence across markets, but as of
much shallower level. By April, the H1 2020 they were matched by neutral
EZ’s PMI fell to 33.4, with Spain, market conditions – both represent
Russia, Italy and France falling to a 41% share of markets surveyed.
30.8, 31.3 and 31.5 respectively. This reflects an easing of landlord-
By June, the UK, France, Italy and favourable dominance of 51.5% in
Denmark had already moved back H1 2019. The outlook for the next 12
into expansionary mode, with months depicts these conditions will
France and Italy leading the way, remain largely stable although there
both scoring 52.3. may be a ceding of landlord conditions
• TAKE-UP: While EMEA’s rolling in some markets. Low vacancy, a
12-month take-up was down -8.4% lack of quality new availability and
Y/Y, activity over H1 2020 remained strong growth in e-commerce will be
ahead of the same period a year counterbalanced by broader economic
ago. This 3.6% growth came with uncertainty.
additional demand for servicing • RENTAL PERFORMANCE: City-
online retail being activated as our warehouse prime rents grew in
home delivery requirements soared 19% of the locations monitored
during the Covid-19 lockdown. during H1 2020. Some 17% of
• DEVELOPMENT PIPELINE: By June, markets saw rents for logistics and
space under active construction distribution markets grow, primarily
(UAC) had risen by only a marginal due to expansionary e-commerce
1.8% (H/H), as many speculative demand. Overall, rents remained
developments were mothballed in largely stable. This is set to
the wake of COVID-19, or at least continue for the next 12 months, bar
delayed or revised. This is expected core locations where rental growth
to influence (negatively) upon future is expected, albeit at a slower pace.
take-up volumes, especially in supply-3
Research & Forecast Report | Colliers International
Q2 | EMEA
KEY METRICS IN MAJOR EMEA CITIES: H1 2020
TAKE-UP VACANCY PRIME RENT PRIME RENT
CITY WAREHOUSING LOGISTICS & DISTRIBUTION
12M 6M 6M 6M
CHANGE CHANGE 12M €/SQM/ CHANGE 12M €/SQM/ CHANGE 12M
CITY [SQM] [%] [%] [BPS] OUTLOOK MONTH [%] OUTLOOK MONTH [%] OUTLOOK
Barcelona 198.0 -40.9% 2.60 0 4.2 -11.2 4.2 -8.0
Birmingham 317.1 -14.3% 3.50 -10 4.0 0.0 4.0 0.0
Bucharest 222.8 102.5% 7.00 200 4.9 0.0 4.9 0.0
Budapest 282.2 48.0% 2.59 74 5.0 0.0 4.9 0.0
Frankfurt 105.1 -55.6% 3.10 -40 n/a 4.9 2.1 4.9 14.1
Hamburg 160.0 13.3% n/a n/a n/a 10.5 0.0 7.2 0.0
Istanbul 220.2 408.9% 16.96 -376 13.8 0.0 13.3 0.0
London 87.3 -52.8% 2.70 71 6.3 0.0 5.8 0.0
Madrid 218.6 37.9% 7.79 115 6.5 4.0 5.5 0.0
Moscow 514.0 0.8% 3.10 -60 7.6 0.0 6.4 0.0
Munich 264.8 143.2% 2.00 54 n/a 8.1 0.0 6.5 0.0
Paris n/a n/a n/a n/a n/a 4.6 0.0 4.4 0.0
Prague 264.7 0.2% 2.30 -125 7.7 0.0 6.3 0.0
Rotterdam 118.0 35.6% n/a n/a 7.5 0.0 5.4 0.0
Stockholm n/a n/a 4.50 0 4.9 -2.0 4.9 22.5
Venlo 67.0 -55.3% n/a n/a 9.5 0.0 7.5 0.0
Warsaw 543.9 -6.6% 7.16 92 7.0 0.0 5.4 -1.8
*UK industrial data relate to the region
Sources: Colliers International4
FIGURE 1: Dec-19 Feb-20 Apr-20 Jun-20
INDUSTRIAL PMI
MANUFACTURING 55
Q2 | EMEA
Research & Forecast Report | Colliers International
SURVEYS
DECEMBER 2019 -
PMI (Manufacturing) Score
50
JUNE 2020
45
Denmark
40
Netherlands
Sweden
Czechia
Germany
Eurozone
Hungary
35
Poland
France
Russia
UK
Italy
Spain
30
FIGURE 2:
INDUSTRIAL PRODUCTION 160 15
INDEX VS GDP GROWTH 150
QUARTER-ON-QUARTER, 140 10
EU27 + UK 130
Industrial Production Index
120 5
GDP Growth Q/Q [%]
110
100 0
90
80 -5
70
60 -10
50
40 -15
2005 2007 2009 2011 2013 2015 2017 2019 2021 2023
FIGURE 3:
COUNTRY GDP & 10.0
EMPLOYMENT GROWTH Turkey
2021, YEAR-ON-YEAR 8.0
FORECAST GROWTH %
Employment Growth
6.0
4.0 Ireland
Denmark
Sweden
2.0 Romania
Portugal
Austria
Hungary Poland Belgium
Germany Baltics
Czechia
0.0 Russia
UK
Netherlands EZ Spain
Italy
Finland Switzerland
France
-2.0
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 12.0
Sources: Figure 1: Colliers International, IHS Markit | Figure 2: Colliers International, Oxford Economics | Figure 3: Colliers International, Oxford Economics5
Research & Forecast Report | Colliers International
EMEA | Q2
MACROECONOMIC OVERVIEW
Eurozone: Following a sharp GDP fall in UK: GDP fell by over 20% (M/M) in April,
Q1, monthly figures show that economic the largest monthly decline ever recorded.
activity contracted most severely in April, Encouragingly, May’s data, showed a 1.8%
coinciding with the onset of lockdown (M/M) increase in GDP, and June figures
measures in most European countries. were up around 8%. Nonetheless, the UK
As of July, sentiment indicators continue economy will record its largest annual
to improve, with several countries PMI drop in GDP in modern history this year
score pointing to expansionary activity (-10.9%), followed by its largest annual
after the April trough. All major economies increase (+10.3%) in 2021. The official
are back on track. The recovery path will unemployment rate (6.4%) remains near
be mixed as markets adjust to a new a four-decade low but has seen outward
normal, and governments configure how movement of exactly half.
best to support national economies and
Germany: Consequences of lockdown
employment levels without putting public
actions, falling inventories, supply-chain
debt levels at unsustainable, high-risk
disruptions and temporary closures of
levels. There is also the concern over
carmakers’ factories, saw industrial
the summer spike in cases, and how
production fall by -25% (Y/Y). Factory
the COVID-19 virus will be contained
orders were down -37% in April. While
with the onset of winter, while keeping
Europe’s “unlocking” saw output and orders
production facilities as open and functional
recover a little, they were still down -29%
as possible. The agreement between
M/M. Germany expects a 6% plunge in
European Union leaders for the EU €750
economic output in 2020 (after a 4% fall
billion stimulus package to help pull their
last year) before a rise of over 5% in 2021.
economies out of the worst recession in
memory, will go some way to supporting France: GDP contracted by 5.3% in Q1, as
the growth effort, whilst tightening the the national lockdown cut consumption
financial bonds holding the 27 nations by -5.6%; a pillar of domestic growth.
together. This is an important step forward Business investment (-10.5%) and exports
for the EU-Bloc as it negotiates a new (-6.1%) also fell, and GDP for 2020 is set
budget to start in 2021, coinciding with the to contract by just over 10% Y/Y. Despite
UK transitioning out by the end of 2020. a recovery in 2020, the economy is not
Things have been relatively quiet on that expected to hit pre-crisis levels until later
front to date, but now the first shockwave in 2022. To combat economic contraction,
of the pandemic is over, time is pressing and particularly safeguard employment,
for a deal that suits both parties with the over €0.5 trillion has been injected into
least disruption possible. the economy by the French government.
Yet the fall in employment remains a major
As Figures 2 and 3 show, there is an
concern, as unemployment reached 9.4%
expected upturn in industrial output, GDP
at end H1.
and employment growth in 2021, with the
manufacturing sector far less impacted Italy: Italy entered 2020 as the Eurozone’s
by the contraction in services. Equally, the weakest economy, and it has been one
rapid transfer of spending in retail to on- of the hardest hit countries by COVID-19,
line, has been a boon for the logistics and given the very strict national lockdowns
transportation sector in terms of activity, imposed and a reliance on tourism to
if not profit. The automotive sector also support the national economy. GDP is
remains a major concern, as the industry expected to fall by -9.3% Y/Y in 2020,
grapples with a structural shift in demand with unemployment rising to 10.4% by
for cars, and the need to accelerate electric end 2020. Unemployment is expected to
and hybrid production. Car production rise further in 2021 to around 12%, as the
levels (and sales) have hit some of the economy struggles to make up lost ground,
lowest levels on record for a number of rising by only 5.7% in 2021.
European countries during 2020.6
FIGURE 4:
UNEMPLOYMENT RATE, 2019 2020 (F) 2021 (F)
MAIN EMEA CITIES, 25.0
Q2 | EMEA
Research & Forecast Report | Colliers International
2019-2021
ILO DEFINITION 20.0
15.0
%
10.0
5.0
0.0
Athens
Istanbul
Barecelona
Madrid
Vienna
Rome
Lisbon
Paris
Helsinki
Milan
Copenhagen
Stockholm
Berlin
Oslo
London
Dublin
Edinburgh
Amsterdam
Frankfurt
Stuttgart
Bucharest
Munich
Prague
Moscow
Warsaw
FIGURE 5:
CHANGE IN 12 MONTH Rise No Change Fall
ROLLING TAKE-UP
100%
BY % OF MARKETS
Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20
FIGURE 6:
DEMAND EXPECTATIONS:
EMEA I&L SURVEY Demand increases
MARCH 2020 Neutral
Demand declines
Sources: Figure 4: Colliers International, Oxford Economics | Figure 5: Colliers International | Figure 6: Colliers International7
Research & Forecast Report | Colliers International
EMEA | Q2
MARKET OVERVIEW: DEMAND
Availability of labour is crucial for maintaining However, a limiting factor, is the lack of
active production lines, and, is a key driver suitable stock in such locations. Stalling
of domestic and consumer demand. demand is often the result of restricted
Unfortunately, COVID-19 has impacted availability, with latent demand building-up.
heavily on current employment growth in In Germany, and other markets, the lack
major cities. The EEA30’s unemployed of suitable supply (especially in size bands
population grew by 24.5% (Y/Y) by H1 2020 >10,000 sqm) is initiating supply-side
and Figure 4 visualises cities experiencing responses. In Frankfurt, 301,000 sq m was
this negative impact. under active construction (UAC) at the start
of the year, which had fallen to 73,100 sqm
Eurozone domestic consumption in Q2 also
by end Q2 as 227,900 sq m was completed.
made a negative -8.51 contribution to GDP,
Although vacancy moved in from 3.7% to
particularly for the automotive industry.
3.1%, take-up remained down -56% Y/Y.
However, many occupiers have now looked
Furthermore, the lack of large units available
to diversify. For example, in the UK, while
for lease was reflected in the fact that
this year marked the lowest annual output
Wayfair’s 37,000 sq m let, was the only deal
for car manufacturing since 1954, notable
over 20,000 sq m in H1.
manufacturers; Aston Martin, Rolls Royce,
Nissan and Jaguar/Land Rover; began using Finally, many occupiers also feel existing
existing operations as bases for production stock lacks modern specification
of PPE equipment in order to preserve incorporating automation, robotics and ESG
domestic demand. requirements. In Rotterdam, more new-
build developments are coming online, with
While EMEA’s rolling 12-month take-up
built-to-suit models being the favoured
was down -8.4% (Y/Y), Q2 2020 growth
method of construction as a result. This is
was exceptional at almost 6.5 million sqm,
also true in other regions across Europe,
following a subdued Q1 of 1.78 million sq
such as the “Golden Triangle” in the UK,
m (down -74% Q/Q). Q1 figures showed
where developers have increased BTS
occupiers favoured re-gears, rather than
developments.
expansions, as the outbreak of COVID-19
pushed many occupiers into “defensive”
stances. While take-up in Q1 was low, by
end H1-end 2020, 47% of markets had seen
an increase in take-up; up 11% on H2 2019.
Take-up was particularly strong in mega-
cities, which saw the weighted vacancy
rate (H/H) move inwards by -20.06%.
Such movement is attributable to growing
take-up for last-mile logistics operations
actively seeking to serve significant growth in
e-commerce demand.8
FIGURE 7:
VACANCY RATE Rise No Change Fall
CHANGES
Q2 | EMEA
Research & Forecast Report | Colliers International
BY % OF MARKETS
100%
Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20
FIGURE 8:
AVERAGE SHIFT IN BASIS POINT SHIFT
VACANCY RATES -50 -40 -30 -20 -10 0 10
(6 MONTH BASIS POINT
CHANGE), Mega (10M+)
BY MARKET SIZE
Large (5-10M)
Mid-size (2-5M)
DEC-2019 Small (2M-)
JUN-2020
FIGURE 9:
CHANGES IN SPACE Rise No Change Fall
UNDER ACTIVE
CONSTRUCTION (UAC)
100%
BY % OF MARKETS
Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20
Sources: Figure 7: Colliers International | Figure 8: Colliers International | Figure 9: Colliers International9
Research & Forecast Report | Colliers International
EMEA | Q2
MARKET OVERVIEW: SUPPLY
EMEA’s active pipeline of I&L space new and available supply in many markets.
increased in the last year by 7.8%, with 34% The exception was Wroclaw, which saw a
of markets indicating an increase in space decline of -99% of space UAC over the first
under active construction (UAC) by June six months of 2020, but still saw vacancy
2020. move out by +721bps.
Space UAC has only risen by 1.8% since the If we look at changes in vacancy by city size,
end of 2019, as many new completions were it shows that the biggest contractions in
added to the market, but this growth has vacancy have been in the mega-cities (based
been subdued - exacerbated by COVID-19 on population size), moving in by 20 bps
- as many developers have mothballed since the end of 2019. These cities are most
speculative developments, or at least delayed in need of solutions to support increasing
or revised new projects. We expect this to levels of e-commerce demand, especially
influence (negatively) upon future take-up throughout the COVID-19 pandemic, where
volumes and future availability – putting finding suitable I&L space to support last
further pressure on vacancy. mile logistics remains very challenging.
Particularly when identifying distribution
By location, Munich saw the largest increase
and fulfilment centre options near the urban
in space UAC during the first half of 2020.
core.
It had reached 248,800 sq m as of end
June, up 652% from only 33,100 sq m By H1 2020, EMEA’s overall (average
in December 2019. Hamburg (+186%), weighted) vacancy rate had continued to
Bratislava (+68%), Poznan (+57%) and (slightly) loosen to 3.7% - but this is only a
Berlin (+55%) posted the next largest 10 bps increase on H1 2019. Across EMEA,
increases in new space under construction. exactly 50% of markets indicated outward
movement, with just 36% experiencing
Other markets recorded declines in their
contractionary movement. With 50% of
UAC pipeline, indicating a number of projects
markets indicating outward movement in the
were completed during the first half of
year-to-date, and 20% of markets expecting
2020. While Istanbul (-81%), Dusseldorf
vacancy to move out in the next 12 months,
(-76%) and Stuttgart (-67%) saw the largest
we expect occupier conditions to moderate.
declines in space UAC, little impact was seen
Only 10% of markets expect vacancy to fall
in relation to their current vacancy rates -
further to mid-2021.
particularly Istanbul, which saw vacancy
actually move in by -376 bps. This further
signifies how demand severely outweighs10
FIGURE 10: Landord Neutral Tenant
Q2 | EMEA
Research & Forecast Report | Colliers International
EVOLUTION OF
100%
OCCUPIER CONDITIONS
BY % OF MARKETS
Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 Jun-20 Jun-21 (F)
FIGURE 11:
PRIME RENTS HALF-YEAR GROWTH 12-MONTH OUTLOOK
CITY WAREHOUSING Growth
100%
Growth Accelerating
BY % OF MARKETS
Growth Slowing
No change No change
Decline Slowing
Decline Accelerating Decline
Jun-17
Dec-17
Jun-18
Dec-18
Jun-19
Dec-19
Jun-20
Dec-19
Jun-20
Click here for our latest
I&L Rent Map
FIGURE 12:
PRIME RENTS HALF-YEAR GROWTH 12-MONTH OUTLOOK
LOGISTICS&DISTRIBUTION Growth
100%
Growth Accelerating
BY % OF MARKETS
Growth Slowing
No change No change
Decline Slowing
Decline Accelerating Decline
Jun-17
Dec-17
Jun-18
Dec-18
Jun-19
Dec-19
Jun-20
Dec-19
Jun-20
Click here for our latest
I&L Occupier Conditions Map
Sources: Figure 10: Colliers International | Figure 11: Colliers International | Figure 12: Colliers International11
Research & Forecast Report | Colliers International
EMEA | Q2
MARKET OVERVIEW:
RENTS & OCCUPIER CONDITIONS
Overall, prime headline rents remained to a shift toward tenant-friendly
largely stable during H1, with 67% of conditions, a stable rental regime is
markets recording no change. Growth supported across the board. Yet core
accelerated in 19% of markets, which markets with low vacancy/availability
was only down by 3% from H1 2019, of suitable, modern grade-A facilities
indicating that despite economic still pose the right fundamentals for
cooling, coupled with the outbreak rental growth.
of COVID-19, market fundamentals
Given the market’s strong demand
remained largely in favour of landlords.
growth fundamentals, it continues to
However, and certainly in the coming be an attractive sector for investors.
months, our forecasts indicate rental Developers are trying to offset the lack
growth will slow down, notably of quality availability with an uptick
outside of the core European markets, in both built-to-suit and speculative
with only 13% of markets projecting developments; especially in locations
growth acceleration. The markets which have been largely untapped.
with the fastest growing rents for This ranges from the southern part
city-warehouses in H1 2020 included: of Bucharest, or within the UK’s East
Dublin (12%), Athens (10%), Gdansk Midlands market, where the availability
(9%) and Krakow (9%). Vienna (-4%), of development plots has bolstered
Vilnius (-4%), Riga (-2%) and Warsaw activity for design and build pre-let
(-2%) were at the other end of the developments around key locations
spectrum, showing mild rental declines such as Northampton.
(H/H) in 2020.
With development activity starting
For logistics and distribution space, to pick up, construction pipelines
there were a number of high-growth improving slightly, and more
markets for prime rents over the speculative space coming to market,
first half of 2020. The top markets there are early signs that pressure on
for logistics and distribution rental vacancy is loosening up across EMEA.
growth included Warsaw (up 22.5%), While landlord favourable conditions
Prague (up 21.3%), Dublin (up12.0%) will continue well in to 2021, demand
and Stockholm (up 11.8%). That said, and supply-side imbalances will
stable rental conditions surpassed gradually be addressed, tilting markets
city-warehouses, accounting for 77% away from being landlord favourable.
of markets – a 12% increase on H2
2019. Like city-warehouses, the outlook
for rental growth is slowing, with 83%
of markets expecting stable rents in
the year ahead. Only 12% are now
expecting rental growth over the next
12 months, down on H1 2019’s 24%.
Occupier conditions remain in favour of
landlords, but by H1 2020 their share
had fallen to 41%, dropping below 50%
for the first time since H1 2018. Given
that neutral conditions have an equal
share of markets (41%), as opposed12
Q2 | EMEA
Research & Forecast Report | Colliers International
AROUND THE MARKETS
NORTH WEST Demand for large distribution VENLO Supply of industrial and logistics space in Venlo is at its lowest level in years.
warehouses moderated in 2020 when compared Demand for logistics space in the Venlo-Venray region is still high, despite the Covid-19
to the strong levels witnessed over the preceding crisis. Jan Krediet, a 3PL-er, has leased approx. 12,000 sq m of warehouse space at Trade
two-year period. Amongst the most notable deals Port West. Several new developments have been delivered this year. VidaXL has opened their
of 2020: JTI Ltd who took 550,000 sq ft at the second warehouse of 80,000 sq m at Trade Port Noord and with the addition of the new
refurbished Titan unit in Knowsley, North West building, they now have a total of 180,000 sq m of distribution space in the cross-border
Farmers Ltd snapped up the speculatively built e-commerce hotspot.
distribution warehouse Crewe 240 at Panattoni
Commercial Park. T. Take-up in the earlier part of ROTTERDAM In Q1 2020, take-up volumes were healthy, helped by transactions such as Odin
2020 was encouraging, just before the COVID-19 Warehousing leasing 24,000 sq m at the Maasvlakte. However, take-up decreased slightly in
pandemic hit the UK, and there were a number of Q2 as a result of the COVID-19 crisis, which pushed many occupiers into defensive stances. A
deals concluded on speculative warehouses. The rapid recovery is expected in the second half of 2020. Firstly, while the supply of industrial and
notable ones being: Kellogg’s taking 525,000 sq ft logistics space increased in 2019, it has stabilized in 2020. Demand for new industrial space
at Haydock 525 and data centre company Equinix, has also increased over the past year, as existing stock often fails to meet all occupiers ESG,
purchasing 200,000 sq ft at the Evolution scheme automation, robotic and storage requirements, and the needs of fast-growing e-commerce
in Salford, Manchester. demand in the region.
WEST MIDLANDS The Midlands accounted for
the largest share (34%) of UK take-up volumes,
with 6m sq ft taken-up over H1 2020, on deals
greater than 100,000 sq ft. This represents a
32% increase in activity over the first half of the
year. The East Midlands region took the lion’s
share of activity (78%), as the availability of
development plots bolstered activity for design
and build pre-lets. The West Midlands sub-region
recorded circa 1.3m sq ft of take-up in H1 2020.
Activity has been driven by the growth of online
commerce - with strong demand from parcel
couriers and 3PLs servicing online retailing and
the grocery sector, which is expected to remain
(strong) in the coming months.
MADRID In Q1, absorption reached 132,000 sq m FRANKFURT Due to COVID-19, a very weak second quarter was recorded;
,with occupier demand primarily focused on floor and the overall result for H1 2020 was take-up was around 56% down
plans of less than 15,000 sq m in the 1st and 2nd Y/Y. This was due not only to the general reluctance of occupiers, but the
zonal rings. Moreover, as the COVID-19 pandemic lack of large letting transactions resulting from limited availability. The
took grip of Europe, logistics companies have had largest transaction of the first half of the year was Wayfair’s 37,000 sq m
to adapt their own supply-chains. As a result, let, shortly before the lockdown. This took place in the Main-Kinzig-Kreis
there was an increase in the demand of logistics sub-market (10)., and was the only deal over 20,000 sq m recorded in H1.
spaces signed on short-term leases; usually for The second largest lease was 13,200 sq m, recorded in Pfungstadt.
one year or less. Absorption in Q2 amounted to
86,600 sq m, but the attitude of occupiers has been
“prudent” when regarding new decision making.
When the current climates cools, it is expected that
occupier sentiment will improve.13
Research & Forecast Report | Colliers International
EMEA | Q2
BERLIN After a strong start to 2020, the market slowed down slightly in
Q2, as the COVID-19 pandemic took hold. Overall, H1 2020 was slightly
below average, as a total of 161,800 sq m of industrial and logistics space
was transacted. The sub-market Umland Süd (9) saw the strongest take-
up volumes of all Berlin sub-markets. Most lettings were in the 3,001 to
10,000 sq m segment, with only two large leases of over 10,000 sq m
concluded - both of which were signed before the lockdown. The largest
lease concluded during Q2 included 6,500 sq m of logistics space signed
for by the e-commerce dealer, Flaschenpost, in the City South submarket
(4). Overall, the reluctance of occupiers to make decisions is noticeable,
but demand for logistics properties remains very high;. It is expected that
some leases have merely been postponed, not withdrawn.
WARSAW The city, comprising 3 warehouse zones, remains the largest
market for modern warehouse space in Poland. At the end of H1 2020,
the total supply here amounted to approximately 4.64 million sq m,
with developers having delivered an additional 371,600 sq m of space
to the market in the first half of 2020. Most of this new space -over
284,800 sq m - was delivered in the second quarter. Overall, Q2 2020
was characterized by lower demand for modern warehouse space,
with around 237,700 sq m transacted in Q2, compared to 306,200 sq
m in Q1. The largest transaction in Q2 was a 42,600 sq m lease, by a
confidential client at Panattoni Park, Pruszków IV. Vacancy at Q2-end
had subsequently increased ((up on 6.1% from Q1) reaching 7.2%.
BUDAPEST In Q2 2020, the newest phase of East Gate Business Park
(17,780 sq m), the new building at CTPark South (22,840 sq m), the Prologis
Harbor DC11 building (13,520 sq m) and the newest phase of Budapest Dock,
Szabadkikötő (10,000 sq m) were completed. Total demand amounted to
202,610 sq m in Q2 2020, which is 17% higher than the 4-year average
for Q2 volumes, of which 143,350 sqm comprised a net increase in demand
for space: New leases comprised 45.6% of take-up activity, pre-leases
19.6%;, expansions 5.6%. and renewals 29.2%,, The two largest transactions
in Q2 were: a renewal in Batta Park of 28,585 sq m and a pre-lease in
CTPark Budapest South for 28,460 sq m. The vacancy rate at Q2-end 2020
increased slightly to 2.59%, but only a marginal 0.45% increase (Y/Y).
BUCHAREST Gross take-up decreased by around 20% in H1 2020 -
down to around 87,000 sq m - which is nearly three times lower than
the figure seen in H1 2018. That said, the market remains vibrant, with
some logistics activities still driving ahead with expansion and new
projects. E-commerce is driving demand. However, pipelines have been
accordingly scaled back, with speculative developments placed on hold
until clearer economic conditions appear. The market vacancy rate is
thus in balance, estimated to stay in the 7-8% range in 2020, but up on
the 5% rate seen last year.14
Q2 | EMEA
Research & Forecast Report | Colliers International
OUTLOOK
Looking ahead, the GDP 2021 forecast Europe’s largest cities we expect demand
for the EEA30 is a very positive 6.1%, but will grow, as occupiers look for space
with very mixed levels of rebound forecast close to consumers. However, supply
by country, largely reflecting the depth is limited, so many occupiers will be
of the economic hit in 2020. Equally, to looking to repurpose existing buildings
achieve such a result, the pandemic must and other under-performing assets in
be continued to be managed effectively these locations. Underperforming “big
and there is need for a widespread vaccine box” retail units and retail parks - which
to enable a return to a new normality. are located advantageously to urban
The EU must prepare for an era without populations – are already being targeted
the UK and a trade-deal is still yet to be by logistics funds and developers,
negotiated, This runs concurrently with creating hybrid-solutions to capture
the US election in November, amidst growing consumer demand.
ongoing US-China “trade-war” tensions,
Finally, the global pandemic has
which continues to drag on the global and
highlighted the inherent fragilities with
European economy.
global supply-chains. Whilst a large
Although the record levels of proportion of low-cost production is set
Governmental fiscal stimulus have to remain in China and South-east Asia,
elevated public debt ratios, a low there is a growing case for the gradual
interest rate environment looks set to redeployment of resources to near-
stay, mitigating the potential negative shoring strategies as globalisation comes
downsides to government bond ratings. under geo-political pressure. Filling in
While there is much uncertainty over the some of the gaps to be created by a
impact that ‘turning off the furlough taps’ re-structuring of the automotive sector
will create regarding employment, current may enhance the need for alternative
forecasts point to a strong rebound in employment sources.
employment, both at country and city
While occupier conditions have already
level in 2021.
begun transitioning to a more neutral
Furthermore, with the exponential stance, landlord-favourable markets’
growth in e-commerce sales throughout share will stay at around 40% by H1
lockdown – which is expected to continue 2021. Overall, the European prime rental
- occupier demand for logistics space index growth will slow, but the large
will continue to grow, especially for proportion of core markets with low
large floorplates capable of integrating vacancy and limited quality stock will
automation and robotics in peripheral maintain some upward pressure on prime
city zones. In urban-core locations of rents in the year ahead.
FIGURE 13:
I&L RENT INDEX 120
2007=100 115
110
Rent Index
105
100
95
90
85
80
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Sources: Figure 13: Colliers InternationalFOR MORE INFORMATION
Peter Kunz Damian Harrington Lewis Rapley
FOR
Head of MORE
Industrial &INFORMATION
+49 69 719192-23
Logistics | EMEA Director, Head of Research | EMEA
+44 7867 360489
Research Analyst | EMEA
+44 20 7344 6798
peter.kunz@colliers.com damian.harrington@colliers.com lewis.rapley@colliers.com
Karel Stransky Istvan Toth
Director | EMEA Corporate Solutions Associate Director, Research | EMEA
+420 603 457 242 +44 20 7487 1899
karel.stransky@colliers.com istvan.toth@colliers.com
This report gives information based primarily on Colliers International data, which may be helpful in anticipating trends in the property sector. However, no warranty is given as to the accuracy of, and no liability for
negligence is accepted in relation to, the forecasts, figures or conclusions contained in this report and they must not be relied on for investment or any other purposes. This report does not constitute and must not be treated
as investment or valuation advice or an offer to buy or sell property.
Colliers International Group Inc. (NASDAQ: CIGI) (TSX: CIGI) is top tier global real estate services and investment
management company operating in 69 countries with a workforce of more than 12,000 professionals. Colliers is the fastest-
growing publicly listed global real estate services and investment management company, with 2017 corporate revenues of
$2.3 billion ($2.7 billion including affiliates). With an enterprising culture and significant employee ownership and control,
Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide, and through
its investment management services platform, has more than $20 billion of assets under management from the world’s
most respected institutional real estate investors.
Colliers professionals think differently, share great ideas and offer thoughtful and innovative advice to accelerate the success
of its clients. Colliers has been ranked among the top 100 global outsourcing firms by the International Association of
Outsourcing Professionals for 13 consecutive years, more than any other real estate services firm. Colliers is ranked the Colliers International
number one property manager in the world by Commercial Property Executive for two years in a row.
50 George Street
Colliers is led by an experienced leadership team with significant equity ownership and a proven record of delivering more
than 20% annualized returns for shareholders, over more than 20 years.
London W1U 7GA
For the latest news from Colliers, visit Colliers.com or follow us on Twitter: @Colliers and LinkedIn.
© 2020. All rights reserved.
Research & ForecastingYou can also read
