Floor Area Ratio (FAR) for warehouses

Definition and legal basis: What is the FAR?

The Floor Area Ratio (FAR) is one of the central indicators in German building law for determining the extent of structural use. It is anchored in the Building Use Ordinance (§ 20 BauNVO) and specifies how many square metres of floor area per square metre of land area are permissible.

In contrast to the Ground Area Ratio (GAR), which only regulates the "footprint" of the building (the sealed area), the FAR defines the sum of the areas of all full floors. It thus controls the density of the development upwards or the volume.

The basic formula is:

FAR = Total gross floor area (of all full stories) / Size of the building plot

A simple calculation example: A total of 12,000 m² of floor space may be built on a 10,000 m² logistics site with a fixed FAR of 1.2.

The special feature of the FAR in logistics

While a high FAR (e.g. 2.0 or higher) is often easily achieved in residential or office construction by the construction of high-rise buildings, logistics properties are subject to  different physical and operational laws.

Classic logistics halls are usually single-storey ("single story") in order to ensure an efficient flow of goods without vertical breaks. Here, the challenge is often not to exhaust the FAR, but to balance the relationship between the built-up area (hall) and the necessary outdoor areas (truck yards, manoeuvring areas, sprinkler tanks).

In commercial areas and industrial areas, where logistics is usually located, the BauNVO typically allows FAR values between 1.2 and 2.4. For a classic "big box" hall, however, a FAR of over 0.8 is often difficult to realize, as the FAR (usually 0.8) limits the expansion and only one floor is available.

Calculation in detail: What counts as floor area?

For project developers and contract logistics specialists, the decisive factor is which components are included in the calculation. Not every level is automatically a full floor.

• Full storeys: Only these count as part of the FAR. The definition of a full storey varies depending on the state building code of the federal states, but usually depends on the clear height and the elevation from the terrain.
• Mezzanine levels: In contract logistics, mezzanines are often used for value-added services (VAS) or order picking. If the mezzanine is designed in such a way that it is considered a full floor under building law (e.g. due to the corresponding ceiling height and area > 2/3 of the floor area), it flows fully into the FAR. If it is a pure storage level (shelving platform) without recreation rooms and below the full-storey threshold, it often does not belong  to the FAR.
• High-bay warehouse: A fully automated high-bay warehouse with a height of 40 meters often counts as only one floor under building law, even though it has the volume of a high-rise building. Here, the FAR is less restrictive than the maximum building height set in the development plan.

FAR vs. GAR: The conflict in logistics real estate

In the practice of logistics development, the interaction between FAR and GAR is the critical path.

• Scenario standard hall: A 20,000 m² plot has a GAR of 0.8 and a FAR of 1.6.
• Maximum development: 16,000 m² (by GRZ 0.8).
• Theoretically possible floor area: 32,000 m² (by FAR 1.6).
• Problem: Since the hall is only single-storey, only 16,000 m² GFA will be realized. Only half of the FAR is used (0.8). The property is "underused" in terms of the permissible building mass.

For investors, this means that in areas with a high permissible FAR, a single-storey construction method is often a waste of potential building rights, which makes the land price more expensive in relation to the usable area.

Trend reversal: Multi-level logistics and brownfields

Due to a shortage of space in metropolitan areas, the FAR is gaining massively in importance in logistics. We see a trend towards:

1. Multi-story warehouses: In cities such as Hamburg, Berlin or Munich, two-storey logistics facilities are being built, which can also be accessed by 40-tonne trucks on the upper floor. Here, a FAR of 1.6 to 2.0 is actually exhausted.
2. Brownfield development: On formerly industrially used areas, there are often development plans with very high FAR (industrial wastelands). These locations are predestined for multi-storey concepts in order to compensate for the high demolition and renovation costs with more rental space.

Questions and Answers (FAQ) on the FAR in Logistics

Question: Can the FAR be exceeded by ancillary facilities?

Answer: Yes, under certain conditions. In commercial areas, ancillary facilities (such as gatehouses or technical installations) may be disregarded when determining the floor area, provided that the development plan or the state building code allows this (privilege under § 20 para. 4 BauNVO).

Question: How do office buildings affect the FAR?

Answer: Office extensions are usually multi-storey (2-4 floors). They are an effective means of making better use of the Floor Area Ratio of a logistics site without curtailing the logistical traffic area. They increase the average FAR of the overall project.

Question: Does an external storage facility (outdoor storage facility) count in FAR?

Answer: No. The Floor Area Ratio refers to buildings. However, an outdoor storage facility burdens the FAR (floor area ratio) or the FAR II (ancillary facilities), but does not count as floor area.

Question: What influence does the FAR have on the price of land?

Answer: Directly proportional. A plot of land with FAR 2.4 is (theoretically) more valuable than one with FAR 1.0, as more rentable space can be created. In logistics, however, this only applies to a limited extent: If operational logistics (truck turning radii) prevent dense development, the high FAR is of no use to the user – but it is of no use to the seller in his argumentation.

Strategic use for contract logistics companies

For contract logistics companies, which often offer complex services (co-packing, returns management), the FAR is an indicator of expansion potential.

It is worth taking a look at the development plan before renting:

• Reserve capacity: Is the realized FAR (existing building) significantly below the permissible FAR?
• Expansion option: If so, mezzanines could be installed at a later date or an office head building could be added without having to buy new land.

This is an essential aspect in the asset management of logistics real estate in order to increase the value of the property over its life cycle.

Conclusion and practical tip

The number of floor areas in the logistics sector is changing. In the past, it was often a negligible factor in the classic "greenfield hall" because land sealing was the limiting factor, but today it is becoming a key factor for urban logistics concepts.

Practical tip for users and developers: Always check the difference between the realized and permissible FAR for existing properties. This "delta" often hides the potential for approvable expansions through shelving platforms or extensions, which can be decisive for the profitability of the location, especially in the case of long-term leases in contract logistics.