BNP Paribas Real Estate publishes data on the logistics market for the first quarter of 2024 - Berlin logistics market with year-on-year increase in take-up

The Berlin market for logistics properties recorded take-up of 70,000 m² in the first quarter of 2024, which is around 30% below the long-term average (excluding the take-up of Tesla 2022). However, a significant increase in earnings of 27% was recorded compared to the same quarter of the previous year. This is the result of an analysis by BNP Paribas Real Estate.

"The relatively weak economic environment overall is clearly reflected in the take-up of space in the top logistics markets. Some companies are still looking into renting new space at an early stage and are entering into contract negotiations for new leases. However, it can also be observed that the issue of extending rental agreements is becoming increasingly important. Particularly in light of the significant rise in rents since the coronavirus pandemic and the fact that adequate space is often not available at short notice, tenants are increasingly opting to extend their leases, thereby contributing to less fluctuation than in previous years. In addition, more space is currently coming onto the market for subletting and re-letting unneeded or over-rented space," explains Christopher Raabe, Managing Director and Head of Logistics & Industrial at BNP Paribas Real Estate GmbH.

Compared to the fourth quarter of 2023, the prime rent increased by €0.20/m² to currently €8.20/m². The average rent increased slightly by € 0.10/m² to currently € 7.00/m².

No take-up of space over 12,000 m²

To date, no major lettings over 12,000 m² have been registered. In contrast, the above-average take-up of space (30,000 m²) in the segment of medium-sized space between 8,000 and 12,000 m² (Ø10 years: a good 18,000 m²) is remarkable. Although the segment of small spaces up to 5,000 m² achieved an above-average market share of 46 %, it is below the long-term average in absolute terms.

In terms of sector distribution, retail companies account for just under 47 %. Nevertheless, two of the three largest leases were signed by retail companies, including the largest lease in terms of space by pharmaceutical wholesaler Alliance Healthcare for around 11,800 m².     

In comparison to last year and the long-term average (Ø10 years: 19 %), logistics service providers (just under 7 %) have been underrepresented to date.

Prospects

The weak economic situation was also reflected in the Berlin market for logistics space in the first quarter of 2024. While the global economy has already recovered much more strongly, the economy in the eurozone and Germany is also likely to slowly pick up in the coming quarters. As a result, the demand for space from logistics service providers in particular is likely to increase over the course of the year.

Although a significant recovery in demand for space is expected in the coming months, it seems unlikely that the long-term average in terms of take-up (Ø10 years: 495,000 m²) will be reached by the end of the year. This is because structural reasons, such as the limited supply of modern space and a higher proportion of lease extensions and subletting, are also limiting a significant increase in take-up. Nevertheless, a result above that of the previous year seems realistic.

"The combination of a higher supply of space and a lack of short-term availability of logistics space, particularly in city centre locations, suggests that prime and average rents will remain constant or increase slightly over the course of the year," says Bastian Hafner, Head of Logistics & Industrial Advisory at BNP Paribas Real Estate GmbH.

Link to the market report: Berlin logistics property market Q1 2024 | BNP Paribas Real Estate

Press contact:
Chantal Schaum - Tel: +49 (0)69-298 99-948, Mobile: +49 (0)174-903 85 77, chantal.schaum@bnpparibas.com
Viktoria Gomolka - Tel: +49 (0)69-298 99-946, Mobile: +49 (0)173-968 60 86, viktoria.gomolka@bnpparibas.com

About BNP Paribas Real Estate

BNP Paribas Real Estate is a leading international property services provider that offers its clients comprehensive services in all phases of the property cycle: Transaction, Consulting, Valuation, Property Management, Investment Management and Property Development. With 5,000 employees, the company supports owners, tenants, investors and the public sector in their projects thanks to local expertise in 24 countries (own locations and alliance partners) in Europe, the Middle East and Asia. BNP Paribas Real Estate is part of the BNP Paribas Group, a leading global financial services provider.

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