BNP Paribas Real Estate publishes logistics market figures for the 4th quarter of 2023 - Berlin logistics market

Berlin logistics market: weak result in 2023 despite stronger second half of the year

The Berlin logistics market was barely able to develop any momentum in the first half of 2023. It was not until the second half of the year that transaction activity returned to a significantly higher and generally more stable level. Nevertheless, the result of 350,000 m² in total is well below the 10-year average (-29%). This is the result of an analysis by BNP Paribas Real Estate.

"The ongoing shortage of supply had a dampening effect on take-up. The low availability of space and the resulting steady rise in rents in the Berlin market area led many companies to opt for a lease extension. A new lease is out of the question for them due to a lack of alternatives. Added to this is the weak economic development in 2023, which stood in the way of a further revival in demand," explains Christopher Raabe, Managing Director and Head of Logistics & Industrial at BNP Paribas Real Estate GmbH.

Owner-occupiers were very cautious in 2023. Although they only have a long-term average market share of just under 15% in Berlin, they were only able to generate around 3% of take-up last year. Modern space continues to be very popular with users. Their share amounts to an above-average 56 % in a long-term comparison. However, this space is in short supply, particularly in city centres, which stands in the way of higher take-up.

Logistics service providers lead by far

It is not possible to generalise letting activity by size category in 2023, as take-up increased not only in the small segment below 3,000 m² compared to 2022 (+37 %), but also in the medium segment between 8,001 and 12,000 m² (+4 %). Above-average take-up of around 101,000 m² (+2 %) and 70,000 m² (+13.5 %) is registered for both size categories compared to the 10-year average. Their market shares are 29% and 20% respectively.

Large transactions above the 20,000 m² mark also account for a high market share of 28%. As expected, the outstanding result from the previous year was not nearly equalled.

Logistics service providers are by far the most important sector with a share of almost 51%. With around 180,000 m² of take-up, they fell short of the high level of the two previous years, but exceeded the long-term average by 19.5 %. They are also responsible for the three largest contracts in the market. Following their expansionary course in the years 2020 to 2022, demand pressure from retailers has eased considerably. Although they are still the second strongest sector, they are around 46% below the long-term average.

Prospects

"In 2023, letting activity on the Berlin logistics market was overshadowed by economic developments and the ongoing supply shortage. This constellation is likely to persist in the short term and have a dampening effect on demand in H1 2024. However, after a solid second half of 2023, the signs are pointing to a recovery over the course of 2024. The German economy is likely to pick up speed and give the logistics market a boost," says Bastian Hafner, Head of Logistics & Industrial Advisory at BNP Paribas Real Estate GmbH.

On the demand side, there are many indications that the current improvement in consumer sentiment and rising propensity to buy will provide positive impetus for retail companies. As a result, demand for space in this important sector is expected to increase again in the growing metropolitan region of Berlin. Logistics service providers and industrial/manufacturing companies are also expected to increase their demand in response to the renewed extensive economic growth.

On the supply side, there is unlikely to be any relief, particularly in city centre locations, meaning that lease extensions will remain an issue. Nevertheless, take-up is likely to return to the long-term average. Given the lack of available space, particularly in central locations, prime and average rents will continue their growth trend.  

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

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