BNP Paribas Real Estate publishes logistics market figures for the third quarter of 2023 - Lack of space inhibits take-up on the Frankfurt logistics market

After the first nine months of 2023, take-up on the Frankfurt warehouse and logistics market totalled 245,000 sqm. Although this result is only around 16% below the previous year's figure, it is around 39% below the long-term average. This is the result of an analysis by BNP Paribas Real Estate.

This lower result is primarily due to the severe shortage of vacant warehouse and logistics space in the Frankfurt market area. The shortage of space is also reflected in the share of new builds, which is significantly below the long-term average (Ø 10 years: 54 %) at just 37 %. "As a result, many users are extending their existing leases and there is little to no movement in the market. Demand for space remains strong, but many companies are taking longer to consider their decisions than in the previous year," explains Christopher Raabe, Managing Director and Head of Logistics & Industrial at BNP Paribas Real Estate GmbH.  As a result of this excess demand and pressure, both prime and average rents have risen compared to the previous quarter and are currently quoted at €7.75/m² and €6.50/m² respectively.

A major deal for over 20,000 m²

With the Mercedes-Benz deal in Trebur for around 21,000 m², only one major deal was recorded in the third quarter, which is a very low figure in a long-term comparison. The large-volume segment over 20,000 m² has therefore only contributed just under 9% to take-up to date, which is well below the long-term average (average 10 years: 31%). While take-up in the small size categories is close to the long-term average, the two medium size categories (5,000 m²-8,000 m² and 8,000 m²-12,000 m²) account for significantly above-average market shares of 20 % and 29 % respectively. Logistics service providers, which have usually dominated the market in recent years (Ø 10 years: 42 %), still contribute the most to take-up with a good third, albeit significantly less than usual. Even retail companies, with a strong long-term average market share of around 29 %, only account for 16 %. In contrast, industrial and manufacturing companies achieved the highest market share of the last 10 years at 32%.

"Despite a change in the economic situation, demand for warehouse and logistics space remains at a high level. Nevertheless, this can only be met to a limited extent by corresponding take-up due to the low fluctuation and shortage of space. It can therefore be assumed that the full-year result will be below the long-term average. Due to the sharp rise in production costs and the difficulty and increased cost of obtaining debt capital, a further decline in construction activity, particularly speculative activity, is to be expected. This is likely to exacerbate the supply/demand situation. From today's perspective, the current persistently high inflation, rising key interest rates and a further shortage of building land will lead to further increases in prime and average rents in the short and medium term. Particularly in locations close to cities and motorways, further significant price increases are to be expected," says Bastian Hafner, Head of Logistics & Industrial Advisory at BNP Paribas Real Estate GmbH.

Lack of space inhibits take-up on the Frankfurt logistics market | 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 5,300 employees, the company supports owners, tenants, investors and the public sector in their projects thanks to local expertise in 23 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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About BNP Paribas in Germany

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