BNP Paribas Real Estate publishes logistics market figures for the fourth quarter of 2022 - Lack of supply determines the Frankfurt logistics market

Frankfurt, 25 January 2023 - The Frankfurt logistics market in 2022 was significantly shaped by an insufficient supply of space. At 347,000 m², a comparatively low take-up of space was achieved, which is almost 36% below the ten-year average. This is the result of an analysis by BNP Paribas Real Estate.

"After the previous year's exceptional record result of 875,000 m², there was not enough space available within the market area in 2022. This lack of supply was not made up for over the course of the past year. Nevertheless, there is certainly strong demand, which extends across both central and peripheral locations and all sizes of space. There is a clear surplus in demand, particularly for properties available at short notice and with short to medium lease terms," explains Christopher Raabe, Managing Director and Head of Logistics & Industrial at BNP Paribas Real Estate GmbH. The rent level has risen as a result. The prime rent is €7.30/m², which corresponds to an increase of 3%, and the average rent has risen by around 5% to €5.80/m² over the course of the year.

High take-up in the small-space segment

The take-up of space shows a rather unusual distribution across the individual size categories for Frankfurt. Smaller contracts of up to 5,000 m² recorded the same high take-up in absolute terms as in the previous year, accounting for just under 43 % of the result. The usually strong segment of large contracts over 20,000 m² recorded its lowest result in absolute terms in the last ten years, after reaching a record level in the previous year. In terms of sectors, logistics service providers accounted for more than half (a good 54%) of take-up, with the two major agreements signed by B+S Logistik in Hammersbach (40,000 m²) and DHL in Cargo City Süd (28,000 m²) making a significant contribution. Retail and manufacturing companies remain below their long-term averages with shares of just under 20% and around 10% respectively. Due to the low availability of space, the proportion of new builds, at one third of take-up, is low by long-term standards.

Prospects

"Demand in the Frankfurt logistics market is expected to remain high in 2023, with a significant excess demand. The extent to which this can be reflected in corresponding take-up depends on various factors. Due to rising rents and the low supply of space, it can be observed that users - especially logistics service providers - are increasingly exercising their lease options and extending existing contracts, which has a dampening effect on take-up. It can be assumed that the general conditions with high inflation, rising interest rates and increasing construction costs will hardly change for the time being. On the supply side, project developers are also adopting a wait-and-see attitude due to the current economic environment, meaning that some planned developments are being postponed for the time being. In conjunction with a shortage of building land and low availability in the existing stock, a further increase in rents is therefore to be expected," says Bastian Hafner, Head of Logistics & Industrial Advisory at BNP Paribas Real Estate GmbH.
Supply shortage determines 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
Melanie Engel - Tel: +49 (0)40-348 48-443, Mobile: +49 (0)151-117 615 50, melanie.engel@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 30 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.

Further information: www.realestate.bnpparibas.com/

About BNP Paribas in Germany

BNP Paribas is a leading European bank with an international reach. The BNP Paribas Group has been active in Germany since 1947 and has successfully positioned itself in the market with 12 business units. Private, corporate and institutional clients are served by around 6,000 employees nationwide in all relevant economic regions. www.bnpparibas.de