BNP Paribas Real Estate publishes logistics market figures for the first quarter of 2023 - Leipzig logistics market: Low supply of space limits the market

The Leipzig logistics market achieved take-up of 44,000 m² in the first quarter, which is below both the previous year's result (-51%) and the ten-year average (-14%). These are the findings of an analysis by BNP Paribas Real Estate.

"While high take-up was already achieved at the start of the year in the two previous years thanks to large-scale deals, no contract above the 20,000 m² mark has yet been signed, which essentially explains the lower result," says Christopher Raabe, Managing Director and Head of Logistics & Industrial at BNP Paribas Real Estate GmbH. "Despite the sometimes difficult economic conditions, demand is at a stable high level. However, the extensive market activity of recent years has led to significant existing and new space being absorbed by the market and supply being minimised accordingly." Prime and average rents had already risen to EUR 5.20/m² (+12% compared to Q1 2022) and EUR 4.50/m² (+11%) respectively by the end of 2022. However, asking rents for new-build properties are already at a higher level.

Logistics service providers dominate the sector distribution of take-up in the first quarter with a share of almost 61 %. Two deals from this category in particular had a significant impact here: one in Halle with 14,700 m² and the other in the north of Leipzig with 9,500 m². While manufacturing companies account for 25 %, retail companies have so far been underrepresented with a good 14 %.

The distribution across the individual size categories also shows a picture that is still untypical for the Leipzig market. While demand is generally quite broad and evenly distributed across the individual space segments, this is not yet reflected at present - with around 44 % in the 8,000 to 12,000 m² category and 34 % with contracts between 12,000 and 20,000 m².

The large-scale supply will be expanded in the coming quarters by speculative projects under construction. Due to a lack of alternatives, these new-build spaces are often fully let before completion.

"As demand remains high, take-up is likely to pick up more strongly over the course of the year. A brightening economic outlook in conjunction with overarching processes such as the adjustment of supply chains and the restructuring of individual sectors lead us to expect corresponding market activity. However, this requires sufficient and short-term availability of large-scale and modern halls, which is currently almost non-existent. Particularly in the case of existing space, such requests are not matched by sufficient supply. However, the supply-demand ratio is likely to improve in the second half of the year as properties already under construction progress. The noticeable increase in construction and financing costs in the past year, new requirements regarding the implementation of ESG criteria and the overall limited supply of space suggest that the rent level will continue to rise in the future, both at the peak and on average in the market," says Bastian Hafner, Head of Logistics & Industrial Advisory at BNP Paribas Real Estate GmbH.

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

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