Logistics market only just misses previous year's letting record - take-up for the year as a whole again exceeds the eight million m² mark

FRANKFURT, 16 FEBRUARY 2023 - Around 8.5 million m² was taken up on the German market for warehouse and logistics space in 2022. This fell just two per cent short of the previous year's record figure of 8.67 million m². However, the five-year average was exceeded by 19 per cent and the ten-year average by as much as 33 per cent.

However, the market lost momentum towards the middle of the year, with take-up falling to around the level of the five-year average: At 1.92 million m², take-up in the fourth quarter was only slightly higher than in the third quarter, but well below the results from the first half of the year of 2.39 and 2.42 million m² respectively.

Sarina Schekahn, Head of Industrial Leasing JLL Germany: "Demand for space remains high. Many companies are expanding their production, storage and distribution capacities in Germany in order to be less dependent on global developments. However, two factors are slowing down the market: There is a lack of modern logistics space and land available at short notice in a number of regions. In addition, numerous developers are holding back on the construction of speculative properties due to the high financing and construction costs. The lack of supply is causing problems for the market." Schekahn therefore assumes that take-up of space is likely to fall back to the level of 2016 to 2020 in the coming years.

Take-up in the Big 5 exceeds five-year average by 16 per cent

Around 2.36 million m² of space was taken up in the five major metropolitan areas (Berlin, Düsseldorf, Frankfurt, Hamburg and Munich) last year. This is only three per cent less than the previous year's record high and 16 per cent above the five-year average. This result is largely due to the high take-up of space in the Berlin region, characterised by the relocation of Tesla in Grünheide, which alone accounted for 327,000 m² of space in the figures - albeit only with the subsequent granting of planning permission. A total of almost 1.12 million m² was taken up in the region, which is almost double the record result from the previous year (616,000 m²). Such a high figure has not yet been achieved in any of the metropolitan areas. So far, only the Ruhr region has surpassed the million mark in 2016 with take-up of 1.05 million m².

Berlin is followed by Hamburg (475,000 m²; minus 25 per cent) and Frankfurt (322,000 m²; minus 54 per cent), with a clear gap in terms of take-up and significant year-on-year losses. Apart from Berlin, only fourth-placed Düsseldorf (242,000 m²; up one per cent) was able to exceed the previous year's result. The least amount of space was taken up in Munich with 198,000 m² and a decline of 19 per cent.

Most space was taken up by companies from the transport, traffic and warehousing sector (34 per cent), followed by retail companies (29 per cent) and industrial companies. The latter were able to increase their share of total take-up from 19 per cent in 2021 to 27 per cent. In addition to the Tesla relocation, this also includes the start of construction of a factory for the production of residential buildings in timber construction by Nokera in Möckern (Saxony-Anhalt).

After a high completion volume of 835,000 m² was recorded in the first half of 2022, a further 530,000 m² was added in the second half of the year. This means that the volume of new construction more than doubled year-on-year. The largest completions were in the Berlin region, followed by Hamburg. Almost another million square metres are currently under construction in the five conurbations. Of this space, 60 per cent has already been let or is being built for owner-occupiers. With 300,000 square metres each under construction, Berlin and Hamburg are also leading the way.

Driven by the shortage of space and the rise in construction costs, prime rents for warehouse space of 5,000 m² or more rose in all Big 5 regions last year and are now above the seven-euro mark. The strongest increase of 40 per cent to 10.50 euros/m² per month was recorded in Munich. Prime rents also rose considerably in Berlin (EUR 7.50/m²; up 36 per cent), Düsseldorf (EUR 7.75/m²; up 29 per cent) and Hamburg (EUR 8.00/m²; up 23 per cent). In Frankfurt, the increase was comparatively moderate at twelve per cent to EUR 7.30/m². "Prime rents are also likely to continue to rise in 2023, as the logistics market is currently an absolute landlord's market. As long as we experience rising interest rates and high inflation, we expect rents to grow by at least five to ten per cent per year," says Schekahn.

E-commerce dominates transactions outside the Big 5

Around 6.18 million m² were transacted outside the five major metropolitan areas last year. This almost equalled the previous year's figure of 6.25 million m² and exceeded the six million m² mark for the second time. The five-year average was exceeded by a fifth. "We are currently observing new location trends: B-locations have now become A-locations, meaning that markets outside the Big 5 are also benefiting from the high demand," says Schekahn.

While companies from the transport, traffic and warehousing sectors were responsible for almost 38 per cent of take-up, retail companies accounted for 28 per cent and the industrial sector for 26 per cent. The four largest transactions came in the first half of the year: online retailer Amazon rented a logistics centre of around 225,000 m² in Erfurt and began construction of a 189,000 m² property in Kaiserslautern. The largest transaction from the second half of the year is in fifth place for the year as a whole: a retail company rented a 76,000 m² logistics centre in Hainichen (Saxony).

In total, 72 per cent of take-up was in new builds and project developments; the five-year average is 74 per cent. The high level underlines the sustained demand on the market.

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Contact:
Lars Frensch
Senior Manager Corporate Communications JLL Germany

Jones Lang LaSalle SE
Bockenheimer Landstraße 55, 60325 Frankfurt am Main, Germany
T +49 (0)151 6502 83 40

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