BNP Paribas Real Estate publishes logistics market data for 2022 - Logistics lettings market has a strong year

Frankfurt am Main, 20 January 2023 - The German logistics markets closed 2022 with a strong result overall. Although take-up of 8.5 million m² (including owner-occupiers) fell short of the previous year's record result by around 7%, this was only the second time that the 8 million m² mark was exceeded. Accordingly, the long-term average was also exceeded by a quarter. The German logistics markets are thus once again demonstrating their high level of resilience in times of growing geopolitical and economic uncertainty. These are the findings of an analysis by BNP Paribas Real Estate.

Even though the overall result was once again outstanding, market activity in the past year was nevertheless characterised by a certain dichotomy. Driven by a large number of major deals, take-up after the first six months totalled 4.8 million m² (Q1: 2.3 million m²; Q2: 2.5 million m²), by far the best half-year result ever recorded. In contrast, results for the third (1.8 million m²; -8%) and fourth quarters (1.9 million m²; -3%) were both slightly below the quarterly average of the past five years. "Although the looming recession and the resulting significant cooling of economic sentiment certainly played a certain role in the somewhat slower momentum at the end of the year, the acute shortage of supply remains the main inhibiting factor. Unlike a few quarters ago, this is no longer limited to the major conurbations. Accordingly, we are increasingly seeing tenants exercising their options to extend their leases. The noticeable rise in rents, particularly in the new-build segment, is likely to further encourage many companies in this decision," explains Christopher Raabe, Managing Director and Head of Logistics & Industrial at BNP Paribas Real Estate GmbH.

Meanwhile, the proportion of new builds remains high at around 65%, reflecting the almost nationwide shortage of supply in existing properties. Accordingly, a large number of the major transactions registered last year were realised in newly developed space. Although a number of larger production facilities of industrial companies were included in the result, the proportion of owner-occupiers is significantly lower than the average of previous years at around 28%. Apart from the industrial sector, there are fewer and fewer users who have properties built on their own.

Large deals primarily in peripheral locations

Like the market as a whole, the major logistics regions (Berlin, Düsseldorf, Frankfurt, Hamburg, Cologne, Leipzig, Munich) also achieved their second-best result ever recorded, with take-up totalling 3.04 million m². The Berlin logistics market played a significant role in this result, contributing 1.02 million m². The German capital was thus the first German market ever to break the 1 million m² barrier. This eternal result was mainly made possible by the Tesla Gigafactory, which contributed 327,000 m² to the result after final planning permission was granted at the beginning of 2022. But even without Tesla, take-up totalled an impressive 697,000 m², which would also be a record. While Leipzig (398,000 m²; +41 % compared to the 10-year average) and Cologne (256,000 m²; +14 %) also reported significantly above-average annual results, the year was more mixed in the other markets. At 347,000 m², Frankfurt even recorded the lowest result of the past ten years. The declines in Munich (226,000 m²; -19 %) and Düsseldorf (257,000 m²; -11 %) were much more moderate.

Hamburg recorded an average take-up of 530,000 m². As most of the major deals in the past year were in peripheral locations, around 5.46 million m² of take-up was accounted for by locations outside the major logistics regions, which roughly corresponds to the record result from 2021.

Low vacancy rate and high construction costs drive rent levels

The combination of the sometimes acute shortage of supply and a noticeable increase in construction costs has caused rents to rise significantly across Germany over the past twelve months. The average prime rent in the top markets has risen by 13% within a year to €7.33/m². Munich remains the most expensive market, where rents currently stand at €9.00/m². However, higher values have already been recorded in individual lease renewals. The increase in average rents nationwide averages around 10% to €5.86/m².

Take-up of space expected to return to long-term level in 2023

"Despite the difficult economic conditions, the German logistics market was in very good shape overall last year. Nevertheless, a slight levelling off in take-up was evident in the second half of the year. This situation is likely to continue in the coming months. Against the backdrop of more expensive financing conditions and rising construction costs, it remains to be seen whether property developers will maintain the high pace of space production seen in recent years. Although some companies are likely to be somewhat more cautious about renting new space at the start of the year due to the emerging slight recession, the shortage of supply is likely to intensify further. Against this backdrop, it seems most likely from today's perspective that take-up in 2023 will return to the long-term average level of around 7 million m²," says Bastian Hafner, Head of Logistics & Industrial Advisory at BNP Paribas Real Estate GmbH, summarising the outlook.

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 4,500 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.

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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