BNP Paribas Real Estate publishes logistics market figures for the first quarter of 2023 - Low take-up despite high demand on the Frankfurt logistics market

Frankfurt am Main, 25 April 2023 - The Frankfurt logistics market got off to a moderate start in 2023 with a registered take-up of 44,000 sqm. The current result is therefore around 6% below the equally weak prior-year quarter. Meanwhile, the long-term average was undercut by 62 %. This is the result of an analysis by BNP Paribas Real Estate.

"Although the subdued start to the year can be attributed to a certain extent to the current economic uncertainties and the associated somewhat more cautious attitude of some companies, this should not be seen as the sole factor behind the slow momentum.  In the core area in particular, the lack of space continues to be the dominant issue on the market. In addition, the high level of rents means that more tenants are exercising their contractual options instead of moving to new space. Accordingly, the fluctuation and consequently the visible take-up of space are lower than in previous years," says Christopher Raabe, Managing Director and Head of Logistics & Industrial at BNP Paribas Real Estate GmbH. Both prime and average rents have remained at a stable high level of €7.30/m² and €5.80/m² respectively since the end of 2022.

No major deals in the first quarter

The fact that take-up was comparatively low in the first quarter is partly due to the fact that, for the first time in many years, no agreements were signed in the segment above the 12,000 m² mark at the start of the year. Although the medium and small space segments predominantly recorded below-average results, the overall declines are still within the limits of the usual annual fluctuations. A shift in the demand groups for space has recently become apparent. While retail companies, particularly from the B2C grocery and online retail segments, were the biggest demanders of space in recent years, classic industrial requests are now increasingly taking centre stage again. This is also reflected in the distribution of take-up by sector, which is currently led by logistics service providers (36%) and industrial companies (33%). Meanwhile, retail companies only account for 21% of the volume.

Prospects

"Even if this is not directly reflected in take-up, demand for space remains at a high level despite the significant deterioration in the economic outlook so far this year. Not least because many companies have already put their supply chains to the test and optimised them as a result of the coronavirus pandemic, foreign trade statistics have recently recorded a significant increase again. This is a positive sign for the rest of the year, especially for global gateways such as Frankfurt. Nonetheless, the most likely scenario at present is that take-up will be below average at the end of the year in a long-term comparison, as the shortage of supply continues to dominate the market. Meanwhile, both average and prime rents are likely to continue to rise slightly," says Bastian Hafner, Head of Logistics & Industrial Advisory at BNP Paribas Real Estate GmbH.

Low take-up despite high demand 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
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 5,300 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.

As part of its commitment to sustainable cities, BNP Paribas Real Estate aims to play a leading role in the transition to creating more sustainable real estate that is low-carbon, resilient, inclusive and conducive to well-being. To this end, the company has developed a CSR policy with the following four objectives: to improve the economic performance and use of buildings in an ethical and responsible manner; to enable a low-carbon transition and reduce the environmental footprint; to ensure the development, engagement and well-being of employees; and to be an active player in the property sector, building and promoting local initiatives and partnerships.

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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 clients, companies and institutional clients are served by around 6,000 employees nationwide in all relevant economic regions. www.bnpparibas.de