BNP Paribas Real Estate publishes data on the logistics market for the 3rd quarter of 2023 - Overall lively market activity on the nationwide logistics market not yet reflected in high take-up figures

In the current year, the nationwide logistics market has faced the challenge of having to build on the two record results from the previous year's periods. Even though it was unable to do so with warehouse and logistics space take-up totalling around 4.5 million m² after the first three quarters (-32% compared to Q1-3 2022), the demand situation can be considered somewhat more subdued due to the economic and geopolitical uncertainties, but still good overall (only -12% compared to the ten-year average). The most important determinants that had a limiting effect on the overall result for take-up primarily include the challenging conditions for project developments, the further shortage of available space in and outside the major logistics regions and the increasing importance of contract extensions in existing properties. BNP Paribas Real Estate has analysed how these drivers have affected the individual sectors, locations and rents based on the key figures for the nationwide logistics market in the first nine months.   

Automotive sector boosts letting activity with major deals, logistics service providers strongly represented at major locations

A differentiated picture emerges above all in terms of the demand impetus from the various user groups: While retail companies have been the main drivers of take-up in recent years due to the steadily increasing importance of the e-commerce sector, they are currently only in third place in the current sector ranking with just under 19%. Companies from the automotive sector, on the other hand, are currently generating strong letting momentum, with Daimler Truck in Halberstadt (260,000 m²), Volkswagen in Salzgitter (210,000 m²), another well-known car manufacturer in Bitterfeld-Wolfen (86,000 m²) and BMW in Pilsting (73,000 m²) accounting for the four largest deals of the current year. Driven by this, the industrial and manufacturing sector was able to equalise its already very high result from the previous year, which was achieved by the Tesla Gigafactory, among other things, with take-up of just under 2 million m², and even achieved the highest market share ever in a long-term comparison at a good 44%. "However, logistics service providers also performed well, contributing almost 28% nationwide, a lower figure than 12 months ago, but at the same time representing the most important demand group in the top markets with over 40%. The great importance for companies to successively improve their own supply chains, especially in large metropolitan regions, and to supplement them with logistics centres close to city centres comes into play here," says Christopher Raabe, Managing Director and Head of Logistics & Industrial at BNP Paribas Real Estate GmbH. All other sectors account for a further 10% of the overall result.

In line with the development of total take-up, the volume of space accounted for by the new-build sector also fell by around a third to almost 3 million m² (67%). The aforementioned major deals by Daimler Truck, Volkswagen and BMW made a decisive contribution to this.       

Almost all top markets with lower take-up due to supply, upward trend in rents continues

The eight most important German logistics locations (Berlin, Düsseldorf, Frankfurt, Hamburg, Cologne, Leipzig and Munich) were unable to keep pace with the previous year's figures in the first nine months and, with take-up of around 1.49 million m², are almost 40% below the figure for the first three quarters of 2022. Overall moderate momentum in the project development sector and the desire of many users to take advantage of contract extensions are the main reasons why larger requests in particular often cannot be realised in either new builds or existing properties. It is also striking that six top logistics regions - Leipzig (264,000 m²), Hamburg (246,000 m²), Frankfurt (245,000 m²), Berlin (231,000 m²), Munich (221,000 m²) and the Ruhr area (238,000 m²) - posted comparable results within a relatively small take-up range. This can be seen as an indication that the most important metropolises are facing comparable conditions with tight letting markets and more or less severe space bottlenecks. Only Düsseldorf (180,000 m²) and Cologne (106,000 m²) are below the 200,000 m² mark with their results, although here too demand generally exceeds the available supply. As a result, it is not surprising that the upward trend in rent levels has continued across all locations over the course of the year. On average, both prime and average rents have risen by a further 12% over the past 12 months. Munich remains the most expensive location (€10.50/m²), but Hamburg is now also above the €8/m² mark (€8.10/m²). This is followed by Berlin (€7.90/m²), Frankfurt (€7.75/m²), Düsseldorf and Cologne (€7.50/m² each). The Ruhr region (€6.90/m²) and Leipzig (€5.80/m²) also saw significant increases of 16% and 18% respectively.

Development of demand depends on economic outlook and supply situation

"The nationwide logistics market will probably not be able to match the two excellent results of the previous year by the end of the year. Nevertheless, market activity in the first three quarters has shown that the demand base for logistics space is still very diverse. While production companies are currently mainly active outside the top markets, it is the logistics service providers within the A-locations that are driving demand. With an improved economic outlook, it can also be assumed that the share of retail companies' turnover in the market is likely to increase again. In addition, the letting market has turned in favour of small spaces close to city centres and well-connected medium-sized logistics centres in many larger locations this year, also due to supply factors. Although these are generating a high level of momentum, they are not having a decisive impact on take-up like the large big-box lettings. On the supply side, sub-lettings are increasingly providing relief, but are rather isolated solutions for predominantly smaller requests. Large lettings, on the other hand, generally remain dependent on developments within the new-build sector. As the supply-demand ratio tightens as outlined above, rental prices are also under further upward pressure. However, we no longer expect such a dynamic development as in recent years," 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

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