Supply bottleneck in Cologne's logistics market slows take-up of space

Logistics market figures for the second quarter of 2023 - Supply bottleneck on Cologne's logistics market slows take-up of space

Cologne, 26 July 2023: Cologne's warehouse and logistics market achieved take-up of 55,000 m² in the first half of 2023. This corresponds to a decline of almost 65% compared to the previous year's result and 48% compared to the ten-year average. These are the findings of the analysis by BNP Paribas Real Estate.

"In other years, too, there have been half-year figures that were of a similar order of magnitude and were generally levelled out again over the course of the year. In addition to the ongoing economic uncertainties, the main reason for the low take-up at present is the continuing lack of available space across the entire market area. This applies in particular to the large-scale market segment, in which the corresponding requests cannot be met," explains Christopher Raabe, Managing Director and Head of Logistics & Industrial at BNP Paribas Real Estate GmbH. There are hardly any market-adequate properties available in the portfolio and new construction activity is currently too low to provide a short-term remedy. The rental price trend is dynamic: both the prime rent and the average rent have risen by around 10% year-on-year to €7.50/m² and €5.50/m² respectively.

No major deals to date

The distribution of take-up by size category shows the main difference to the strong result of the previous year. While the largest registered contract currently only covers 11,000 m² (retail company in Cologne), last year over 90,000 m² was already recorded in the larger segments from 12,000 m² upwards. Market activity was particularly lively in the category between 3,000 and 5,000 m², which also made an above-average contribution in absolute terms at a good 43%. In terms of sector distribution, retail companies are in first place with just under 41% and also increased their value in absolute terms compared to the previous year. Logistics service providers follow with just under 36%, while manufacturing companies are still underrepresented with around 15%. Owner-occupiers have been quite cautious to date due to the current economic environment and lack of property space, contributing only around 6% to turnover.

Prospects

"For the rest of the year, we can assume that demand will remain fundamentally good. Although some users are acting somewhat more cautiously than in the previous year, the lack of available space remains the limiting factor in the Cologne market area. As there are no signs of a significant easing of the supply situation in the foreseeable future, large-scale searches are only likely to be realised in isolated cases in the second half of the year. In conjunction with the noticeable rise in rents, users are also increasingly tending to extend existing rental agreements. Against this backdrop, it is becoming apparent that take-up is unlikely to reach the long-term average (234,000 m²). Due to the continuing discrepancy between supply and demand, rents are likely to continue to rise both at the peak and on average," 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(at)bnpparibas(dot)com

Viktoria Gomolka - Tel: +49 (0)69-298 99-946, Mobile: +49 (0)173-968 60 86, viktoria.gomolka(at)bnpparibas(dot)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.

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