Logistics industry on the upswing in Europe
For years, the transportation industry has benefited from the increasing interconnection of international economies and rising flows of goods. Although Europe's foreign trade has grown significantly in recent years, the logistics industry is growing only at the same rate as the macro-economy, indicating that the effects of globalisation are diminishing. Online trading has thus become the main driver of the industry.
Europe as A global top logistics location
The Logistics Performance Index published by the World Bank assesses countries according to six dimensions of trade and logistics, including the quality of infrastructure
and the punctuality of shipments. Germany is a high-flyer: The top ten markets in the 2018 ranking include eight EU countries, led by Germany. The Federal Republic of Germany is one of the strongest economic markets in the world and enjoys great popularity as a logistics location, particularly due to its geographical location, its distinctive infrastructure and the high quality of its real estate.
High demand for modern space
Demand for modern space is currently significantly higher than in the last upswing ten years ago.
In contrast to other real estate sectors, the demand for logistics space is distributed much more regionally. In Germany, take-up is generated not only by the major metropolitan areas, but also by regions with high transport value, local economic strength or gateway functions.
Increasing space Requirements revives new construction activity
Completions have risen in recent years. The largest volume of new construction activity can be traced back to the main markets of Germany and Great Britain.
In Central Europe there is still some catching up to do in this area, but, at the same time, the region has a noticeably higher share of speculative construction activity.
Rents in logistics industry on an upward trend
For a long time, rental prices for logistics space have hardly changed in most European countries as a result of economic fluctuations. By contrast, rents in logistics hotspots have risen in recent years. This trend is likely to continue thanks to scarce plots and high construction costs. However, the market in its entire regional breadth offers little potential for rental growth.
Logistics real estate targeted by investors
Logistics real estate is currently the fastest growing asset class in the real estate industry. For institutional investors, the logistics industry has become increasingly important over the past two decades. The absolute transaction volume and the market share in the investment universe of commercial real estate highlight this development.
High liquidity in Great Britain and Germany
From a regional perspective, Great Britain dominates the investment market for real estate, followed by Germany, which gained strongly in importance in 2017. Liquid investment markets have also developed in France, Sweden and the Netherlands. Large economies such as Spain and Italy were not the focus of much investor attention due to their weak economies, even though volumes have increased in recent years.