Catella: Logistics Market Map Europe 2022

Let’s not fool ourselves: In view of the geopolitical situation, many people are becoming aware that the transport, traffic and logistics industry will continue to be systemically important. The disruption and rerouting of transport flows will lead to a short-term increase in storage capacity, which was already a lesson from the first Covid year of 2020. The focus will be less on the “last mile” and more on “nearshoring”. functions. In sober business language, this means: “Logistics will remain a dynamic growth market”.

At this point, however, a “but” must also be included in the analysis, because the first risk premiums from financiers for project developments in this segment and the basic risk adjustment to the political-economic situation will put pressure on the multipliers and returns.

Our forecast for autumn 2022 shows a new yield landscape in parts of Europe. We would now like to give you an overview of the first quarter of 2022 and the expectations for the logistics markets in Europe – as always in a comparative overview, with a total of 112 regions.

• The current prime European rent is €5.81/m² on average, ranging from €3.75/m² in Zaragoza to €16.40/m² in London. Since our last market overview in October 2021, top rents for logistics have risen by an average of almost 3% across all 112 markets surveyed.

• The increase was particularly significant in Eindhoven (+18%), Venlo (+17%), Brussels (+9%), Strasbourg (+10%), Bologna (+10%) and Prague (+8%).

• Yield compression can be observed across all markets due to sustained investor interest in the logistics segment. The European average yield is now 4.68%, which is 30 basis points lower than when analyzed 6 months ago.

• The lowest net initial yields, which speak for the most expensive logistics locations in Europe, can be found in the German A locations (3.00%-3.40%) as well as in Venlo (3.20%), Paris (3.20%) and London (3.00%). It seems only a matter of time before prime yields in top locations fall below the 3% mark.

• The currently strong demand for logistics real estate is also reflected in the transaction volume within the individual countries. A logistics transaction volume of 9.6 billion euros was recorded in Germany and 19.7 billion euros in Great Britain, which represents a record value in each case.

• Overall, an investment volume of almost 60 billion euros was recorded across the markets examined, which also represents a new record value for transaction volume at European level.

Nevertheless, the market for logistics real estate will oscillate between continued very dynamic growth and increased risk provisioning by investors in the coming months.

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