Industrial & Logistics | Hubs | March 2024

Our latest Industrial & Logistics Snapshot shows that the European logistics market entered the cyclical correction from a position of strength, with balanced underlying fundamentals.
As seen in our recent Global Investor Outlook survey 2024, investment sentiment is gradually turning more positive with the industrial and logistics sector well primed and favoured by a broad range of investors, with a rising market share of transactions.

A significant re-pricing of assets over the last 18 months, combined with strong market fundamentals, support a robust income and returns profile across multiple locations and asset types. Lower interest rates / cost of capital in H2 2024 will further support this and accelerate a solid uptick in transaction activity by year-end.

Key I&L trends
  • Global trends in trade and manufacturing including reshoring and nearshoring to various parts of EMEA continues to drive demand for manufacturing and distribution facilities. The gradual shift to omnichannel shopping has continued to support the need for various forms of logistics space across the region.
  • However, despite this underlying strength, recent quarters have witnessed a softening in market conditions for occupied space. EMEA-wide take-up has gradually come down due to either (or a combination of) weaker economic growth or a lack of available space that meets occupiers’ needs.
  • The overall vacancy rate has increased from a cyclical low 3.0% in 2022 to 4.4% in Q4 2023. This shift is however being counterbalanced by a general slowdown in development activity. As a result, we project a peak in vacancies in the upcoming quarters, maintaining a predominantly landlord-favorable market.
  • According to our latest 12-month outlook, landlord-oriented conditions is expected across the majority of EMEA markets by mid-2024. As a result, city-warehouses anticipate further rental growth in 65% of markets, while larger logistics and distribution spaces expect growth in 61% of markets, according to our outlook.

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