Logistics- and Industrial Market Overview

In the Düsseldorf region*, around 87,000 sqm was taken up in the market for warehousing and logistics space through lettings and owner occupier deals in the first half of the year. This is a drop of 31% both year-on-year and compared to the five-year average for a first half-year. The decline in take-up is due mainly to the limited supply of space in the region. Many tenants are moving further afield where the supply is greater and rents are lower. Companies from the distribution / logistics sector claimed top spot in the sectoral rankings, accounting for a share of 36%, which included the three largest lettings. Just one deal was concluded above the 10,000 sqm mark: Recht Logistik rented around 11,300 sqm in the Port of Düsseldorf. The largest owner-occupier deal was secured by Henkel which is expanding its existing warehouse in Düsseldorf by around 6,000 sqm.

Although around 60,000 sqm of warehousing space was completed in the region in the first six months of the year, a third more than in the previous year, all of the space was already reserved before completion. Around 98,000 sqm is currently under construction, 80% of which is speculative. The limited supply of modern new-build space is also having an impact on rental trends.

The prime rent for warehousing space larger than 5,000 sqm increased by 2.9% to €9.00/sqm p.m. in the first six months; this is 66.7% above the five-year average.

As a result of an above-average second quarter (150,000 sqm), a total of around 243,600 sqm of warehousing and logistics space was taken up through lettings and owner-occupier deals in the Frankfurt region* in the first half of 2024. This corresponds to a significant increase of 85% year-on-year, but an uplift of just 9.0% when compared to the five-year average of first half-years. This positive trend is due primarily to the conclusion of six deals in the ≥10,000 sqm size category. These included an owner-occupier deal concluded by a logistic services provider for around 31,000 sqm in Florstadt and a letting by a manufacturer of around 30,000 sqm in Butzbach. The strongest demand in the first six months came from manufacturers which accounted for 38% of take-up and almost double the volume of space that they took up in the first half of the previous year. Companies from the distribution / logistics sector accounted for 35%, while retailers contributed just 17% of take-up.

While an average of just under 98,000 sqm of warehousing space was completed in the first half of the last five years, no new space has come onto the market so far in 2024. Around 100,000 sqm of warehousing space is currently under construction in the region, of which just 22,000 sqm is still unlet. The short-term availability of vacant space in existing properties is also exceptionally low. Alongside the rise in construction costs, the limited availability of space has led to a 4.6% increase in the prime rent for warehousing space larger than 5,000 sqm to the current level of €7.95/sqm p.m. in the first half of the year. An increase of 28.2% was registered in the last five years. Further slight rental growth is expected in the second half of the year.

In the Hamburg region*, around 133,900 sqm of space was taken up in the warehousing and logistics property market through lettings and owner-occupier deals in the first six months, 24% less than in the same period last year. This result was 42% below the five-year average. Due to the ongoing economic uncertainties, many companies are postponing their relocation plans and extending their existing leases for another year. It is also apparent that companies are increasingly releasing surplus space onto the market for subletting. The decline in take-up is affecting most size categories, with just the 2,500 - 5,000 sqm category recording an increase of 32% compared to the previous year. Most space was taken up by companies from the distribution / logistics sector (44%) including the two biggest deals of the year so far: Sterac secured around 12,000 sqm in Braak for owner-occupation in the eastern outskirts of Hamburg; and Kühne + Nagel has leased around 10,200 sqm in a new building in Hamburg-Billbrook.

Around 46,000 sqm of warehousing and logistics space was completed by the mid-point of the year, with just 14% of this space still unlet at the time of completion. A total of 70,000 sqm of logistics space is currently under construction, with just 31% of this still available on the market. This means that speculative construction activity has fallen by 75% year-on-year.

In view of the low demand, owners are increasingly prepared to offer incentives such as rent-free periods, but this is having no impact on the prime rent.

The prime rent for warehousing space larger than 5,000 sqm rose by 3.0% in the first six months to reach €8.50/sqm p.m. by the mid-point of the year, up 34.9% on the five-year average.

Around 150,400 sqm of space larger than 5,000 sqm was taken up in the market for warehousing and logistics space in the Cologne region* through lettings and owner-occupier deals in the first six months of 2024. This means that three times as much space was taken up than in the first half of the previous year and almost double the five-year average (96%). Cologne’s city area was particularly popular, accounting for over 90% of registered take-up. Deals include two contracts for more than 40,000 sqm: Recht Logistik secured around 49,000 sqm in a new development in the Port of Niehl and the online furniture retailer Woltu will occupy around 42,000 sqm in an existing property. The strongest demand came from companies from the distribution / logistics sector which accounted for around 63% of total take-up, while a further 42,000 sqm (28%) was secured by retailers. As in 2023, manufacturers have not played a role so far this year.

The prime rent for warehousing and logistics space larger than 5,000 sqm remained stable at €8.50/sqm p.m. in the first half of the year after rising by 6.3% in the fourth quarter of 2023. Looking at the past five years, the figure has risen steadily by 66.7%. The prime rent was achieved in Cologne city.

In the Munich region*, around 96,800 sqm of warehousing and logistics space was taken up through lettings and owner-occupier deals in the first half of 2024, 11% less than in the first six months of 2023 and 18% below the five-year average. The fall is even more dramatic when analysing the number of contracts signed, with a 52% reduction recorded year-on-year. The largest deal accounted for 63% of total take-up. In this case, Group7 AG International Logistics commenced construction of an around 60,000 sqm logistics centre in Oberding in the first quarter of the year. Many companies are exercising caution and are currently focusing on smaller units, with most lettings registered in the <3,000 sqm size category (85% of deals). For many companies, extending their existing contracts is an additional option.

Due to the extremely limited availability of land in the region, a low volume of new shed space is being constructed. While an average of around 12,000 sqm was completed in the first half of each of the last five years, there was no construction activity in the current period under review. Just 14% of the almost 70,000 sqm being built is still available. This means that there is still a shortage of modern new-build space.

The prime rent for space larger than 5,000 sqm remained stable at €10.70/sqm p.m. after rising by 1.9% in the third quarter of 2023. Rental growth of 50.7% has been recorded over the past five years.

Around 225,600 sqm of warehousing and logistics space larger than 5,000 sqm was taken up through lettings and owner-occupier deals in the Ruhr area* in the first six months of the year. This was 6.0% higher than the previous year’s result, but 29% below the five-year average. There was a noticeable upturn in the market in the second quarter, with the take-up volume doubling compared to the first quarter. Most demand for space came from companies from the distribution / logistics sector (47%), followed by retailers (43%). Manufacturers, which accounted for an average of 16% of take-up in the last five years, secured a below-average share of take-up of 9.0% in the first six months. The largest deals included the lettings by the online retailer Euziel in Essen (almost 41,000 sqm) and Duisburg (around 27,000 sqm). The Essen letting concerns a new development on the former Thyssenkrupp Schulte site. This is where the Ruhr area excels over many other regions: the numerous brownfield sites available offer significant potential for development projects.

The prime rent for warehousing space larger than 5,000 sqm, which has risen by 61.9% over the past five years, remained stable at €8.50/sqm p.m. in the last six months. The current prime rent is achieved in Bottrop.

In the Stuttgart region*, around 57,400 sqm of warehousing and logistics space larger than 5,000 sqm was taken up through lettings and owner-occupier deals in the first half of 2024. The result is 15% below the previous year's figure and 29% below the five-year average for a first half-year. Manufacturers were responsible for all take-up during the period, compared to just 22% in the first half of the previous year. 62% of take-up was attributable to new developments. The cable manufacturer Lapp, for example, is expanding its logistics centre in Ludwigsburg, with the addition of a 14,000 sqm shed, scheduled to open in 2027. Also in Ludwigsburg, the automotive supplier Mann+Hummel rented space in the Ludwigsburg Industriezentrum.

The situation in the property market remains tense, meaning that only a few new-build properties are constructed each year, and these are often let before the first brick is laid. As a result, many companies looking for space in the region are unable to find what they are looking for.

The prime rent for warehousing space larger than 5,000 sqm increased by 2.9% to €8.50/sqm p.m. in the first six months of the year, a rise of 28.7% over the past five years.