Logistics- and Industrial Market Overview

H2 2023

Momentum slows in the rental market for logistics space

February 07, 2024

Take-up of logistics space in 2023 remains below the level of previous years

At around 6.25 million sqm, 27% less space was taken up in the German market for warehouse and logistics space in lettings and owner-occupier deals in 2023 than in the previous year, falling 18% and 8% short of the five- and ten-year averages, respectively. A strong third quarter with take-up of over 2 million sqm was followed by an average final quarter with 1.46 million sqm. However year-on-year, there was only a 12% drop in the number of deals concluded, to 690. Around a quarter of the take-up volume was attributable to owner-occupiers.

This decline in take-up can be attributed to a number of factors. The current economic conditions and geopolitical crises and tensions are challenging for all market players, with the uncertainty this is bringing to their own economic situation causing many companies to temporarily postpone their relocation plans. However, the shortage of space is a major issue in many regions, with a lack of both modern space available to let at short notice and land that can be built on for logistics purposes. Many companies are therefore opting to extend their current leases, despite their preference to relocate.

Significant decline in take-up in the Big 5

Around 1.55 million sqm of space was taken up in the Big 5 conurbations (Berlin, Düsseldorf, Frankfurt, Hamburg and Munich) in 2023, 34% less than in the previous year and 26% below the five-year average.

The Frankfurt region recorded the highest take-up with 438,800 sqm and a year-on-year increase of more than a third, while the Düsseldorf region also reported a rise (250,000 sqm), albeit of just 3%. There was a double-digit percentage decline in the take-up volumes in all other regions. Berlin was second placed among the Big 5 with 405,400 sqm, but had to contend with the sharpest fall, of 64%. It should be noted, however, that the previous year's take-up was exceptionally high at 1.1 million sqm. At 280,400 sqm, Hamburg’s take-up was 41% down on the previous year's figure, while Munich recorded a decrease of 14% to 170,400 sqm. Comparing their recent performances with the five-year average, all regions except Düsseldorf showed a significant drop.

The decline is primarily due to the smaller number of major deals concluded, with just 37 contracts signed in the >10,000 sqm size category, 20 fewer than in 2022. The strongest demand came from companies from the distribution / logistics sector which were responsible for 38% of the total take-up. The manufacturing sector and retailers accounted for 28% and 21%, respectively. The four largest contracts were signed by logistics companies, with around 38,700 sqm and 33,200 sqm leased in the Magna Park in Werder near Berlin, around 34,200 sqm in Dormagen near Düsseldorf and around 31,400 sqm in Ludwigsfelde near Berlin.

A total of around 667,000 sqm of new warehousing space was built in the Big 5 in 2023, half the volume of completions year-on-year and just 20% of this space was still available to the market at the time of completion. There is currently around 792,000 sqm of space under construction, of which 46% is still available to the market. Most speculative construction activity is taking place in the Berlin region (around 165,000 sqm).

Prime rents on the rise

Year-on-year, prime rents for warehousing space in the >5,000 sqm size category have risen in all Big 5 regions, with the highest rises recorded in Düsseldorf (+12.9% to €8.75/sqm p.m.) and Berlin (+6.7% to €8.00/sqm p.m.). In Frankfurt, the prime rent has risen by 4.1% to €7.60/sqm p.m. and in Hamburg, by 3.1% to €8.25/sqm p.m. The highest rents of €10.70/sqm p.m. are achieved in the Munich region, although here the figure has risen by just 1.9%. Looking at the last five years, rent rises have ranged from 27% in Frankfurt to 62% in Düsseldorf.

Outside the Big 5, the manufacturing sector accounts for 40% of take-up for the first time

In 2023, take-up of around 4.7 million sqm was registered outside the Big 5 regions*. Nonetheless, this was a reduction of 24% year-on-year (2022: 6.18 million sqm) and 14% below the five-year average. While take-up by owner-occupiers was just 6% lower year-on-year, the decline was greater for lettings at -30%.

Three deals, all by owner-occupiers, were concluded for space in the >100,000 sqm size category: Daimler Truck commenced construction of 260,000 sqm of logistics space in Halberstadt and VW is building around 210,000 sqm in Salzgitter, while a new 175,000 sqm logistics centre for the online giant Amazon is being constructed in Horn-Bad Meinberg. The largest lettings were concluded by two well-known car manufacturers, with almost 87,000 sqm in Bitterfeld-Wolfen and around 79,000 sqm in Pilsting. Around 40% of turnover outside the Big 5 was generated by the manufacturing sector, significantly more than the corresponding five-year average (27%) and its highest share in the last ten years. It was followed in second place by distribution / logistics with a 30% share of take-up, while retailers accounted for 23%. 

Looking at the individual regions, the Ruhr area once again topped the ranking with around 560,000 sqm, followed by the Hanover / Brunswick region with around 477,000 sqm. Third and fourth places were assumed at some distance by the Osnabrück / Münster (292,500 sqm) and Leipzig / Halle regions (273,700 sqm).

Around 70% of take-up was concluded in new buildings or development projects. In the ≥50,000 sqm size category, the figure was 100%.

Contact us

Our Industrial and Logistics contacts:

Industrial Leasing:
Sarina Schekahn, Head of Industrial & Logistics Agency Germany

Industrial Investment:
Diana Schumann, Co Head Industrial Investment Germany
Dominik Thoma, Co Head Industrial Investment Germany

Helge Scheunemann, Head of Research Germany


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