Property Report - European Logistics Market - February 2023

Take-up

The logistics market in Europe proved resilient despite a difficult political and economic environment. Low vacancy rates and limited land availability continue to push rents up and magnified by construction costs.
 

• Take-up decreased by 10% in 2022 in the six leading European countries. 
• It maintained a high level above the 5-year average despite the difficult economic backdrop. 
• Market fundamentals are healthy with vacancy rates below 4% in most countries. 
• Prime rents increased by 12.1% over the last 12 months in Europe, notably supported by strong growth in the UK, Poland and the Czech Republic.

Investment

Rental growth prospects remain attractive to investors. Consequently, capital markets recorded strong volumes across Europe despite the slowdown at the end of 2022 as prices adjusted.
 

• Industrial and logistics reached €56 bn invested in 2022, greater than the annual average between 2017 and 2020.
• Despite a strong year overall, Q4 experienced strong slowdown in investment. 
• It is the result of rapid adjustment in the macro financial environment with bond yield expansion and rising interest rates. 
• It created pricing uncertainty with yield decompression in most European countries.