The demand for logistics real estate continues to rise over the next three years as well, with tenants having less and less choice of buildings or plots to rent as vacancy rates decline and logistics hotspots struggle to deliver new logistics parks.
So reports Buck Consultants International All records in logistics real estate have been broken in the past three years. Never before has there been so much investment in the sector. The return on logistics property, at 6 per cent, is therefore higher than the return on office space or retail property (less than 5 per cent).
Return falls, rent rises
Buck Consultants expects this yield to fall slightly while rents for distribution centres and warehouses will rise, while taking regional differences into account. "The differences between logistics regions in Europe regarding rental levels, vacancy rates, yields and labour markets are still significant and will not decrease," says ceo René Buck.
Buck calls on investors and developers to respond quickly to rapid changes in customer needs. Companies are already doing so with agile supply chains, now the real estate world must follow. "Think flexible, sustainable, automated and robotised warehouses," the ceo concludes.
Savills: tipping point reached
Earlier this week, real estate consultant Savills predicted that logistics property rents will rise sharply. Until 2018, logistics property rents remained very stable due to a slight oversupply and the large number of speculative developments. According to Savills, a tipping point has now been reached; land shortages mean that supply in key hotspots will no longer be able to keep up with increasing demand.
