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European Logistics Census : lack of supply the main issue

Kevin Mofid.

Lack of supply is the main concern among all property professionals as demand for space continues to rise, according to the first European Logistics Real Estate Census ever conducted, which was presented exclusively at a Real Asset Media online event on REALX.Global yesterday.

The landmark research survey, conducted over the summer by Savills, Tritax Eurobox and Analytiqa, is based on over 400 detailed responses from leading companies across Europe and aims to provide information on key issues affecting logistics developers, investors and occupiers.

Providing detailed, comprehensive and reliable  data will enable people to make better decisions in a sector which has seen record levels of investment activity and take-up in the last year.

“We saw a new annual record of 26 million sq m take-up in 2020 and a record investment volume of €39 billion,” said Kevin Mofid, director, head of industrial and logistics research, Savills. “But looking at H1 2021 figures, take-up has reached 18.3 million sq m in the first six months of the year, which is 60% above the half-year average.”

The survey shows that sentiment is positive as the increase in take-up and investment is set to continue in 2021. Over 80% of investors and asset managers polled expect an increasing take-up of industrial and logistics properties this year.

Among landowners, 100% view current trading conditions as more favourable than they were six months ago. Almost two-thirds of developers share that optimism, as well as 55% of investors, but the percentage declines to 49% among occupiers, with retailers being the most positive about the outlook.

The survey makes it clear that the opportunities the sector still offers far outweigh the challenges it presents. Points of view differ among property professionals, but “the lack of supply of new buildings is by far the most important challenge facing the sector”, said Mark O’Bornick, director, research, Analitiqa. “Zoning and permits, employment and rising rents follow at a distance.”

Looking at demand by country, over 40% of respondents expect their companies to increase their warehouse footprint in France, Germany and Spain, with Italy and Portugal also in demand.  

When asked which countries they would choose where they were not already active, respondents put France in first place, followed by Germany and the Netherlands. “The established mature markets in Europe win out”, said O’Bornick.