Industrial and logistics take-up fell sharply across almost all of the major EMEA markets in Q2 2023, according to Colliers’ latest I&L Market Snapshot (Q2 2023) for EMEA.
Of the 17 markets tracked in the report, only Budapest, Madrid, Rotterdam and Venlo reported an increase in take-up activity. The biggest fallers were Istanbul (-62.7%), Paris (-48.9%) and Frankfurt (-45.8%). In the UK, London (-32.9%) and Birmingham (-16.1%) recorded sharp declines.
Despite the slowdown, the vacancy rate across EMEA remained low at 3.6% in Q2 2023 and Colliers said nearly half of the markets expect vacancy to remain stable in the coming year, while 16% of markets expect a further drop in vacancy levels.
The firm added that demand for prime logistics space remains strong across the region and there is a lack of modern, efficient space that meets the ESG criteria of tenants.
Ed Plumley, director and co-head of the industrial and logistics practice group at Colliers, said: “At an overall level, take-up for logistics space across EMEA has come down from the heights seen during the pandemic. Aggregate figures do however mask differences between markets.”
Faustino Musicco, head of I&L Italy and co-head of the industrial and logistics practice group EMEA at Colliers, added: “In most markets where take-up is softening, it is demand related, meaning that weak economic growth is putting a brake on some leasing activity. In addition, a low level of take-up can be supply related, in that the availability of space is scarce or fails to meet occupier criteria.”
Karin Witalis, associate director – commercial real estate, EMEA research, said: “The occupational market remains favourable towards landlords in most markets. Rental growth continues to be positive, often beating medium term inflation targets, with very low vacancy rates for core product in core locations. Our outlook suggests further rental growth for city-warehouses in 70% of markets, and in 68% of markets for larger logistics and distribution space. That said, rates of rental growth are expected to slow in the coming year as more speculative space comes to market.”
