Logistics Market Frankfurt

LACK OF SUPPLY PREVENTS HIGHER TAKE-UP

• The Frankfurt logistics market was comparatively subdued until the end of the third quarter. With a take-up of 292,000 m², the record result from the previous year was missed by around 53% and the long-term average by almost a third.
• Despite the looming recession, the comparatively low take-up to date is largely attributable to the shortage of supply, reflecting not least the strong letting performance of recent years.
• Meanwhile, the combination of the strong surplus demand and the massive rise in construction costs is also reflected in the development of rents. For example, the prime rent has risen by 20 cents year-on-year to a new high of 7.30 €/m² and the average rent by 30 cents to 5.80 €/m². In consequence many companies are making use of their renewal options instead of moving to new space.

SMALL LETTINGS AND LOGISTICS FIRMS DOMINATE TAKE-UP

• The distribution of take-up across the individual size categories shows an unusual picture for the Frankfurt market. While large deals usually dominate, only three deals with a total of around 93,000 m² were registered in the segment above the 20,000 m² mark in the current year. On average over many years, large deals usually contribute around 150,000 m² to the result. By far the largest deal of the year was the leasing of 40,000 m² of logistics space by B+S Logistik in Hammersbach.
• Logistics service providers make an above-average contribution to turnover, accounting for more than half (57%). In contrast, both retail companies and manufacturing companies have not yet been able to match their results of recent years in the course of the year and are still underrepresented with just under 25% and almost 10% respectively.

KEY FIGURES

OUTLOOK

• The lack of warehouse space available at short notice will in all likelihood remain the market-dominating issue in the last three months of the year. In particular, infrastructurally favored multimodal locations near airports/cities continue to be in high demand, but requests cannot always be served. Accordingly, there is an increasing trend toward relocation to more peripheral locations.
• Meanwhile, a further slight rise in rental prices cannot be ruled out in the coming months against the backdrop of high inflation, increased construction costs and a shortage of building land. In addition, the economic uncertainties are increasingly posing challenges for project developers, which is why a rapid expansion in the supply of space is currently not in sight.