LOGISTICS MARKET ON TRACK DUE TO STRONG SECOND HALF-YEAR
- The Frankfurt logistics market gained significant momentum in the second half of 2023. Following an already dynamic third quarter, take-up increased further to 195,000 m² in the final quarter. This was the strongest quarter of the year in terms of take-up and contributed significantly to the annual result of 440,000 m². Although the long-term average was missed by 18 %, the result for 2023 was around 27 % higher than the previous year.
- The weak economic development has certainly affected the development of demand and take-up on the Frankfurt logistics market, but the excess demand and the pronounced shortage of supply continue to have a much greater impact. On the one hand, there is frequently a lack of attractive and, above all, adequate alternative space for upcoming rental decisions; on the other hand, many tenants are opting to extend their lease rather than sign new ones in view of the continued sharp rise in rent levels.
- In response to the continuing shortage of supply, the prime rent has increased by almost 8 % to 7.85 €/m², while the average rent has risen by 15.5 % to 6.70 €/m².
MANUFACTURING BY FAR THE STRONGEST SECTOR
- The Frankfurt logistics market has a broad base. Four size categories account for shares of 17 % to 19 %. Compared to the previous year, momentum has accelerated in the 5,001 to 8,000 m² segment, which achieved a result above the long-term average (+19.5 %) after a weak 2022. The 8,001 to 12,000 m² (+96 %) and 12,001 to 20,000 m² (+83 %) size categories also recorded growth.
- A positive development in the second half of the year was the increased signing activity for space over 20,000 m². All four registered contracts occurred in the second half of the year, three of them in Q4. Nevertheless, this result is clearly below average (-61 %). The decline in contracts above 20,000 m² appears to be partly due to reduced demand from the e-commerce sector. After several very expansive years, a consolidation appears to be emerging here.
- Manufacturing was by far the strongest sector (40 % market share). It accounted for three of the four deals over 20,000 m² and its result of 176,000 m² was 53 % above average. In contrast, take-up by logistics firms declined for the second year in a row and remained around 51 % below average. Wholesale/retail companies recorded an upturn again in 2023 (+22 %), although they also missed the 10-year average by a noticeable -45 %.