European Logistics Market Fundamentals Q4 2016
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European Industrial & Logistics Logistics Mart Fundamentals Q4 2016 jll.eu/il © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. The information contained in this document is proprietary to JLL and shall be used solely for the purposes of evaluating this proposal. All such documentation and information remains the property of JLL and shall be kept confidential. Reproduction of any part of this document is authorized only to the extent necessary for its evaluation. It is not to be shown to any third party without the prior written authorization of JLL. All information contained herein is from sources deemed reliable; however, no representation or warranty is made as to the accuracy thereof. European logistics take-up hits a new record high in 2016 Low vacancy levels and strong occupier demand drive further development, but most of this is build to suit (BTS) European prime rental growth remains very modest in aggregate in part because yield compression has enabled competitive rental terms on BTS space. YoY on 5-year average YoY in CEE YoY in Southern Europe YoY in Western Europe 12 % 28 % 35 % Third Party Logistics 36 % Other 7 % E-Commerce 12 % Manufacturing 17 % 3 % 10 % 3PLs were the most active occupier group in 2016 – but space directly dedicated to e-fulfilment rose strongest Strongest growing occupier groups in 2016 Guy Gueirard Head of EMEA Industrial & Logistics [email protected] Jon Sleeman Head of EMEA Industrial & Logistics Research [email protected] Alexandra Tornow EMEA Industrial & Logistics Research [email protected] Ryan Loſtus EMEA Industrial & Logistics Research ryan.loſt[email protected] For more information, contact: France, Spain and Russia registered lower take-up in 2016 compared with 2015, but all other countries posted an increase in take-up. All countries, except Russia, recorded higher take-up in 2016 compared with their respective 5-year average levels. 40 % YoY in UK 16 % YoY in Russia Take-up e-commerce driven YoY 3PL providers / express companies 48 % 18 % Immediately available space across the majority of European markets remains below total annual occupier demand (based on 5-year average take-up) For the first time in the current cycle, new completions and space under construction exceed the previous peak. However, market conditions remain very different, as the majority of new space now is build-to- suit whereas previously it was speculative. <6 % New comptions in 2016 Warehou spa under construction at end 2016 European aggregate vacancy rate at end 2016 YoY of current space under construction is speculative (20% if excluding Russia) on 5-year annual average 25 % QoQ 10 % YoY 27 % on 5-year average 74 % 25 % 60 % 0.3 % 1.4 % Q4 warehousing rents QoQ excl. Russia YoY excl. Russia Retail Companies 28 % The importance of e-commerce as a demand driver is greater than our figures suggest because of knock-on effects on demand from logistics and express operators. That said, occupier demand remains broadly-based driven by business growth and ongoing pressures to restructure physical distribution networks to reduce costs and make supply chains more efficient.
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Transcript of European Logistics Market Fundamentals Q4 2016
European Industrial & Logistics
Logistics Market Fundamentals
Q42016
jll.eu/il© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. The information contained in this document is proprietary to JLL and shall be used solely for the purposes of evaluating this proposal. All such documentation and information remains the property of JLL and shall be kept confidential. Reproduction of any part of this document is authorized only to the extent necessary for its evaluation. It is not to be shown to any third party without the prior written authorization of JLL. All information contained herein is from sources deemed reliable; however, no representation or warranty is made as to the accuracy thereof.
European logistics take-up hits a new record high in 2016
Low vacancy levels and strong occupier demand drive further development, but most of this is build to suit (BTS)
European prime rental growth remains very modest in aggregate in part because yield compression has enabled competitive rental terms on BTS space.
YoY on 5-year average
YoY in CEE YoY in Southern Europe
YoY in Western Europe
12% 28%
35%
Third Party Logistics36%
Other7%
E-Commerce12%
Manufacturing17%
3%10%
3PLs were the most active occupier group in 2016 – but space directly dedicated to e-fulfilment rose strongest
Strongest growing occupier groups in 2016
Guy GueirardHead of EMEA Industrial & [email protected]
Jon SleemanHead of EMEA Industrial & Logistics [email protected]
Alexandra TornowEMEA Industrial & Logistics Research [email protected]
Ryan LoftusEMEA Industrial & Logistics [email protected]
For more information, contact:
France, Spain and Russia registered lower take-up in 2016 compared with 2015, but all other countries posted an increase in take-up. All countries, except Russia, recorded higher take-up in 2016 compared with their respective 5-year average levels.
40%YoY in UK
16%YoY in Russia
Take-up e-commerce driven YoY
3PL providers / express companies
48% 18%
Immediately available space across the majority of European markets remains below total annual occupier demand (based on 5-year average take-up)
For the first time in the current cycle, new completions and space under construction exceed the previous peak. However, market conditions remain very different, as the majority of new space now is build-to-suit whereas previously it was speculative.
<6%New completions in 2016
Warehouse space under construction at end 2016
European aggregate vacancy rate at end
2016 YoY
of current space under construction is speculative (20% if excluding Russia)
on 5-year annual average
25%
QoQ
10%
YoY
27%
on 5-year average
74% 25%
60%
0.3% 1.4%Q4 warehousing rents
QoQ excl. RussiaYoY excl. Russia
Retail Companies28%
The importance of e-commerce as a demand driver is greater than our figures suggest because of knock-on effects on demand from logistics and express operators. That said, occupier demand remains broadly-based driven by business growth and ongoing pressures to restructure physical distribution networks to reduce costs and make supply chains more efficient.
