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Take-up reached just under three million sq m, down 16% year-on-year while still remaining above the 10-year average according to Jones Lang LaSalle Research
London, Budapest 21st June 2012 – European logistics take-up for assets of over 5,000 sq m in size (10,000 sq m in the UK) weakened in Q1 2012 over a buoyant final quarter of 2011. Total take-up reached just under three million sq m, down 35% quarter-on-quarter. However, take-up remained more resilient in comparison with the same quarter last year (Q1 2011), down 16% and was still 15% ahead on the 10-year average, indicating on-going resilient logistics occupier markets despite the uncertain economic outlook.
Germany, France and Poland confirmed the top three ranking seen in 2011 as a whole, accounting for more than 50% of the European total in Q1 2012. While Germany was once again the most active market, with just under one million sq m of floorspace taken-up, activity declined 16% year-on-year in Q1 on the record levels seen last year. Meanwhile both France and Poland saw higher take-up levels when compared to Q1 2011, up 13% and 18% respectively.
Prime logistics rents remained broadly unchanged in the majority of markets in Q1 2012. Only two markets, Antwerp (+2.1%) and Brussels (+9.9%) recorded rental growth over the quarter, driven by dwindling supply levels. Meanwhile, rents fell in Amsterdam (-2.7%), Madrid (-3.3%) and London (-3.6%) due to a combination of slowing occupier activity and still higher vacancy rates.
“We expect prime rental levels to remain broadly unchanged in the majority of markets during the remainder of the year as scarce modern supply will still be outweighed by occupier demand. Logistics rents this year are expected to be led by Moscow, albeit with growth significantly slowing on last year’s strong outcome. Some Western European markets are also expected to perform well, notably Belgium and Germany. Nevertheless, slowing activity amid uncertain economic growth is projected to lead to a modest decline in the European aggregate in annual terms in 2012” said Alexandra Tornow, Jones Lang LaSalle EMEA Logistics and Industrial Research.
“We project logistics rental growth to return in 2013 although it will remain moderate over the whole five-year forecast period with annual growth averaging a modest 1.0% As a result of the slow upturn, logistics rents will remain below the heights of the last decade at the end of the forecast period” she adds.
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