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04. Januar 2012     Print Print 

Industrial market conditions still sound

Take-up of industrial space across Europe, Middle East and Africa (EMEA) increased by 14% in the year to September 2011 compared to the same period last year, as occupiers continue to adapt to new distribution and manufacturing environments, according to Jones Lang LaSalle’s latest EMEA Corporate Occupier Conditions Industrial research report.

Take-up reached 3.6 million sq m in quarter three, putting take-up levels on track to reach the 14 million sq m mark by the end of 2011 – significantly above the ten year average of 9.2 million sq m, although not quite reaching the record volume of 14.8 million sq m seen in 2010. However, growing concern over the ongoing economic climate in the Eurozone and the global slowdown in economic growth means that occupiers have become more cautious over the last few months. This was reflected in lower take-up levels in Q3, down 19% on the stellar Q2.

Vincent Lottefier, Chief Executive, EMEA Corporate Solutions at Jones Lang LaSalle, commented:
“We believe that take-up rates across the EMEA region are being predominantly driven by demand from logistics operators, retailers and manufacturers as they adapt to changing retail patterns. In particular in Western Europe, increased online retailing has led to occupier looking for better located, higher quality space to service their distribution networks more efficiently.”

“Occupiers are working through real-estate portfolios and taking steps to make them more productive. Efficient supply chains remain of paramount importance, but tight supply of good product means there is little opportunity for occupiers to upgrade. For those industrial occupiers looking further afield and expanding outside of core Western Europe markets there will be more choice although we expect vacancy levels to tighten over the next 12 months.”

Modern available supply retreated to its lowest level in two years in Q3 2011. Future supply will also remain limited as we expect to see low completions compared to historic levels over the next twelve months. This will encourage prime rents to trend upwards, although quarter on quarter rental growth in prime warehousing across Europe in Q3 2011 was limited to 0.1%, following 0.7% growth in Q2.

In 2012 occupier choice across the EMEA is set to be squeezed as the vast majority of the 4.7 million sq metres of floor space constructed in the year to date is pre-let, leading to falling supply levels and increased competition for high quality space. As a result, occupiers will have to adapt the “build-to-suit” solution if they are looking for large modern floor space.

Similar observations are true also for the Polish market. Tomasz Mika, Head of Industrial
Department Poland at Jones Lang LaSalle, says:
“Tenants are still active. As regards the available warehouse space, there is a difference between the city of Warsaw and its suburbs. Within the city borders the vacancy rate is 11%, compared to 18% in the suburbs. The entire Warsaw area sees the vacancy rate going down, which, combined with a stable demand implies a potential rental growth going forward. We observe similar situation in the other industrial regions with the vacancy rate for Poland dropping to 11%. Having regard to limited speculative developments (only 9%), rental levels in the country are also expected to increase.”

Economic Growth Projections Downgraded (GDP Growth)
Market 2011 2012 2013
Czech 2.1%2.3%4.1%
Germany 3.0%1.0%1.5%
Italy 0.6%-0.2%0.9%
Poland 3.9%3.3%3.9%
Spain 0.7%-0.1%1.0%
UK 0.9%1.0%2.1%
Source: IHS Global Insight, November 2011