European shed take-up hits 180m sq ft as vacancy drops to record low
Take-up of European logistics space reached 180m sq ft in the first half of 2022.
Figures from CBRE show an increase of 8% compared with H1 2021, which saw take-up total 167m sq ft.
The first half of the year has also seen the average vacancy rate across the top 10 countries in Europe drop below 2.5% for the first time ever, showing the acute lack of available stock in the market, which also restrained total levels of take-up in Q2.
Take-up of European logistics space reached 180m sq ft in the first half of 2022.
Figures from CBRE show an increase of 8% compared with H1 2021, which saw take-up total 167m sq ft.
The first half of the year has also seen the average vacancy rate across the top 10 countries in Europe drop below 2.5% for the first time ever, showing the acute lack of available stock in the market, which also restrained total levels of take-up in Q2.
CBRE’s senior director for EMEA industrial and logistics, Mark Cartlich, said: “The further fall in the average vacancy rate in H1 2022 has driven rent increases in the majority of markets. It also partly explains slower take-up during the second quarter, as a number of requirements for space remained unmet due to the lack of availability.”
CBRE, which tracks all warehouses in excess of 100,000 sq ft in the UK and more than 5,000 sq m (54,000 sq ft) on the continent, said average prime rents for the region increased 13% year-on-year in H1 2022, reaching double-digit levels for the first time. This was primarily driven by the low vacancy rates and ongoing demand from occupiers.
London topped the table, with rent increases of 49%, followed by Prague at 42%. The next-highest increases were Warsaw and Gothenburg, which both saw a boost of 26%.
Joerg Kreindl, head of EMEA occupier industrial and logistics, said: “These unprecedented levels of European rental growth create an increasingly challenging environment for the occupier. However, the bullwhip effect, in which large fluctuations in inventory occur as a response to shifts in consumer demand and delayed arrivals of goods, is driving retailers to further grow their logistics footprint. By addressing this now, these occupiers are adapting for further structural change as well as preparing for future disruption.”
Net absorption levels remained in line with the same period last year at 11.6m sqm (125m sq ft). However, new completions are struggling to keep pace despite rising 19% year-on-year in H1 2022 to 10.3m sqm (111m sq ft).
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