In the second half of 2022, swift rental growth was recorded in submarkets in the UK and in Ireland, with London (+ €3.00 per sqm) and Birmingham (+ €0.70 per sqm) leading the ranking. A broad range of submarkets between Munich and Warsaw also saw accelerated growth. Cities that stood out were Prague (+ €1.40 per sqm), Munich and Brno (+ €0.80 per sqm each). The Nordic capitals of Oslo and Helsinki also made significant gains (+ €0.70 per sqm each). 

“The keen demand for space illustrates the stability of the occupier market. That being said, the land shortage and the decline in construction activities prompted by construction and financing cost hikes has a limiting effect. The rental growth dynamic will therefore maintain its pace for the time being,” said Tobias Kassner, Head of Research at Garbe Industrial Real Estate. 

Yield compression has continued to manifest itself across European logistics regions. For instance, yields remainbelow four percent in Germany’s seven top markets as well as in Leipzig and Paris. 

Compared to H1 2022, net initial yields in top markets like Vienna, Rotterdam and Stockholm rose by 70 basis points. Elsewhere, yield increases were much more modest at ten to 20 basis points, such as on the secondary markets of eastern Europe (e. g. Ljubljana, Debrecen) whose yields are already high.