European logistics real estate markets have not suffered last year from the COVID-19 pandemic. Due to fast-growing e-commerce and higher inventory levels of producers, the total expected take-up in 11 European countries of 23.6 million sqm for 2020 is only 3% down compared with the record year 2019. The forecasts for this year are even better with an expected take-up of 27 million sqm – an increase of 14%. Particularly large logistics real estate markets like Germany, France, the Netherlands and Poland are expected to grow substantially.
Rents are expected to be stable or to show a limited increase. Yields are falling, but Central and Eastern Europe still have very attractive yields, concludes independent real estate consultancy firm Buck Consultants International, based on a survey amongst Europe’s most important logistics real estate developers and investors.
Mega distribution centres
Compared with 2020, the expectations for the establishment of new mega distribution centres in Europe in 2021 are very positive. More than half of the experts interviewed (70%) believes that the establishment of new mega distribution centres will show (strong) growth; 30% of the respondents expect that the establishment of new mega distribution centres will be more or less stable in 2021.
Favourite countries for the establishment of new mega distribution centres are Germany, the Netherlands and Poland. Across Europe, real estate developers and investors fear the lack of land.
City distribution centres
The expectations for 2021 compared with 2020 for the establishment of new city distribution centres in Europe are very positive. Nobody expects a decrease, 80% of the leading logistics real estate developers and investors expect a growth of 10 to 25% for the establishment of city distribution centres, while 20% even expect strong growth of more than 25%. London and Paris are by far favourites.
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