In the first quarter of 2013 warehouse space totalling 1.090 million sq m was newly let or passed to owner-occupiers through purchases or starts of construction. This fell short of the result for both preceding quarters, but at the same time confirmed the result of the first quarter of 2012. This shows the high degree of confidence that businesses still have in their medium-term development, not least in the context of economic forecasts for 2013, which have been downgraded.
Industrial properties proved an extraordinarily attractive investment option in the first quarter. In total, properties and sites changed hands for about € 760 million. A few large-volume portfolio sales contributed significantly to the result, which was the highest quarterly volume since Q1 2008.
According to our research, in the first quarter of 2013 around 256,000 sq m new warehousing space over a total of 20 properties was added to the market. In the Top 5 markets stock grew by just 26,000 sq m.
Currently 111 warehouse spaces with a total area of 2.2 million sq m are under construction which will be completed at the latest by the end of 2014. The vast majority of the properties under construction are being built for owner-occupiers, followed by properties that are already pre-let, either fully or partially. Only three properties started construction purely speculatively.
Prime rents and prime yields for high-grade warehouse space have remained unchanged in the past three months. The market leaders in achievable rent are still Frankfurt and Munich, each at € 6 per sq m per month. The prime yield for first-class properties is in both markets 7%.
Source : DTZ (Groupe UGL)