Confidence in the European industrial market took a hit at the start of the year as economic uncertainty spiked and businesses continue to take stock of the consequences of an economic slowdown in China. Despite concern for exports and an increase in downside risks, the policy framework in Europe remains supportive and domestic demand will be reinvigorated by improvements in labour markets and consumer spending, while e-commerce has plenty of room for growth. Changes to Europe’s GDP composition - from exports to consumption - highlight the extent of this ongoing change across Europe.
The strength of occupier activity remains variable by country/ location, but in general, demand for industrial space has bounced back. Take-up registered new post-crisis peaks in some countries. Combined with a general shortage of good quality space, rents are now rising in a number of markets - although this is far from being the norm. Speculative development is back on the agenda, although not at levels seen pre-crisis, and their distribution is uneven across markets. Build-to-suit continues to dominate the big-box segment, and the supply of smaller, multilet industrial facilities remains constrained with some developers seeing an opportunity in that space.
Source : Colliers International