European logistics Census shows healthy occupier demand despite tough macro-environment
Occupier markets in the European real estate logistics will continue to benefit from the well-documented megatrends that have underpinned the sector over the last decade and were amplified by the onset of COVID-19, according to Savills and Tritax EuroBox in their third annual European Real Estate Logistics Census.
These drivers remain in place today, even as the near-term macroeconomic outlook remains challenging. There are some promising signs in the investment market. While inflation has persisted, interest rate hikes have begun to take effect, and price growth has started to decelerate as the year has progressed.
About 42 percent of the surveyed respondents said current business conditions are more favorable than six months ago. This is an improvement compared to the 35 percent who felt the same way a year ago, suggesting that occupiers have adapted to the economic situation and are more optimistic about the future. However, respondents in the broader property sector, such as developers, landowners and agents, have become more pessimistic (27 percent). The current economic situation is uncertain, as reflected in the variety of responses we received from all categories of respondents — ranging from “much more favorable” to “much more difficult.”
Phil Redding, CEO of Tritax EuroBox plc, said, “Results from our third European Real Estate Logistics Census reflect the challenging macro-environment that we’re operating in today, with occupiers identifying rising costs, economic uncertainty and labor supply as significant challenges for their businesses. Despite this, 39 percent expected their industrial and logistics real estate take-up to increase this year — reflecting its mission-critical role in their supply chain and overall operations.
“We’re seeing technology advancements continue to drive supply-chain evolution with occupiers investing across a diverse range of technologies, including electric vehicles and automation, as they seek efficiency and productivity gains alongside improved carbon performance. Looking ahead, the social element of ESG is likely to rise up the agenda for occupiers as they seek to attract and retain the best people in a competitive European labor market.”
Marcus de Minckwitz, head of EMEA Industrial and Logistics for Savills, added, “Despite ongoing macroeconomic headwinds, the logistics sector has remained resilient, and it is positive to see that there is light at the end of the tunnel when it comes to overall sentiment. This will encourage activity in both the occupational and investment markets, particularly in key locations such as Germany and Spain, which are set to see expansion over the next three years.”
The European Real Estate Logistics Census was conducted over the summer of 2023 by supply chain market analysts Analytiqa on behalf of Tritax EuroBox plc, an investor in European logistics real estate, and international real estate adviser Savills. The respondents were 256 occupiers, investors, developers, landowners, asset managers, consultants and agents across the pan-European market.
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