No end in sight for European logistics rental growth

Rental growth in the logistics sector is showing no signs of slowing at present, as tenants continue to compete aggressively for space in Europe’s core markets.

Alistair Calvert, CEO of Clarion Partners Europe, says most tenants are comfortable with signing inflation-indexed rental contracts, while the twin pressures of rising costs and a shortage of labor are slowing down construction and so reducing the supply flow of new assets.

“We’re achieving rental growth across all of our leasing activity,” says Calvert. “We’ve had three years in a row of record leasing uplifts, across the portfolio, with every transaction significantly outperforming the business plan, on average by approximately 20 percent.

“We are still seeing huge rental growth in most of our markets. And that’s coming in from a backdrop that already has exceptionally low vacancy, especially in those larger markets such as France and Germany. Therefore, it’s difficult to see how, ev