Photovoltaic systems are a core element for CO₂ reduction and should ideally soon be found on all logistics halls.
The 6th study "Logistics and Real Estate" shows: Not only online trade and corona effects will lead to a huge increase in new construction in 2020. Nevertheless, the volume will not be sufficient to meet demand. On the other hand, soil sealing and source traffic are being criticized. The study therefore also shows how logistics real estate can become more sustainable.
The demand for logistics and storage space both among users and in the investment market remains very high and has even increased during the crisis. We therefore expect 2020 to be a new record year with 5.3 million sqm of new logistics space being built. However, the demand for new space up to 2030 will amount to 6.5 to 7 million square meters per year and will continue to significantly exceed supply.
In contrast to retail or hotel properties, logistics real estate is one of the winners of the crisis in the Corona pandemic. The systemic relevance of logistics became apparent during the crisis and the demand for logistics and storage space received an additional boost from the increasing market share of online trade.
We have published the new study "Logistics and Real Estate" in proven partnership with Berlin Hyp, BREMER, GARBE and Savills. For the study, the data from around 1,775 existing, under construction and planned logistics properties were evaluated by the end of July 2020.
New construction: More and more speculative projects prove optimism
The volume of completions remains at a high level. Recently, an increase in speculative versus demand-oriented construction activity has also been observed.
On the basis of projects currently under construction, we expect to see more than five million square meters of new construction area in 2020 - a new record. Project developers and investors are acting optimistically, assuming that demand for logistics space will continue to rise. The corona pandemic also shows that logistics is the lifeline of our economy and is essential for supplying the population. Intensive thought is being given to increasing storage in production and trade. The pandemic has also fuelled e-commerce. The already high demand for logistics space will continue to rise.
The top 5 most active logistics space project developers in the years 2015 to 2020 are headed by the Goodman Group (1.9 million sqm), followed by Panattoni (1.2 million sqm) and the VGP Group (around 950 thousand sqm). Position 4 and 5 go to Dietz AG (around 900 thousand sqm) and the GARBE Group (around 700 thousand sqm).
The regional focus remains on the logistics regions Frankfurt am Main, followed at a slight distance by Berlin, Düsseldorf, Rhine-Ruhr, Hamburg, Dortmund and Hanover/Braunschweig. In 2020, new building areas will be completed increasingly in the Berlin and Magdeburg area. However, construction activity is increasingly shifting to the periphery.
Investment market: GARBE overtakes Blackstone
In the investment market for German logistics, corporate and industrial real estate, the investment volume in 2019 reached a new record level of over 9 billion euros. A distinction must be made here: This was primarily due to increased interest in corporate real estate. In 2019, 5.4 billion euros were invested in pure logistics and warehouse real estate. In the first half of 2020, the investment volume for logistics and warehousing real estate already reached slightly more than EUR 2.7 billion, so that for 2020 as a whole, investments are expected to be similarly high as in 2019.
In the period from 2015 to 2020 the GARBE Group leads the ranking of companies with the highest investments in logistics real estate with around 1.9 billion euros. Blackstone (1.8 billion euros) and Frasers Property (1.7 billion euros) occupy the 2nd and 3rd places, followed by the China Investment Corporation (CIC) in 4th place and Union Investment at a slight distance behind. The latter, like the GARBE Group, has significantly increased its investments in the first half of 2020 by more than 500 million euros.
Looking at the countries of origin, it is noticeable that the share of German investors has increased from one third to now around two thirds since 2017. The regional investment focuses are similar to the new building projects the regions Frankfurt am Main, Dortmund, Düsseldorf, Rhine-Ruhr, Hanover/Braunschweig, Hamburg and Berlin. While in the first half of 2019 logistics and warehouse properties worth 1.5 billion euros were traded, the figure for the first half of 2020 was 2.7 billion euros.
Sustainability: Ecological and economic success factor
In the study "Logistics and Real Estate 2020", the focus topic of sustainability is examined from various perspectives in addition to the latest developments on the market for logistics real estate.
For example, sustainable logistics real estate is financed preferentially by banks because of its better future viability. At the study partner Berlin Hyp, for example, sustainable logistics real estate achieves higher lending values and often achieves better financing conditions than non-green logistics real estate.
Together, the study partners have formulated proposals to politicians to promote the construction of photovoltaic plants. This is because they make a decisive contribution to achieving climate policy goals at both the European Union and the Federal Republic of Germany. They are a core element for the CO₂ reduction in the course of climate protection.
Sustainability will play an increasingly important role in the consideration of new construction decisions. New construction on a greenfield site or the demolition of existing buildings and new construction (brownfield) are not always the most sustainable options when viewed holistically. In many cases, it is more resource-efficient to invest in older existing properties and continue to operate them.
Once the decision has been made in favor of a new building, it is important that the property is planned and realized in such a way that its resource consumption is as low as possible over its entire life cycle. In this context, it is important that CO₂ emissions are as low as possible and that CO₂ is neutral in terms of its operation. In addition, the use of recyclable materials within the scope of conversion and deconstruction measures improves the climate balance.
Investors with a long-term perspective will also give increasing weight to sustainability aspects in their investment decisions. User demand for energy-optimized logistics real estate is continuing to grow - as a result of both the own guidelines and the requirements of the clients. Or because it pays off: "A sustainable property is energy-optimized and at best even emission-free - but not necessarily more expensive because it has lower ancillary costs or even generates more energy than required.
Note: Here you can download the study: https://logistics-and-real-estate.com
Contact person: Patrik Völtz, Principal Investigator for Logistics Real Estate and Unternehmensimmobilien at bulwiengesa, voeltz [at] bulwiengesa.de