The cycle of soaring rent rates in Europe’s top logistics markets has ended. During the second half of 2024, the average prime rent increased by just 6 cents, rising from 7.30 euros to 7.36 euros per square metre. It is the equivalent of 0.9 percent and thus trails the inflation rate in the eurozone, which was 2.4 percent at the last count. The 2024 take-up in Europe, while representing a modest year-on-year decline (-7 percent), actually exceeds the pre-pandemic figures by a narrow margin. The vacancy rate across Europe was just under six percent.
These are among the findings that GARBE Research presented in its latest GARBE PYRAMID MAP, the 2024 year-end update of the company’s overview of prime rents and prime net initial yields for the 121 most important logistics real estate submarkets in 25 European countries.
Consolidation after the Boom Years
“The slow growth is attributable primarily to the economic situation in Europe. Many companies have stopped expanding for the time being and are consolidating instead. We need to remember that the pandemic saw tremendous demand for logistics facilities. That cycle has now run its course. Also worth noting is the large volume of construction lately. Available supply has recently increased as a result of a time lag between the development and successful letting of new structures. However, the gap is about to close again because building activity has been slowing lately,” elaborated Tobias Kassner, Head of Market Intelligence and Sustainability at GARBE Industrial Real Estate. With respect to the increased vacancy rate, Kassner had this to say: “The current vacancy rate may be higher than it was during the pandemic years, which saw exceptionally low levels between two and three percent. But historically speaking, a rate of around six percent is normal.”
You can now read the full press release at the link below
