Logivest Analyzes the German Logistics Real Estate Market 2020

The consulting company Logivest has analyzed the data of the German logistics real estate market for 2020. The new construction volume amounts to 4.8 million square meters, which represents an increase of almost 4.5 percent compared to 2019. There is a surprising winner among the locations, the Leipzig/Halle region with around 360,000 square meters. Online retail drives new construction.

(Munich) The German logistics real estate market was able to develop positively even in the year 2020, which was marked by the Corona pandemic and the accompanying economic crisis. This is the conclusion reached by the consulting company Logivest, which specializes in logistics real estate, after evaluating the nationwide research data for the entire year (data collection until 01.12.2020). With a new construction volume of around 4.8 million square meters, the already high level of 2019 (4.6 million square meters) was exceeded by almost 4.5 percent. Logivest always measures the start date of construction. In the past five years, the volume was only larger in 2018, with over five million square meters.

“This result is a very positive signal for the logistics market and underscores the stability of this asset class. The demand for space remains unbroken and will continue to rise due to the booming online retail,” says Kuno Neumeier, CEO of Logivest.

Leader Leipzig

Throughout the year, the 23 top logistics regions in Germany showed a very dynamic performance. While nine regions were able to significantly exceed their previous year’s values, the other 14 top logistics regions fell behind the results of 2019. The most impressive rise was shown by the top logistics region Leipzig/Halle: from 22nd place (2019) to 1st place (2020). With a new construction volume of 360,000 square meters, the previous year’s value was exceeded by more than three times. Second place was achieved by the Berlin/Brandenburg region with 355,000 square meters (2019: third place). The newly constructed Tesla Gigafactory is not included in this survey, as it is a factory site where production and logistics cannot be separated. The third place was taken by the Hannover region with 320,000 square meters (2019: fourth place).

There are also declining regions

In contrast, the top logistics regions in North Rhine-Westphalia experienced a decline. In Duisburg, the new construction volume decreased to just over 160,000 square meters – in 2019, this region was still in first place with more than 460,000 square meters. The Cologne Bay also fell by more than half to now just under 120,000 square meters. In the eastern Ruhr area, the decline to 193,000 square meters was less pronounced but still significant (2019: 271,000 square meters). Even the once top region Hamburg could not maintain the high level of 2019 and recorded around 80,000 square meters less.

There was a noticeable amount of movement outside the top logistics regions in 2020. The first quarter recorded a new high with around 43 percent of new constructions outside the top locations. Even for the entire year, the share is comparatively high at 25 percent. “The dwindling spaces in top locations and the focus on online retail lead to a stronger expansion into the periphery. On the other hand, shippers and logistics service providers are questioning their previous location strategies,” explains Neumeier.

E-Commerce Shapes New Construction

The online retail sector, which has gained further importance in light of the pandemic, has also significantly influenced the logistics market in 2020. Four of the five largest new constructions of the year were created for this type of use. The largest new construction project was realized by Amazon in Gera with a volume of approximately 153,000 square meters over three floors for self-use. In second place is the international logistics real estate developer SEGRO with around 86,000 square meters of developed space in the Logistics Park Leipzig, which was rented to the online retailer Relaxdays. In third place is a regional warehouse that Rewe realized in Henstedt-Ulzburg with nearly 85,000 square meters for its own use. Fourth place is a logistics hall in Lich, which Dietz AG developed for the online furniture retailer Wayfair, and fifth place is a hall in VGP Park in Göttingen, which is also intended for e-commerce use.

Outlook for 2021

“With this excellent result, we are starting positively into the new year. It can be assumed that the logistics real estate market will also show stability in 2021. Even though the Corona pandemic and Brexit provide little planning security, large projects have already been planned, and the demand for space remains present,” predicts Neumeier.

Photo/Graphics: © Logivest

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