New Constructions in the German Logistics Real Estate Market Are Gaining Momentum

In the first half of 2024, new developments in the German logistics real estate market have gained momentum. Approximately 2.3 million square meters of new construction space were reported by the comprehensive logistics real estate advisor Logivest after evaluating its own research data. Notably, around 38 percent of the projects were already developed on brownfields. This is currently about six percentage points more than in the previous year, 2023.

(Munich) “Especially when it comes to sustainability, reducing land consumption and thus utilizing and revitalizing industrial wastelands is playing an increasingly important role,” confirms Kuno Neumeier, CEO of the Logivest Group.

So far, greenfield developments, with around 62 percent, are still leading, but in the logistics region of Duisburg/Niederrhein, projects on undeveloped land are declining. For example, Prologis is developing a logistics facility covering approximately 57,000 square meters for Yusen Logistics on a brownfield in Bottrop. Additionally, the largest project of the first half of the year, the new logistics center of Mercedes Benz, which has around 130,000 square meters of hall space, is being built on the site of a former particle board factory in Bischweier. Both projects will also be equipped with roof-mounted photovoltaic systems, further enhancing the sustainability aspect and enabling a certain degree of energy independence.

Although the development of an industrial wasteland is always a black box at first, according to Neumeier, a former industrial site can offer advantages over a greenfield, especially in terms of infrastructure. For instance, high-capacity network connections, which are needed for a comprehensive charging infrastructure, are often already available on industrial sites.

Acceptance of Logistics Real Estate

According to an analysis by Logivest, around 5.5 million square meters of brownfield are already available for new construction projects starting this year. This potential can gradually be tapped, especially considering the low acceptance of logistics real estate and the only hesitant tenders for new commercial spaces from municipalities.

Photo: © Logivest