Regarding absorption, the consultancy's European Logistics report highlights that 26 million sqm of logistics space were contracted in Europe in 2020, 12% more than the level registered in 2019 and 19% above the average of the last five years, reaching record levels in Europe.
The country at the head of these data is Germany, with a total absorption of 6.8 million sqm, which represents an increase of 3% in the last five years, and 26% of the total in Europe. Poland has also registered a record year of occupation of logistics space with a total of 5.2 million sqm, 45% above the average of the last five years. On the other hand, 2.6 million sqm of logistics space were contracted in the Netherlands, 0.3% more than in the last five years. Likewise, the United Kingdom has experienced an increase of 58% compared to the last five years, representing a total of 4.7 million sqm. In Spain, the volume registered in the two main markets (Madrid and Barcelona) exceeded 1.35 million sqm, which represents a year-on-year increase of 18%. The excellent performance of Madrid (+ 70% compared to 2019) compensated for the slowdown in the Barcelona market, where the modest level of availability (3.4%) continues to oppress activity in the user market.
In terms of investment, the Savills Aguirre Newman report specifies that the main most active European countries have been the United Kingdom (10,270 million euros and + 13% in the five-year average), Germany (6,600 million euros, + 16%) and France (4.2 billion euros, -23%), which have concentrated the majority of investment operations, as both national and cross-border buyers have opted for the main markets. However, Poland (2,600 million euros, + 131%) and Sweden (3,400 million euros, + 45%) have stood out as the markets that have obtained the most significant results compared to the average of the last five years. In Spain, the investment market slightly exceeded 1,500 million euros. In the comparison with the previous year, the figure decreased by 8%, but it must be remembered that the portfolio of Colonial assets that Prologis bought represented just over 25% of the total. Extracting this operation from the analysis, the market experienced a growth of 23%.
Antonio Montero, Head of Logistics at Savills Aguirre Newman, explains that «demand continues to exceed supply throughout Europe and given the attractiveness of the sector, investors are looking outside the main locations for more attractive yields in markets such as Spain, with greater potential for growth».
Mike Barnes, head of European Research at Savills, points out that: «2020 has been a very important year for the logistics sector in Europe due to the impact that Covid-19 has had on e-commerce. High growth has been achieved in electronic commerce and therefore in the demand for logistics assets. Although it will begin to normalize at some point, we believe that the short-term impact of local specific lockdowns will continue to drive online spending».
The influence of Asia
According to Savills Aguirre Newman, there is increasing demand from Chinese ecommerce operators operating through their own distribution centers and selling through established ecommerce marketplaces in European markets. China's One Belt One Road (OBOR) initiative continues to expand across Europe, with rail freight now extending to Duisburg, where the largest port terminal in Europe is planned to be developed by the end of 2022.
The international consultancy indicates that although it is still early for the demand of Chinese operators in Europe, we anticipate that this trend will accelerate in the coming years, starting in Central and Eastern Europe and extending to the West.