Latest research from global real estate advisor, CBRE, shows that the supply of European logistics space has dropped to a new low, with average vacancy rates across the region sitting just under 2.3%.
The low availability levels are restraining the number of units that can be offered to occupiers and have left many requirements unmet. Occupier demand while slightly lower than this time last year remains robust with take up year-to-date totalling 19.56 million sqm (2 million ft2) as at Q3 2022.
This imbalance between supply and demand continues to put pressure on rents, with several locations reporting further increases in their prime rents during Q3. Amsterdam saw a 25% increase in prime rents compared to Q3 2021. This was followed by Lyon, Bristol, and Copenhagen, which saw increases of 13%, 12%, and 8% respectively.
Simon Blake, Chairman, EMEA Industrial and Logistics at CBRE said: “Many locations across Europe are facing historically low vacancy levels and the supply response is being hindered by high borrowing costs, increasing construction costs and higher exit yields. Collectively, these factors make some developments unviable for now and are resulting in higher occupational costs, both through rental growth as well as indexation.”