The expansion of the European logistics real estate market continued in 2018, ”said Prologis at today's press conference. Demand was strong, the vacancy rate declined, and the long-awaited increase in rental rates began.
At the beginning of 2019, more and more concerns were raised about the mutability of the capital market, about the trade tensions between the US and China and about the potential impact of Brexit on global GDP. Despite the fact that the logistics real estate market closed strongly in 2018, growing concerns at the beginning of the year will inevitably lead to the question: what can we expect in 2019?
European logistics real estate markets took a significant boost in 2018, predicting further expansion by 2019. Across Europe as a whole, net rents have risen by about 4.5 % in 2018, and we can expect a similar uplift in 2019.
The FM & Office 2019 conference will be held on May 8, where we will focus on the future of logistics properties. Experts invited to the professional event will discuss the most important issues and current processes related to the future of the market.
Currently there are several factors that strengthen the operation of the market at the same time and also the fundamentals are strong:
• low vacancy
• strong demand
• Increasing rental fees
• structured offers
• expanding e-commerce
• Increasing construction costs
3-5 years ago, the United Kingdom was the engine of logistical properties, but last year it changed and growth began in many parts of Europe. In the supply chain optimization the most important thing was the proximity to the consumer, the rapid service is valued mostly due to the growth in conquest of e-commerce.
"Demand should remain strong in the domestic market in 2019, most of the 100-150,000 square meter area which is under construction is a speculative development, that is also a mark of the confidence in market," said László Kemenes, CEO of Prologis, Hungary.
Due to the stable and expanding market, efficiency can also play an increasingly important role in energy efficiency in heating costs or in electricity consumption, but also invites new forms of clearing during contracts.
Clear lease is a shorter and simpler form of contract that can accurately plan costs over the entire lease period. In addition to rents, there are fixed fees for operating costs, which are calculated based on the experience of previous years. This method saves a lot of time and energy, which is ultimately reflected in costs.