29/09/21

Key factors of 2021 Industrial-Logistic market : stability and resiliency

In H1 2021, rental and sales warehouse demand returned to its normal pre-Covid levels, as well as price stability when commercializing either product, registering only the minimal increases due to the usual development of the market.

According to the new Forcadell Report, the Industrial-Logistic sector maintains its strength throughout 2021, after the Covid-19 crisis uncertainty. This is an industry with great potential, with a long distance to run in the next fiscal years, a fact which clearly reflects in investors’ appetite, which centers not only in logistics but now also in industrial products. 

RENTAL WAREHOUSES MARKET

Rental warehouse demand is rocketing higher, according to the New Forcadell Report throughout the first 2021 half-year, registering a 22% year-on-year increase respect the same period of the past Fiscal Year. The industrial market has been aligned toward this trend over the years, and once the toughest period of the pandemic was over, its strength and resilience has remained. Respect sqm space demand, requirements for warehouses of up to 500 sqm were the most sought after (almost half of the total, 48%) followed by the 501 to 2,500 sqm (43% as a whole).

The Forcadell Report highlights that in H1 2021, vacancy of industrial rental warehouses didn’t register remarkable adjustments, beyond the classic fluctuations of the market. In the first half-year, the municipalities of Barcelonés, Baix Llobregat, Vallès Oriental and Vallès Occidental accumulated most of the available rental industrial space. Gerard Plana, Forcadell’s Industrial-Logistic director, warns that, “the current warehouse supply is clearly insufficient since they do not offer the features and facilities that companies require.

On the other hand, and in certain specific cases, new promotion industrial projects have been built as turnkey products.”Rental prices remained stable during H1 2021, while average prices for rental warehouses in the first half–year stood at €3.3/sqm. Considering that during H1 2020, the average price stood at €2.9/sqm, the increase has been considerably low.

INDUSTRIAL WAREHOUSES FOR SALE

Demand for sales of industrial warehouses registered a slight decline throughout the first half-year, with a -8.6% year-over-year decrease. However, the strength of the industrial sector has been enough to overcome the slowdown that health crisis presented, and start 2021 with stability and excellent prospects. When analyzed by surface space, 71% of sales demand required the smaller range of up warehouses of to 1,000 sqm, followed by the 1,001 to 2,500 sqm range, which cover the 20% quote. 

In H1 2021, the fact that stands out once more is the inadequate supply of industrial warehouses. A considerable part of the stock is made up of industrial units built in the 80’s and 90’s, being of course deemed obsolete. By zones, Baix Llobregat and Vallés Occidental were the municipalities with most supply rates, 33% and 21% respectively. In the Barcelonès area, the quote remained low, at 12%.

Regarding prices, throughout H1 2021 Forcadell’s data indicates an upward trend, following the alignment of the past years. The average price for warehouses for sale stood at €624/sqm, registering a y-o-y increase respect the last year’s same period. The Barcelonés, Maresme and Baix Llobregat municipalities also registered the highest average prices, with the maximum price reached by the Barcelonés municipality at €1,370/sqm.

INDUSTRIAL LAND MARKET

Throughout H1 2021, demand for industrial land maintained the same trend as in the past FYs, focusing in the development of logistic projects. Investor interest is solid, since e- commerce is the standout industry sector. The development of turn-key logistic projects, as well as small distribution storage units located in the proximities of urban centres continues to rise, due to the fact that companies are constantly trying to reduce delivery times. In H1 2021, prices of industrial lands in Catalunya registered a slight variation respect the same period on the last year (16.5%), standing at an €198/sqm average price.

LOGISTIC AND INVESTMENT

The logistic market closed the first half-year with a very good performance, reaching 382,597 sqm in take-up figures. This represented a year-on-year increase respect H1 2020 (197,382 sqm take-up) and a 15% rise with the past pre- pandemic period (H1 2019‘s take-up was 332,843 sqm).

“The reasons behind this obvious recovery are based on the health crisis bolstering e-commerce’s potential, which had already been standing out for a long time now. Many companies have felt pressured by consumers to use this type of model, giving logistic units and urban storage spaces a strategic role in order to create the best logistic and delivery process, in terms of efficiency and speed”, underlines Gerard Plana, Forcadell’s Industrial-Logistic department director.

The market continues showing activity in all three Rings, where there is a good alignment between supply and demand. Moreover, during this period, new development warehouses transactions have been built by speculative or turn-key mode, proving the high demand of the logistic sector and the urgent need of renewing the industrial real estate stock. The logistic market has a low density of available supply, therefore, prices are extremely sensible facing new offerings. Take-up figures strengthen the Logistic Sector as a main investor focus. Even if logistic product has always been initially the main investment driver, we are slowly starting to see that some investments are destined to core industrial product.

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