The vast majority of markets monitored by Colliers International for its biannual EMEA Industrial and Logistics Rent Map experienced no change in prime warehouse rents in the second half of 2011. As for Greece due to the reduced marketability of industrial and logistics properties investors have adopted a wait-and-see strategy, rents remained stable in the second half of 2011, following the significant market downturn that took place in the last years .
HIGH AND LOWS OF PRIME WAREHOUSE RENTS
The most significant increases were recorded in the key Scandinavian and Baltic markets, with the highest increases taking place in Oslo (+8%) and in Gothenburg (+6.1%). In terms of annual change in prime warehouse rents, Moscow and Tallinn were the top performers reporting increases of 19.2% and 17.5% respectively. On the other hand, prime rents in the markets which had experienced the most significant falls in the first six months of 2011 remained flat while notable drops in the second half of 2011 were recorded in Vienna (-9%), Geneva (-6.3%) and Athens (-6%). Specifically, the latter saw rental values of light industrial/warehousing/logistics space reach €3.5 – 5.0/m2. It is worth mentioning that investment activity is extremely limited due to the fact that the market has yet to show signs of stability. However areas connected by Attiki Odos (Mesogeia, Asporpyrgos, Mandra, Magoula and Elefsina) attract the most interest and have the highest values.
STABLE YIELDS IN MOST MARKETS
The majority of monitored markets reported no notable shifts in prime yields during the second half of the year. Four markets witnessed slight yield compression including Dusseldorf (-25 bps) and Helsinki (-25 bps). After strong yield compression in the St. Petersburg and key Baltic centres in the first half of 2011, no further changes were recorded in those markets as their investment markets stabilised. For Athens prime yields seem to be stabilized, after the significant increases that took place in the last years, and are estimated at some 25 bps increase.
KEY TREND STABLE PRIME RENTS IN 2012
Over the next 12 months prime rents are set to remain stable across most of the key centres. Further rental increases are expected in Tallinn and in the main Russian logistics markets of Moscow and St. Petersburg. Markets such as Bratislava, Lisbon and Athens are set to experience prime rental decreases. Investment yields are broadly expected to remain unchanged; however, notable centres where we expect to see some compression are Frankfurt and Munich.
Ana Vukovic, Managing Director of Colliers International comments: “In Greece, the economic situations and conditions have played a key role in the market formation while influencing investors’ activities. If the country is to grow its logistics sector, it will need to attract the necessary infrastructure investment to make it attractive to global operators. However, increased yields combined with lowering of rental values will raise opportunities and motivate the market while equilibriums are expected to prevail in the medium term. High degree of accessibility, low time distance from urbanized areas through appropriate road networks, access to airports and ports, and availability of parcels of land suitable to attract industrial, warehousing and logistics activities, combined with the expected economic stability and recovery, will remain some of the key variables that affect the growth of the industrial and logistics market in Greece.”