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The logistics real estate market in strong growth

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The logistics real estate market in France is showing rapid growth in 2021. An all-time high, with an increase of 34% compared to 2020. According to EOL, this is even an all-time record and the best year since the late 90s.

Despite the health crisis, the logistics real estate market is soaring

There are then more than 3,700,000 m² transacted, ICPE buildings of more than 10,000 m². Thus, despite the health crisis, and despite the shortages of premises in some regions, including Bordeaux, the logistics real estate market regularly exceeds forecasts. The office real estate sector still accounts for two-thirds of volumes, but logistics is taking up more and more space.

A particularly dynamic market

Among logistics real estate transactions, the Hauts-de-France region alone represents 28% of the global market. It shows phenomenal growth, making the Paris – North of France area a particularly dynamic market. Thus, the 4 backbone markets (Lille, Paris, Lyon and Marseille) represent 70% of the demand placed. And this, despite the lack of available offers that limits the performance of Lyon and Marseille.

There is also an increase in operations of more than 50,000 m². After a lull in recent years, they are once again occupying a more significant share, with 28% of the market.

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E-commerce is increasing the need for bonded warehouses.

On the customer side, 50% of transactions are ordered by logistics providers. For good reason, e-commerce largely carries the logistics sector. It concerns the entire market, including mass distribution, service providers, classic retailers and pure players.

Industrial investment makes the difference

With the marked growth of e-commerce during the crisis, all sectors are therefore taking the turn. Beyond volumes, logistics real estate is also doing wonderfully in terms of value. This time, however, it is industrial investments that make the difference. According to CBRE, they amount to 6.4 billion euros in 2021, or 25% of all investments in commercial real estate (offices, shops, warehouses, etc.).

On the other hand, the growth of logistics real estate is slowed down in some regions by the shortage of offers. This is particularly the case of Bordeaux, Nantes, Lyon or Marseille where land of more than 5 hectares is rare. A scarcity of supply that leads to a multiplication of prices by 3 on certain sectors, both on the price of land, construction or rents.

The logistics real estate market in Nouvelle-Aquitaine

Nouvelle-Aquitaine, largely supported by the Bordeaux metropolis, has only 70,000 m² of logistics real estate transactions. In an area that is very attractive for companies, this weak performance is not due to a drop in demand. On the contrary, the needs are growing but the market is in tension with few offers to offer. Thus, all the operations launched in white were commercialized. The vacancy rate of locals is therefore particularly low, including for very large supermarkets.

In Bordeaux metropolis, commercial real estate occupies a central place in urban planning projects. The new districts, particularly through the Bordeaux Euratlantique programmes, provide for large quantities of offices. On the other hand, for logistics, the possibilities remain limited.

Sources

The logistics real estate market soars in 2021″, EOL, press release of 19 January 2022

Real estate: the shortage looms in Bordeaux and Nantes, Logistics Strategies, article of 24 January 2022

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