The scarcity of space combined with growing e-commerce and good economic conditions are driving growth in leases, multi-storey buildings and brownfield development.
For a long time, trends in logistics leases followed a rather moderately rising sawtooth pattern. Index regulations increase the property rent over the years, but reletting begins at just above the starting level at best. Sustainable increases, if there were any, were only at locations with a great shortage of available spaces.
By the beginning of 2016, there was demonstrable and significant increase in logistics lease rates, which was not only a result of the strong demand, but also a result of the more restrictive administration of new built-up areas and a growing reluctance to approve logistics uses in an increasing number of locations. In our opinion, we do not expect this trend to change, even in the long term, in view of the demand that is expected to continue to go unmet.
In Germany, multi-storey logistics real estate was not considered to make good business sense as it did not offer returns within a reasonable amount of time, but here too, the shortage of space is accelerating development. Garbe is developing just such a building for Amazon in Bremen, with a total of 150,000 square meters of hall space on three levels. Of course, the e-commerce pioneer is ahead of the game here; it manages its integrated sorting and conveying technology with relatively low floor loads in spaces with low ceilings. Multi-storey logistics buildings for “conventional” logistics with at least 10 metre high ceilings and 5 tonne floor loads are possible, but so far in Central Europe these are only built in exceptional cases because of the resources required to construct them – not to mention the possibility of getting a building permit for these very tall buildings. However, in the foreseeable future these buildings will probably become the norm.
As a developer, Garbe is always in step with modern trends, though not always as the “first mover”, for good reason. Thus far, there has not been a satisfactory solution to the problem of operations with full lorries on upper floors. We are working on alternative solutions to the ramps that are usually used currently.
Our project in Kempen is quite a typical example of the growing acceptance, on the part of investors, of brownfield sites and, at the same time, of worthwhile investments in Core+ products. Originally developed for the British Rhine Army, after its acquisition in 2016, a cold-storage and a workshop building were demolished to speculatively build, in addition to the approximately 23,000 square metre rented inventory, an equally large modern logistics warehouse, which is now being rented. The inventory shows continuous rental income during the development phase and then a long earnings phase in new construction. In ten to fifteen years the next step in the value creation chain takes place when the old inventory is demolished and redeveloped in a market environment that will then be characterised by an even greater shortage of available space than there is today. Our forecast, which, unfortunately, we won’t be able to prove is true until about 2035, is that this new construction will be multi-storey!
We use cookies on our site. Some of them are essential, while others help us to improve this website and to show you personalised advertising. You can either accept all or only essential cookies. To find out more, read our privacy policy and cookie policy. If you are under 16 and wish to give consent to optional services, you must ask your legal guardians for permission. We use cookies and other technologies on our website. Some of them are essential, while others help us to improve this website and your experience. Personal data may be processed (e.g. IP addresses), for example for personalized ads and content or ad and content measurement. You can find more information about the use of your data in our privacy policy. You can revoke or adjust your selection at any time under Settings.
If you are under 16 and wish to give consent to optional services, you must ask your legal guardians for permission. We use cookies and other technologies on our website. Some of them are essential, while others help us to improve this website and your experience. Personal data may be processed (e.g. IP addresses), for example for personalized ads and content or ad and content measurement. You can find more information about the use of your data in our privacy policy. This is an overview of all cookies used on this website. You can either accept all categories at once or make a selection of cookies.