With a take-up of 452,800 m², the owner-occupier and rental market for logistics and industrial properties in the three top markets of North Rhine-Westphalia recorded a significant increase in the first half of the year. The result achieved by all market participants in the conurbations of Cologne, Düsseldorf and the Ruhr area is 151,070 m² or 50 % up on the same period last year.

Accordingly, it is currently only 5% below the average. Nevertheless, the past six months only ranked fourth out of five. Only the first half of 2023 was lower at 301,730 m².

The market is dominated by lettings in existing space with 299,650 m² or 66.2%. At +124,050 m² or +70.6% compared to the same period last year, they represent the most significant increase of all types of agreements (H1 2023: 175,600 m² or 58.2%). New build lettings account for 96,050 m² or 21.2 %. Coming from 126,130 m² or 41.8 %, they are therefore significantly less important and also lost 30,080 m² of take-up in absolute terms (or -23.8 %).

Rental transactions in properties on former brownfield sites totalled 57,100 m² or 12.6 %. We did not observe any transactions on former brownfield sites in the previous year. As in the same period last year, there were no rental transactions by owner-occupiers. The last contracts for properties for owner-occupation were concluded in the 1st half of 2022 with 38,900 m² of 519,500 m² (or 7.5 %).

In terms of building type, big box space continues to dominate at 311,600 m² or 68.8 % with a significant absolute increase of 103,534 m² or 49.8 % (H1 2023: 208,066 m² or 69 %). Other properties that cannot be categorised as big boxes or business parks account for 86,360 m² or 19.1 % (H1 2023: 49,633 m² or 16.4 %). This corresponds to an absolute increase of 36,727 m² or 74%. Business parks increased by 10,809 m² or 24.5 % to 54,840 m² or 12.1 % (H1 2023: 44,031 m² or 14.6 %). All property types recorded growth, especially large-scale lettings, although their share of total take-up remained almost the same compared to the previous year.

The Ruhr region remains in second place with take-up of 164,800 m² or 36.4 % (H1 2023: 92,330 m² or 30.6 %). An increase in take-up of 72,470 m² compared to the same period last year represents an increase of 78.5 %. Only the Düsseldorf sub-market is in decline and currently stands at 113,900 m² or a share of 25.2 %. Starting from 137,000 m², this represents a decline of 16.9 % or 23,100 m². However, the two submarkets of Cologne and the Ruhr region were able to more than compensate for this decline, resulting in an increase of 151,070 m² for the NRW market as a whole in a half-year comparison.

The driving force behind demand for space was e-commerce with 121,400 m² or a share of 59.3%, which increased by 60,190 m² or 98.3% from 61,210 m² or 87.1%. Traditional retail accounted for 83,400 m² or 40.7%, which corresponds to an increase of 74,350 m² or more than a ninefold increase from just 9,050 m² or 12.9% in the previous year.

As a result of this strong growth, traditional retail was able to increase its share of take-up in the retail category by 27.8 percentage points (the dominance of e-commerce from the previous year was reduced accordingly by these 27.8 percentage points). The logistics/distribution sector follows in second place with 181,600 m² or 40.1 % (H1 2023: first place with 148,185 m² or 49.1 %). The growth of 33,415 m² or 22.5 % is not enough to maintain first place. The 5-year average of 227,636 m² was also missed by a significant 20.2 % despite the growth.

Manufacturing is again in third place with 39,000 m² or 8.6 % (H1 2023: 53,070 m² or 17.6 %). With a decrease of 14,070 m² or 26.5 %, this is the sharpest decline of all sectors. Nevertheless, the 5-year average of 37,276 m² will be exceeded by 4.6 %. The miscellaneous “supply/other” category remains at the bottom of the table with 27,400 m² or 6.1 %, down by a moderate 2,815 m² or 9.3 % from 30,215 m² or 10 %. The declines in manufacturing and the miscellaneous category were more than compensated for by the in some cases significant increases in retail and logistics/distribution.

In third place comes the size category between 3,001 and 5,000 m² with 37,800 m² or 8.3 %, down by 3,315 m² or 8.1 % from 41,115 m² or 13.6 % (the only year-on-year decline). The next smallest category between 1,000 and 3,000 m² follows in fourth place with 7.8 % or 35,315 m² after 30,406 m² or 10.1 %, which corresponds to an increase of 4,909 m² or 16.1 %. In last place are micro-spaces of less than 1,000 m², which at 1.2 % or 5,400 m² continue to be of comparatively minor importance and were able to increase by 2,070 m² from 3,330 m² or 1.1 %.

Outlook

Due to the economic situation, the top NRW markets for industrial and logistics properties have returned to their normal level. Demand is moderate and companies are no longer making short-term decisions. New builds are not planned until 2025/2026; whether they will be developed speculatively depends on whether investors and property developers become more courageous again.

In the first half of the year, the Düsseldorf market for logistics and industrial space newly taken up by owner-occupiers and tenants was unable to match the positive performance of the same period last year, when take-up rose by 10,900 m² or 8.6% to 137,000 m². At 113,900 m², take-up by all market participants is currently 23,100 m² or 16.9 % below the previous year's figure. In a 5-year comparison, the result is only in 4th place and is only undercut by H1 2022 with 100,280 m². The below-average result is also reflected in the 5-year average, which stands at 128,056 m² and is currently missed by 11 %.

Four out of five square metres were taken up in existing properties (93,450 m² or 82 %), which corresponds to an increase of 27,350 m² or 41.4 %. In contrast, take-up in new builds plummeted from 70,900 m² or 51.8 % in H1 2023 to 20,450 m² or 18 %, which is just over a fifth of the previous year's figure. Brownfield space continues to play no role on the Düsseldorf market. As in the previous year, the Düsseldorf industrial and logistics property market is purely a letting market. We did not register any owner-occupier transactions.

In contrast to the previous year, lettings in other properties, i.e. not big box properties or business parks, led the way in terms of building type with 46,260 m² or 40.6% (H1 2023: 23,580 m² or 17.2%), which is almost double the previous year's figure. Big box properties follow in second place, contributing 37,300 m² or 32.7 % to take-up and thus recording a significant decline of 68,850 m² or -64.9 %. Business parks once again brought up the rear with 30,340 m² or 26.6 %, more than quadrupling or increasing by 23,070 m² after 7,270 m² or 5.3 % in the same period of the previous year.

Sector ranking: Logistics/distribution clearly ahead, but almost halved compared to H1 2023

The leading sector of rental space in the Düsseldorf industrial and logistics market is once again the logistics/distribution sector. 58,200 m² or more than every second square metre (51.1%) is accounted for by this sector in the months from January to June 2024. It is also responsible for all of the top deals, which cumulatively account for 37,300 m² or 64.1% of take-up in the sector.

However, at -49,830 m² or -46.1 %, the take-up of 108,030 m² has also halved the most significantly of all sectors. The sector thus recorded the largest and only loss of importance compared to retail, manufacturing and other, with -27.8 percentage points of the share of total take-up. The 5-year average of 70,765 m² is currently being missed by a significant 17.8 %.

Retail is again in second place with 22,800 m² or 20 %, up from 18,280 m² or 13.3 %. Due to the slump in logistics/distribution, the sector was able to gain 6.7 percentage points in proportionate take-up, with absolute growth of 4,520 m² or 24.7 %. However, the 5-year average of 39,175 m² was missed by 41.8 %, meaning that take-up in the retail sector is still well below the sector average despite the growth. The e-commerce sub-category accounts for 65.8% or 15,000 m² (H1 2023: 13,230 m² or 72.4%), while traditional retail accounts for 7,800 m² or 34.2% (H1 2023: 5,050 m² or 27.6%).

The penultimate category is “supply/others” with 16,900 m² or 14.8%, which did not record any completions in the previous year. At the bottom of the ranking is the manufacturing sector with 16,000 m² or 14 %, coming from 10,690 m² or 7.8 % (+ 5,310 m² or +49.7 %), which thus exceeded the 5-year average of 11,712 m² by a clear 36.6 %.
 

Units between 3,001 and 5,000 m² account for 9,200 m² or a share of 8.1 % and thus once again occupy fourth place (H1 2023: 4,465 m² or 3.3 %). Small to medium-sized spaces between 1,000 and 3,000 m² achieved the second-highest take-up in the past six months with 21,815 m² or 19.2 % (H1 2023: 12,275 m² or 9 %) and recorded growth of 9,540 m² or 77.7 %. At 4,000 m² or 3.5 %, micro spaces of less than 1,000 m² once again played a subordinate role in terms of take-up after 2,095 m² or 1.5 % in the first half of 2023.

Outlook

The Düsseldorf industrial and logistics property market is characterised by a shortage in the mid-range space segment of 2,000 to 7,000 m². There is virtually no space available in this size range. Rents have now reached a high level and further developments remain to be seen, although we assume that the peak has slowly been reached.

Cologne's owner-occupier and rental market for logistics and industrial properties has clearly broken the downward trend of the previous two years. With an increase of 101,700 m² to the current 174,100 m², take-up by all market participants has risen by an impressive 140.5 %. This is more than double the 72,400 m² recorded in the first half of 2023 and represents the second strongest first half of the year since we began keeping records (only H1 2021 with 195,000 m² was more successful). The 5-year average of 126,770 m² is currently exceeded by a significant 37%.

Cologne's industrial and logistics property market was exclusively a tenants' market in the first six months of 2024; no owner-occupier transactions were registered. Existing properties absorbed 98,500 m² of space or 56.6 % of the total market, up from 65,770 m² or a share of 90.8 %. However, the increase of 32,730 m² or 49.8 % also means a loss of 34 percentage points in the share of take-up. Although more than every second square metre accounted for total take-up in the past six months, this is significantly less than in the previous year, when it was 9 out of 10.

Lettings in new buildings totalled 75,600 m² or 43.4%, an increase of 68,970 m² or eleven times the previous year's figure of just 6,630 m². Following the significant slump in the same period last year, the current good result is back to the level of the first half of 2022, when take-up from new build lettings totalled 77,900 m². As in previous years, brownfields, i.e. the development of brownfield sites, do not play a role in the Cologne market.

In terms of building type, large-scale properties, so-called big boxes, dominate the market with 150,700 m² or a share of 86.6 % (H1 2023: 37,201 m² or 51.4 %). They thus quadrupled in absolute terms to 113,499 m² and also increased by 35 percentage points in percentage terms. Large spaces, which are so important for industry and logistics, are the only property type to see a significant increase in take-up in the first half of 2024, massively overcompensating for the decline in business parks and other properties. Business parks are again in second place with 15,200 m² or 8.7 %, followed by 24,280 m² or 33.5 %, which corresponds to a delta of 9,080 m² or -37.4 %. The category of other properties brings up the rear with 8,200 m² or 4.7 % (H1 2023: 10,919 m² or 15.1 %, which corresponds to a delta of 2,719 m² or 24.9 %).

Sector ranking: retail with an outstanding first half-year

With 118,100 m² or 67.8% (H1 2023: 23,540 m² or 32.5%), retail was not only the sector with the highest take-up in the first half of 2024, but also the category with the most significant growth (more than fivefold) with an increase of 94,560 m². The 5-year average of 69,620 m² was exceeded by a significant 69.6 %.

At 75,600 m² or 64 %, the majority of take-up was accounted for by the sub-category of traditional retail, after we did not record any deals in the previous year. Take-up in the e-commerce sub-category totalled 42,500 m² or 36% (H1 2023: 23,540 m²; growth of 18,960 m² or 80.5%). Fressnapf's take-up of 72,000 m² accounts for 95.2% of take-up in traditional retail, while Woltu GmbH's take-up of 39,000 m² accounts for 91.7% of take-up in e-commerce. In total, the two deals account for 110,995 m² or 94% of take-up in the retail sector. 

The logistics/distribution sector follows in second place with 46,400 m² or 26.7 %, having previously been in third place with 14,865 m² or 20.5 %. This corresponds to an increase of 31,535 m² (more than tripling), topping the 5-year average of 39,513 m² by 17.4 %. More than a third of the sector's result can be attributed to the take-up by Blitz Distribution with a take-up of 18,000 m² (38.8 %).

In third place is the previous bottom performer, manufacturing, with 8,100 m² or 4.7% after 9,780 m² or 13.5% in the first half of 2023 (slight decline of 1,680 m² or 17.2%). The current half-year result is 19.7% below the 5-year average of 10,084 m². In last place is the formerly top-ranked miscellaneous category “supply/others” with 1,500 m² or 0.9 %, down from 24,215 m² or 33.4 % (-22,715 m² or -93.8 %).

The previously leading space between 3,001 and 5,000 m² came in second place with 9,100 m² or 5.2 % and, at 14,649 m² or -61.7 %, lost the most space take-up of all categories compared to the same period last year. Smaller to medium-sized spaces between 1,000 and 3,000 m² continued to accumulate the second-lowest take-up of the past six months at 6,000 m² or 3.4 %, down from 10,950 m² or 15.1 % (decline of 4,950 m² or 45.2 %). Very small units of less than 1,000 m² continue to play a subordinate role with take-up of 300 m² or 0.2 %.

Outlook

We are observing a cyclical reluctance to conclude rental agreements in the Cologne market for industrial and logistics properties. There are currently a number of new developments in the pipeline, although rents are expected to be over EUR 9 per square metre. It remains to be seen how these new rents will be received and accepted on the market.

The owner-occupier and rental market for logistics and industrial properties in the Ruhr region recorded significant growth in the first half of the year. With take-up of 164,800 m², the market is 78.5 % up on the same period last year. The result achieved by all market participants is 72,470 m² or 78.5 % higher than in the same period last year. After four consecutive declines in the first half of the year, we have registered an increase in take-up in the Ruhr region for the first time again.

Nevertheless, the first half of the year is well below average: the 5-year average of 223,886 m² has currently been missed by 26%. Lettings in existing properties are clearly in the lead with 107,700 m² or 65.4 %. This corresponds to an increase of 63,970 m² or more than double (+146%) compared to the first half of 2023 (43,730 m² or 47.4 %). Contracts for new builds on former brownfield sites, i.e. new build developments on former brownfield sites, accounted for take-up of 57,100 m² or 34.6 %. No transactions were recorded in this category in the same period of the previous year.

In contrast to previous years, completions in new builds on greenfield sites did not play a role in the first six months of 2024 (H1 2023: 48,600 m² or 52.6 %). The brownfield completions alone compensate for the total loss of new-build space. Added to this is the growth in existing space, resulting in a year-on-year increase of 72,470 m² in total.

The Ruhr region is also a pure tenant market in the past six months; as in the first half of 2023 and 2022, no owner-occupier agreements were concluded. In terms of building type, rentals in big-box properties continue to dominate the market. With a share of 75%, this category accounts for three out of every four square metres taken up, or 123,600 m² (H1 2023: 64,715 m²), almost doubling with an increase of 91%.

The other properties category (no properties in Bix Boxes or business parks) also made significant gains and is in second place. With a gain of 16,766 m², they doubled their take-up to 31,900 m² (H1 2023: 15,134 m²). Lettings in business parks continue to play a subordinate role with 9,300 m² or 5.6 %: Compared to the same period last year, this is a decrease of 3,181 m² or -25.5 %.

Sector ranking: Logistics/distribution takes up half of the space

The leading sector in terms of take-up is currently logistics/distribution with 77,000 m² or 46.7 %. This represents a significant increase on the previous year (25,290 m² or 27.4 %, 3rd place). While in the previous year only just over one in four square metres was attributable to the decrease in logistics/distribution space, this figure is now almost one in two.

The most significant absolute increase of 51,710 m² represents more than a tripling (+204.5 %). Nevertheless, the long-term average of the last five first half-years cannot be reached. This is 117,358 m² and was missed by a clear 34.4 %. Three of the top five deals were in the logistics/distribution sector and accounted for a total of 59,770 m² or 77.6 % of take-up. A large part of the half-year result is therefore attributable to a small number of large deals. At 63,900 m² or 38.8 %, the retail sector once again took second place. Although it performs better in a direct comparison of the first six months, it is still not at the typical level for the Ruhr region. The growth of 35,460 m² or +124.7 % (H1 2023: 28,440 m² or 30.8 %) is not enough to reach the 5-year average of 82,248 m². The mark was missed by a clear 22.3 %. The two contracts signed by the e-commerce company Euziel, totalling 63,900 m², are the market leaders.

E-commerce is responsible for 63,900 m² of take-up in the retail category, exceeding its 5-year average by a significant 42.7 % (44,780 m²). In contrast, not a single take-up by companies in the traditional retail sector was recorded in the first six months of the current year. In the same period of the previous year, only 4,000 m² were taken up, corresponding to a share of 14.1 %. The average of the last five first six months shows that traditional retail plays a subordinate role for the market in the Ruhr region, as it currently stands at 6,833 m² - even lower than the average for the miscellaneous category, which currently stands at 8,800 m².

The manufacturing sector follows in third place with 14,900 m² or 9 %. Coming from first place with 32,600 m² or 35.3 %, manufacturing is the only sector with a decline in take-up (totalling 17,700 m² or 54.3 %). Despite the significant decline, the 5-year average was only missed by 3.7 % (15,480 m²).

The miscellaneous category “others/supply” continues to bring up the rear with 9,000 m² or 5.5 %. Compared to the previous year, this is an increase of 3,000 m². The additional decrease in space due to the logistics/distribution and retail sectors contributed significantly to the strong half-year result and more than compensated for the delta in the manufacturing sector. In both cases, it is a few outstanding large deals that make the difference.

Space in the category between 5,001 and 10,000 m² came in third place with 13,000 m² or 7.9 %, up from second place with 25,513 m². Among all space categories, they experienced a decline of 12,513 m² or -49 %. This is a halving compared to the same period last year.

Units between 3,001 and 5,000 m² rose one place to 19,500 m² or 11.8 % and landed in second place. Smaller to medium-sized units between 1,000 and 3,000 m² reached 7,500 m² or 4.6 %, which corresponds to fourth place once again. They have thus improved by 319 m², compared with 7,181 m² or 7.8 % in the previous year. Small spaces of less than 1,000 m² were hardly significant, with take-up totalling 1,100 m² or 0.7 %. In the previous year, this figure was also only 735 m² or 0.8 %.

Outlook

The market for industrial and logistics properties in the Ruhr region continues to be characterised by a very low availability of space. The situation is gradually worsening. Larger speculative new builds will not be completed and brought to the market until 2025 and 2026. Central locations in the Ruhr region such as Essen and Duisburg are seeing a large influx. On the one hand, due to the high availability of employees thanks to the high population density, and on the other hand, due to low follow-up costs due to the proximity to harbours. These areas are viewed more sustainably.