Market report on the letting of logistics properties and industrial spaces in the Rhine-Main metropolitan area for 2018

More than 700,000 sqm of storage, logistics and production space was taken up in the Frankfurt am Main area last year. Take-up by all market participants was thus up 5 % year-on-year (2017: around 673,000 sqm) and topped the five-year average (around 580,000 sqm) by around 22 %. A strong second half of 2018 contributed the lion’s share of the result at approximately 410,000 sqm.

The Rhine-Main region is one of the most dynamic logistics regions in Germany, as underscored by the high level of project development activity and the large number of completions in recent years. More than half of all new leases signed were in new buildings.

The logistics sector once again rented the most space, accounting for more than half of take-up and thus reflecting the Rhine-Main region’s role as a hub for international goods supply.

Logistik Immobilien Marktbericht

Take-up by region

With a letting volume of approximately 433,000 sqm (61 %), the Rhine-Main South sub-market defined by Realogis once again proved to be the strongest logistics region – not least due to major new construction in Groß-Gerau, Trebur, etc. It was followed by the Rhine-Main East sub-market (16 %) in second place with around 116,000 sqm. Rhine-Main West (9 %, 61,000 sqm) and Mainz/ Wiesbaden (8 %, 58,000 sqm) contributed roughly equally to the good performance.

Logistik Immobilien Marktbericht

Take-up by size category

The level of annual take-up recorded for all size categories put together in previous years was achieved in 2018 by the “>10,000 sqm” size category alone, which accounted for a whole 471,000 sqm (67 %). The top leases in this category included ID Logistics in Hammersbach with 40,000 sqm and RWL in Trebur with 37,000 sqm. By way of comparison, the biggest deal in the first half of the 2018 was REWE/ Toom with 31,000 sqm at “M-Port³”. In second and third place for the year as a whole were the size categories between 2,001 and 5,000 sqm (16 %, 111,000 sqm) and between 5,001 and 10,000 sqm (13 %, 93,000 sqm).

Logistik Immobilien Marktbericht

Rental prices in 2018

The highest prime rent was recorded in new buildings in the Rhine-Main South sub-market with an asking price of EUR 6.95/sqm, while the prime rent in the Rhine-Main West and Frankfurt regions came to EUR 6.50/sqm. The lowest prime rents were paid by users in the Rhine- Main North (EUR 4.50/sqm) and Rhine-Main East (EUR 5.00/sqm) regions.

Relevant deals 2018

ID Logistics, Hammersbach, 40,000 sqm
RWL, Trebur, 37,000 sqm
Seifert, Bürstadt , 35,000 sqm
REWE/Toom, Rodgau, 30,000 sqm

Forecast for 2019

Due to the strong letting year in 2018 and the continued high demand, there is now only a limited supply of suitable free space available in the core region. This also presents opportunities for large-scale project developments in more rural peripheral areas of the metropolitan region with good transport connections, which companies with large space requirements and investors will both have to address to a greater extent.

Demand for logistics space depends on a continued good economic situation, a strong regional economy and consequently high purchasing power of the population. Retail companies – whether as online pure players or with omni-channel strategies – and their logistics providers play a leading role here when it comes to supplying the growing metropolitan area.

However, Realogis expects take-up to decrease slightly year-on-year because of space becoming scarcer. The fi ve-year average will probably be exceeded in spite of this. Rental prices in 2019 will remain at the high level of 2018 without signifi - cant changes.

Logistics Property Market Frankfurt: Rental Prices 2019 (EUR/sqm)

Logistik Immobilien Marktbericht

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  • New leases just exceed the 700,000 sqm takeup mark (+5 %)
  • Five-year average topped by around 22 %, tenyear average by around 40 %
  • More than 50 % of leases are in new buildings
  • Increased new construction activity makes the Rhine-Main region one of the most dynamic logistics regions in Germany
  • The strongest sector is logistics – hub of international goods supply
  • Outlook for 2019: demand in the growing metropolitan area remains persistently strong. If the economic situation remains the same: opportunities for large-scale project developments in rural peripheral areas

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Logistik Immobilien Marktbericht

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