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Market report on the letting of logistics properties and industrial spaces in the Greater Munich area for 2018

 

The Greater Munich area enjoyed another successful year in 2018. Despite long-standing space shortages and a vacancy rate of less than 1%, the letting volume for warehouse, logistics and production space across all market participants amounted to 289,500 sqm in the past year. This was in line with the two highest figures in the last five years (2014 and 2017: 290,000 sqm) and 7% above the five-year average (271,300 sqm).

Logistik Immobilien Marktbericht

Take-up by regions

According to the latest analysis by Realogis, existing properties made the largest contribution to the strong take-up in the past year (71%, 205,900 sqm), followed by new builds (16%, 44,600 sqm) and brownfield developments (13%, 39,000 sqm). Two project developments in Moosburg were fully let well ahead of completion (MP Holding to Rhenus, Garbe to Amazon). Newly built properties accounted for a total of 21,000 sqm. The highest letting performance was again recorded in the North region at 43% (125,500 sqm), followed by the East region at 28% (81,000 sqm). At 15% (44,000 sqm), the West region was down on the previous year (19%, 55,100 sqm), as the commercial district in Olching and Bergkirchen – which accounted for a large proportion of take-up in the West region in previous years – is now fully developed and let. 39,000 sqm (14%) of space was let in the South region.

Logistik Immobilien Marktbericht

Take-up by size

Rental units in the size category over 5,000 sqm made the largest contribution to the strong take-up in 2018. At 177,000 sqm, this category accounted for 61% of total take-up. The top deals included the leases signed with Dachser in Kirchheim (14,000 sqm), Rhenus in Moosburg (12,900 sqm) and Schustermann & Borenstein in Aschheim (12,000 sqm). A quarter of take-up was attributable to units between 1,001 and 3,000 sqm, while the 3,001 to 5,000 sqm category accounted for 10% (29,600 sqm).

Logistik Immobilien Marktbericht

Take-up by industry

Strong consumer demand means that retail, including e-commerce, has overtaken logistics as the sector with the highest take-up in the Munich region. According to the Realogis report, companies from this user group concluded leases for 110,000 sqm of space and contributed to 38% to total take-up (2017: 35%). Almost 40% of this retail take-up was attributable to e-commerce, including the 11,000 sqm lease concluded with Rewe in Feldkirchen. The logistics sector took second place with 30% or 87,900 sqm of total take-up, followed by industrial companies (25%, 73,100 sqm).

Logistik Immobilien Marktbericht

Rent prices

With space becoming steadily more scarce and competition for the available space increasing, the Munich logistics property market saw the highest prime rents in Germany at EUR 7.25/sqm for new builds in the region around Munich. This means that prices have risen by 12% over the past five years and by 1% compared with the previous year. Average rents for new builds in the region around Munich increased by 13% year-on-year to EUR 6.75/sqm.

Logistik Immobilien Marktbericht

Dachser SE, Kirchheim, 14,000 sqm
Rhenus, Moosburg, 12,900 sqm
Schustermann & Borenstein, Aschheim, 12,000 sqm


Forecast 2019

Muted forecast for 2019: Due to the supply-side shortage, the logistics expert Realogis is forecasting take-up of between 250,000 and 300,000 sqm in the current year. This will depend on whether two major projects in eastern Munich that are currently in the process of obtaining building rights can be realised. Potential tenants from retail, logistics and industry are already lined up.

Without these two projects, the total letting volume for 2019 would be less than 200,000 sqm on account of the shortage of available space, with almost no new building projects on the horizon. This scenario would also lead to a further rise in rents.

Rental prices 2019 €/m²

Logistik Immobilien Marktbericht

all maps

Facts

  • Take-up in 2018 repeats high prior-year level
  • Take-up distribution: Existing properties 71%, new builds 16%, brownfield 13%
  • Larger units in excess of 5,000 sqm account for 60% of take-up for the year
  • Retail overtakes logistics as the sector with the highest take-up
  • Two new project developments fully let well before completion
  • Muted forecast for 2019: Average take-up anticipated – depending on building rights for two major projects in eastern Munich


Logistik Immobilien Marktbericht

* Greater Munich market area
The Bavarian capital, Munich, ranks among the leading economic centres in international comparison and is characterised by a broad and balanced economic and sector structure. Realogis defines the relevant available warehouse, logistics, industrial and production space within a radius of approximately 50 km around Munich as a submarket. Geographically located in the heart of Europe, Greater Munich has a high-performance transport infrastructure including eight motorways (A8, A9, A92, A94, A95, A96, A995 and A99), an airport, and rail-based freight transport.

** Acquisitions, developments and investments by owner-occupiers are not included



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Logistik Immobilien Marktbericht

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