Warehouse & logistics space market in the Rhine-Main area with Q2 results at a record level

The warehouse and logistics space market in the Rhine-Main area experienced a real boom in the second quarter of 2021. Not only did the large leases that were expected at the end of the last quarter come to a positive conclusion. Further large-scale leases also support the sales result that has now been achieved. According to an analysis by the owner-managed real estate consultancy NAI apollo - partner of the NAI apollo group - the take-up of space from rentals and owner-occupiers in the second quarter of 2021 amounts to 267,800 sqm.

“This is the best quarterly result since we started collecting data. Together with the weak start to the year with around 89,000 sqm, the half-year result in 2021 adds up to 356,400 sqm, ”said Dr. Konrad Kanzler, Head of Research of the NAI apollo group.

The average of the first half-year sales for the previous five years has thus been exceeded by more than 8 percent. The results of the first half of 2017 and 2016 remain unmatched.

“The main contribution to the revival of take-up was made by the resurgence of the warehousing and logistics companies that were cautious after 2018. At the same time, there is an increase in the importance of deals in the new construction segment, which had also decreased significantly in the previous quarters,” explains Michael Weyrauch, Head of Industrial Letting and Transaction at NAI apollo. Here, well-known areas stand out where expansions have recently taken place or corresponding plans and projects are being implemented.

The largest completion of the first half of the year is the leasing of around 43,000 sqm in the third construction phase of the new Dietz AG project development in the intermunicipal industrial park "Limes" near Hammersbach. “The contract was signed last year, but has only now come into effect. In addition, the rental of the complete second construction phase with approx. 40,000 m² by an international company is in the dust. This closing took place at the beginning of the third quarter and was therefore not included in the half-year figures. This means that the entire area, including its three buildings, is fully rented,” says Weyrauch.

Another large-scale rental with almost 40,000 sqm by a logistics service provider took place in a new building development in Kleinostheim. A freight handling company concluded the largest deal in an existing building. It rented 18,000 sqm in the second construction phase in M-Port³ on the Mönchhof site in Kelsterbach, which was completed at the beginning of the year. All of the above deals took place in the second quarter of the year. Leases of more than 10,000 m² account for 158,000 sqm of the half-yearly turnover. With a market share of 44.4 percent, they are the size class with the highest turnover, followed by the “5,001 to 10,000 sqm” segment (28.5 percent). Compared to the first half of 2021, with the exception of the “3,001 to 5,000 sqm” segment, all size categories show sales increases.

Transport, storage and logistics companies are once again the top-selling demand for space

With 125,700 sqm, almost half of the take-up of space in the second quarter is accounted for by transport, storage and logistics companies. “They were last able to achieve a better quarterly result at the end of 2018. Even in the first half of the year, the warehouse and logistics service providers form the industry with the highest turnover with 139,600 sqm or a turnover share of 39.2 percent,” explains Kanzler. This is followed by retail, the most recently placed first (27.2 percent), as well as companies from the industrial and manufacturing sector (22.8 percent). Compared to the first half of 2020, the warehouse and logistics sector has increased its market share by over 19 percentage points (+85,500 m²), while the retail sector has lost 24.2 percentage points (-46,400 sqm). The importance of industrial and commercial enterprises is almost unchanged year-on-year.

New build space quickly finds buyers

An important basis for the current increase in turnover is the availability of the corresponding space available.

“Almost all of the large-scale closings were in new builds or recently completed projects. New developments and expansions in the intermunicipal industrial park Limes near Hammersbach and in Kleinostheim by Hillwood stand out here. The Mönchhof area in Kelsterbach, the Frasers Park in Egelsbach, the P3 Logistic Park in Friedrichsdorf and the Mainsite logistics center in Obernburg should also be mentioned, ” Weyrauch said.

After a significant increase in the second quarter, half-year sales of just under 150,000 sqm or a market share of just under 150,000 sqm are now due to the signing of leases in new projects, i.e. currently not yet completed project developments, as well as owner-occupier projects whose construction has started in the past six months 42 percent. In the first quarter In 2021 this was 16 percent.

Southern and eastern sub-markets with the highest share of sales

The spatial distribution of market activities within the Rhine-Main area is also designed accordingly. With a market share of almost 50 percent or 175,000 m², the focus remains on the southern sub-markets. As expected, the eastern areas between the A3 motorway in the south and the A5 in the west, where half-yearly take-up now adds up to around 117,000 m², have increased significantly compared to the first quarter.

Further market normalization expected

Along with the falling number of new corona infections, the growing vaccination rate and the economic opening, the mood on the storage and logistics market in the Rhine-Main area has brightened significantly. Above all, the transport, storage and logistics companies, which had acted cautiously in the previous quarters, are again showing an increased need for space. "If the overcoming of the corona crisis becomes more solid in the coming months, the positive trend should continue in the second half of the year," said Chancellor.

The lack of existing properties that meet user requirements as well as buildable open spaces, especially for large-scale uses, continues to be the biggest problem. “As the past few months have shown, such an offer is quickly absorbed by the market. As a result, the trend towards increasing the importance of the outside areas of the market area continues, as larger properties have recently been built here, some of them speculatively, or corresponding plans are in place,” Weyrauch adds.

Against this background, it is still difficult to make a sales forecast for the current year. The developments in the last few months indicate a normalization of the market activities at pre-crisis level, whereby an annual turnover in the range of 550,000 sqm seems achievable.

Source: NAI apollo