The global developments continue to create uncertainty: tariffs, economic dependency, armed conflicts; all of this affects daily flows of goods and thus logistics. Globalization is not coming to an end because of this, but is rather changing and possibly also more regional in its manifestation, LIP Invest stated in its market report “LIP UP TO DATE – Logistics Real Estate Germany” on November 6.
Despite a challenging market environment, according to the provider of real estate specialist funds, both the logistics investment market and the space market gained activity in the third quarter and show the highest volumes of the year so far. In the leasing market, there is currently a noticeable rise in demand mainly from the e-commerce and pharmaceutical sectors.
In the third quarter, the floor space turnover sums to 1.6 million square meters, thereby boosting the
year-to-date result: Overall, according to the market report, 4.2 million square meters of logistics space were leased or newly built in the first nine months. Companies are gradually moving away from their cautious positions and, in their lease commitments, are leaning on shorter terms and more individualized option arrangements to keep as much flexibility as possible. Especially e-commerce is driving demand for space: The company Blitz Distribution leased 38,000 square meters in Werne and 35,000 square meters in Bremen in the third quarter.
Construction activity in the third quarter remains subdued, with 800,000 square meters of new-build volume. In the first nine months, according to LIP Invest, around 2.3 million square meters of new logistics real estate were erected. This is, among other things, due to the fact that hardly any project developments larger than 50,000 square meters or
speculative projects are undertaken. Among the logistics properties for which the groundbreaking ceremony was celebrated in the third quarter is, for example, a 24,000-square-meter development by Complemus Real Estate in Euskirchen, North Rhine-Westphalia. The first tenant is the company MM Flowers Europe. The pharmaceutical industry is one of the current demand drivers for logistics space in Germany. High-revenue German companies supply numerous countries worldwide with medicines. In order to avoid supply shortages, especially in servicing the German healthcare system, a new law came into force in 2023: Since then, the need for temperature-controlled storage and transport solutions has increased. Many medicines – such as vaccines, insulin or biopharmaceuticals – must be stored consistently between +2 and +8 degrees Celsius or even at -70 degrees Celsius. For such temperature-controlled logistics real estate there are special requirements for safety and control.
The outfitting with cooling technology and IT systems also entails a high energy demand. At the same time, these investments in the equipment of the logistics properties mean long-term leases, the report said. With a transaction volume of 1.5 billion euros, the past three months, according to the market report, constitute the strongest quarter of the year. Overall, 4.1 billion euros were invested in German logistics real estate over the course of the year. Although this result is still driven by rather smaller individual deals, portfolio and large transactions are slowly picking up again. On the investment side, the increased interest in transshipment properties and cold storage facilities is noticeable, which is due to the rising demand from e-commerce and the pharmaceutical industry, the market report said. In Delmenhorst, for example, an approximately 11,500-square-meter cold logistics property changed ownership.
