older companies, which presents as an increase in vacancy but is
distorting the real picture.
Snapshots of Occupier market
The UK – London shining but the rest of the Country struggles
The UK benefited from the prospect of coming out of recession
and uncertain times earlier than other European markets and is
now leading in terms of new speculative industrial development.
Within the M25, there are currently eight schemes in the construction or advanced planning stages and ‘design and builds’ are now
being considered again by occupiers who have struggled to find
existing product that they can work with or adapt.
London’s international status has created a dynamic where cash
funds are readily available for investment and a diverse tenant
base exists for occupation.
The former Carey site in Park Royal, West London was
acquired by SWIP/ Goya Developments recently and a detailed
revised application submitted for a 160,000 sq. ft. multi unit
development ( www.london-centralpark.com), which is expected
to start by January 2012. The scheme will consist of a range of
units between 8,000 -35,000 sqft, which have already seen strong
interest. Rents are expected to rise in this market before the end of
the year with the prospect of 2012 being well into recovery.
The UK and London in particular benefits from a diverse and
growing tenant demand due to a number of factors:
• An increase in the market for data centres due to its liberal
• The new coalition government supporting specialist profitable manufacturing (currently 12 percent of GDP) thereby
increasing the quantity of interesting small and medium
sized enterprises (SME’s) in the market.
• Establishment of 11 new Enterprise Zones around the UK
(in the areas most needed) to stimulate development and
encourage more employment.
• The development market as a whole seems to be rebounding as the diverse international base of financing, in particular cash purchasers, return.
• The UK has much more limited land supply and more
stringent planning regulations than some of its peers across
Europe such as France and Germany which have much bigger land masses.
It is expected that the UK will continue to recover and there will be
much bigger logistics units and potentially more mid-sized manufacturing units evolving.
See www.capitasymonds.co.uk/industrialvaluesmap for an
overview of land prices, capita and rental values town by town.
Northern Europe— Spots of Activity
Germany has seen a comeback, with take-up being up to 40 percent higher than in 2009, but speculative industrial development
will be limited with most of the projects being pre-lets or pre-sales.
Many of the purchasers are owner-occupier led due to state bank
finance. In the Hamburg region 17,000 of the 22,000 sq. m space
in the Mainlog Gehespitz Development is available.
Germany saw some improvement in demand, particularly evident in Hamburg. The Rhein Main area saw demand of 270,400
sq. m of corporate space which translates to double the space let in
H1 2010. Demand is mainly for space in excess of 10,000 sq. ft.
( 45 percent of all transactions).
Interesting deals recently completed in Germany include: TNT
with 7,500 sq. m in Gross Gerau, 66000 sq. m in Gernsheim to
Pfenning Corporate and 4000 sq. m to CAT LC in Russelsheim.
The Scandinavian countries have fared fairly well in the recession and the domestic demand has remained.
In Sweden GDP rose to 4. 4 percent during 2010, 6. 4 percent
during Q1 and 5. 3 percent during Q2 2011 with a 0.2 percent forecast for Q3 2011. The rents in the corporate sector are between
SEK 700-1 000 per sq. m and there have been some large deals
in this market primarily by domestic players. These include DK
Industrial Property Market Overview
• Leasing activity reached € 8 billion in 2010, a 28 percent increase on 2009
• European take-.up was 23 percent in Q1 2011 (lower than in Q4 2010) but was up more than 7 percent on an
• Forecast suggests that future demand for the market is likely to come from a broader constituency of occupiers,
such as e-retailing and new energy sector.
• Approx 849,000 sq m of industrial stock was put on the market in Q1 2011, a decrease of 54 percent over the
quarter and 25 percent over the year.
• The combination of subdued development activity and diminishing availability of logistics space are leading to an
overall shortage of new and modern warehouses across Europe.
• Vacancy rates in Q1 2011 are lower than 12 months ago for the majority of European countries.
• An oversupply of secondary (and often low quality) products is the driver of vacancy rates in those markets where
supply remain high.
• European occupier take-up for large distribution warehousing units in 2010 had a 30 percent increase on 2009,
reaching € 14. 6 million sq m.