Major shortage of logistics real estate expected in 2023
Rent levels expected to see significant increase in the year ahead
Amsterdam – 23 January 2023 – In 2023, there is a risk of a major shortage developing in real estate for the logistics sector. The fact that the government has limited the construction of new distribution centres is resulting in an historically low level of investment in logistics real estate. This is according to the CBRE Outlook report, published today. The real estate advisor expects to see rent levels rise in the logistics sector.
As a result of growth in e-commerce and industry last year, demand for logistics real estate grew. However, supply failed to meet demand and this year will see less additional logistics real estate because of increasing construction costs and a shortage of available land. Jim Orsel, Head of Industrial & Logistics at CBRE: ‘Around 70% of logistics properties currently nearing completion have already been pre-let. Continuing to meet the persistent user demand is set to prove a huge challenge. In addition, the government is tightening up policy on the construction of distribution centres in mid-2023, which will further suppress supply.’
Rent levels increase
The limited supply has led to higher rents across the country in the space of just one year. Rent levels increased by 10-15%. The biggest rent increases were seen in the regions of Amsterdam, Eindhoven, Zuid-Limburg and Tilburg-Waalwijk. Orsel: ‘This trend is expected to continue through the first half of 2023.’
Increased efficiency needed
In the period ahead, we will need to start making more efficient use of business parks in order to meet the growing demand for logistical space. Orsel: ‘If this increased efficiency is not achieved, this will have an impact on growth in the sector. This sector accounts for 9% of GDP and affects the whole Dutch economy. Existing business parks and distribution centres will need to be put to more efficient use, for example through smarter deployment of the limited space. Think mixed-use developments or multi-level construction.’
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company with headquarters in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2020 revenue). The company employs more than 100,000 people worldwide and provides services in over 100 countries. CBRE offers strategic advice and guidance in property sales and leasing; corporate services; property, facilities and project management; appraisal and valuation; development services; investment management; and research and consulting. Please visit our websites at www.cbre.nl and www.cbre.com.