Catella has released its annual forecast for the European logistics market, which shows that rents continue to rise across the continent, especially for ‘last mile’ properties.
The firm’s analysis covers a total of 112 regions in Europe and shows that the current European prime rent averages €5.81/sqm, ranging from €3.75/sqm in Zaragoza to €16.40/sqm in London.
Catella stated: ‘Since our last market overview in October 2021, prime rents for logistics have risen by an average of almost 3% across all 112 markets surveyed. The increases were particularly significant in Eindhoven (+18%), Brussels (+9%), Strasbourg (+10%), Bologna (+10%) and Prague (+8%).
‘Due to the sustained investor interest in the logistics segment, yield compression can be observed across all markets. The European average yield is now 4.7% which is 30 basis points lower compared to the analysis six months ago.
‘The lowest net initial yields can be found in the German ‘A’ locations (3.00-3.40%) as well as in Paris (3.20%) and London (3.00%). It seems to be only a matter of time before the prime yield in the top locations falls below the 3% mark.’
Catella added that there was record total investment in European logistics last year of €60bn, with almost €20bn of that going into UK logistics properties.