JLL Supply Chain Activity Index: A Short-Term Prediction of Logistics Property Demand
Property developers and investors who want a deeper insight into the future direction of European logistics property markets will find this new quarterly index valuable; so too will major corporates, the main occupiers of logistics space.
The development and supply of warehouses, which are a key component of corporate supply chains, is often subject to property market vagaries, including demand dynamics. By providing an up-to-date, stronger understanding of market conditions, the Supply Chain Activity Index will allow better-informed developer, investor and occupier decisions.
JLL's Industrial & Logistics is pleased to present its new Supply Chain Activity Index, a composite index of economic and supply chain variables that we have constructed to predict short-term corporate demand for logistics (distribution warehouse) space across Europe.
Supply Chain Activity Index
Occupier Insights Q4 2016
Investor Insights Q4 2016
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Although just shy of the 2010 record, occupier demand in 2016 rose by almost 40% YoY to the second highest level registered in the UK. Nearly one-third of all warehouse space taken-up was for e-commerce services – compared to an average of 11% in Europe as a whole. This highlights the strong shift to digital retail concepts (both online and in-store) in the UK, a trend likely to continue this year. Overall, the UK economy remains fairly resilient despite Brexit uncertainties. In fact, the UK manufacturing sector started 2017 with output rising at its fastest rate since early 2014.
Richard EvansLead Director Industrial & Logisticsrichard.email@example.com
As we predicted, 2016 ended with a new record for warehousing take-up in Germany. Sustaining this activity was a further rapid expansion in digital retail concepts, reflected in a notable increase in space taken-up by retail companies along with units specifically acquired for e-commerce services. This trend will continue in 2017 as we expect the same-day and same-hour sector, as well as online grocery, to grow even more. When this is combined with an economy forecast to grow in line with last year’s 1.7% - driven mainly by an improving manufacturing sector – the robust demand for warehousing space is set to be prolonged.
Frank WeberHead of Industrial Agencyfrank.firstname.lastname@example.org
Even though there was lower activity in 2016 YoY within the main French logistics corridor (Lille-Paris-Lyon-Marseille), overall occupier demand was still vigorous as the newly-observed shift into the regional markets continued. Demand was led by retail companies, which in 2016 took over half of the total space as growth in online retail and rising pressure on city logistics was maintained. Moving into 2017 we expect this trend to continue and occupiers to be broadly active over H1.
Bruno Montigny Lead Director Industrial & Logisticsbruno.email@example.com
Central Europe had a record 2016 with occupier activity rising 35% YoY, with particularly strong growth in Poland. More moderate growth was recorded elsewhere yet demand outstripped supply in all countries, seeing the lowest vacancy rates across the region, since pre-crisis times. For the first time, retail companies were the most active occupier group, marking a 150% YoY rise as the market is becoming more and more driven by a maturing and increasingly digital retail sector. Although the CEE economy weakened in the final months of 2016, there are positive signs hinting to accelerating growth. The region’s GDP has likely improved over Q4 and the upwards trend is expected to continue in Q1 2017.
Harry BannatyneLead Director of CEEIndustrial & Logisticsharry.firstname.lastname@example.org
Head of EMEA Industrial and Logistics
Head of EMEA Industrial and Logistics Research
EMEA Industrial and Logistics Research
EMEA Industrial and Logistics Research