"After the last eight particularly strong quarters with take-up significantly over the 600,000m² mark, the French logistics sector has seen a levelling off in the 2nd quarter of 2016, showing take-up edging above 540,000m², representing a 34% decline over a one year period. 1.5 million m² of warehouse space above 5,000m² (86 transactions) was sold in H1 2016 compared to 1.6 million m² the previous year (88 transactions)", explains René Jeannenot, Logistics Director France. These figures examine Warehouses A, B, C, courier, and refrigerated warehouses.
As for average size of the warehouses sold - circa 17,400m² at the end of June 2016, compared to 16,000m² at the end of December 2015 - once again the age-old adage "bigger is better" proved to be true.
Transactions of warehouse space between 20,000m² and 40,000m² and those of surface areas over 40,000m² once again registered declining sales figures. These amounted to over 800,000m², half the total volume recorded during H1 2016. Compared to 2015, these have declined in volume by 22% and 15% respectively.
Class B operations, on the other hand, increased significantly, cornering 14% of the market during the period observed, compared to 6% a year earlier. "More than ever before, urban logistics are central to new occupier habits, with over 68,000m² of space changing hands this half year ", observes René Jeannenot, Logistics Director France.
With 3.3 million m² of empty warehouse space available on 1 July 2016, of which 1.5 million m² concerns class A warehouses, availability one year later has only marginally changed since the end of 2015 (+3%). Suburban Paris alone counts almost half of this stock. Over 130,000m² currently being built in Lyon, Toulouse and suburban Paris will be put on the market in the coming months.
Suburban Paris, the primary French logistics market, has followed the general trend, with a 34% decline in activity over one year, despite three confirmed transactions in excess of 25,000m² totalling 87,000m². Over 400,000m² has been sold in this area since the start of the year.
The regions, with three quarters of the market share, have been particularly active due to the dynamics of certain secondary markets such as Strasbourg and Rennes. This result, however, is even more at variance along the north-south axis: activity in Lille increased by 10%, whilst Lyon and Marseille dropped by 34% and 71% during H1 2016.
"There have been more individual turnkey transactions in the regions, where over 650,000m² of space was sold since the start of the year (60% of the local market) compared to 77,000m² in the Île-de-France (19% of the market)", explains René Jeannenot, Logistics Director France.
Very few changes have been observed in Class A average rental bands. The "prime" values in the regions continue to climb to between €42/m² and €48/m², settling at €53/m² and €55/m² in the Île-de-France.
With over €565m invested in H1 2016, investments in the logistics market (excluding industrial premises) increased by 17% compared to H1 2015. In contrast to 2015, there are more pan-European portfolios. "Nevertheless, H1 was stimulated by several average size portfolios bought by UK funds, such as Diane acquired by Rockspring for €105m, or Wolf bought by Stam Europe for an American fund for close to €100m. Of interest is the return and the rapid increase in speculative purchases of Logistic Platforms often located both in secure zones along the north-south axis as well as in Logistic hubs such as Toulouse and Le Havre," clarifies Franck Poizat, Logistics and Business Investment Director France. Due to the massive inflow of liquidities and financial ratios reaching record heights, the rates of "prime" yields is set at 5.70% in the Île-de-France. "In urban logistics, even rates of contraction of between 5% and 5.50% are expected", concludes Franck Poizat, Logistics and Business Investment Director France.
