TRENDS AND PERSPECTIVES IN THE LOGISTICS PROPERTY MARKET Christophe Golenvaux Associate Director Industrial Leasing Belgium 3 March 2016
Contents 1. Overview - Belgium & Europe Leasing Market Investment Market 2. Trends reshaping logistics 2
Belgian & European Leasing Market 3
Current European Stock Total European stock above 250 million sq m In million sq m > 50 7.1 30-50 20-30 10-20 4.3 18.2 5-10 1-5 <1 22.2 25.3 20.6 27.0 59.3 5.7 9.8 2.0 1.5 2.1 1.8 17.2 14.0 0.9 0.2 4.1 8.5 Distribution Warehousing Stock>5,000 sq m (UK: >10,000 sq m) Source: JLL 4
Take-up concentrates on European hotspots 2015 annual European take-up sets new record (Germany, France, UK, The Netherlands...) 17.1 million sq m +14% YoY +21% on 5-year average 2015 annual Belgian take-up performed under average ranks 9 th in Europe 0.483 million sq m -13% -19% YoY on 5-year average Source: JLL 5
Take-up Belgium 2015 vs. 2014 and 5-yr average Antwerp-Brussels and Antwerp-Limburg-Liège attracted highest volumes in 2015 157,800 50,550 191,500 37,500 5-y average 2014 2015 Brussels-Antwerp (A12-E19) incl. Nivelles/Meer Mons-Charleroi-Liège (E42) Antwerp-Limburg-Liège (E313, E34, E314 towards The Netherlands) Antwerp-Ghent (E17) Airport Main Sea Ports Main Inland Ports Motorway Railways Main Rivers and Canals Figures in sq.m. 6
Recent Transactions Zaventem Beringen BRUCARGO MG Real Estate & Montea / DHL Q1 2015 36,500 sq.m. INDUSTRIAL ZONE Goodman/Mobis Q2 2015 58,500 sq.m. Port of Ghent Kontich KLUIZENDOK WDP/Distrilog Q4 2015 20,000 sq.m. SATENROZEN 13 WDP/DHL Q3 2015 21,100 sq.m. Willebroek Heppignies DE HULST MG Real Estate/ Federal Mogul Q3 2015 Trafic Q4 2015 21,000 sq.m. 29,000 sq.m. 7
Belgian & European Investment Market 8
High investment volumes throughout Europe 2015 annual European investment volumes stable on 2014 record year 21.5 billion -1% YoY +63% on 5-year average 2015 annual Belgian investment volumes second highest ever after 2007 0.34 billion +44% YoY +78% on 5-year average Source: JLL 9
2015 Year-end Logistics & Industrial Investment Volumes Another incredible year for asset class Industrial Transaction Volumes 2015 in million 943 1,159 5,000 or over 3,000 to 5,000 1,000 to 3,000 500 to 1,000 100 to 500 50-100 0-50 No Transactions 59 321 7,420 1,188 3,986 340 2,054 416 409 1,366 69 84 23 498 121 77 47 30 360 120 359 39 Source: JLL 10
Prime logistics yields, 2015 & Outlook Yield compression continues Stockholm 5.75% -50 bps Moscow 12.00% 0 bps 4.75% -25 bps 7.00% 0 bps Dublin 4.50% -25 bps Rotterdam Birmingham London Hamburg 6.50% -50 bps Brussels 5.60% -40 bps Berlin 5.25% -75 bps 5.25% -65 bps 6.50% -50 bps Paris Frankfurt Prague 5.80% -95 bps 6.90% -25 bps 5.40% -75 bps 8.75% -25 bps 6.75% -25 bps Warsaw Budapest 6.75% -50 bps Milan Madrid Jan 2016 Yield 2015 Movement Projected Yield Shift Source: JLL 11
How does Europe compare to US & Asia? Average logistics yield still higher than rates seen in other regions Amsterdam Seattle 4.5% San Francisco 4.25% Southern California 4.25% Source: JLL to the USA? Average: 5.1% Denver 5.5% Dallas 4.9% New Jersey Chicago 4.75% 4.95% Philadelphia 5.25% Atlanta 5.5% Miami 4.75% London 4.5% Paris 5.8% Lyon 5.9% Barcelona 6.75% 5.6% 5.4% Frankfurt 5.25% Milan 6.9% Berlin Average: 6.3% Warsaw 6.5% 6.75% Bratislava Prague 8.0% to Asia? Average: 5.7% Seoul 5.25% China 6.0% Hong Kong 5.35% Malaysia 6.5% Singapore 6.5% Tokyo 4.0% Australia 6.25% Source: JLL 12
5 Trends Reshaping global logistics
1. E-commerce From production -led supply chains to consumer-centric demand 14
2. Technology New technology including digitisation of retail, big data, 3D-printing, robotics etc. will drive change
3. Globalisation and right-shoring Globalisation will continue but European logistics markets are likely to see more re-shoring and near-shoring 16
4. City logistics Demand for last mile logistics facilities is expanding due to the growth of online retail 17
5. Multi-modality Traffic congestion, the segmentation of supply chains and sustainability issues create opportunities for futureproof multi-modal warehouses 18
Real estate implications New trends will drive change in the type and location of logistics facilities Logistics buildings will get taller Multi-modal logistics platforms in cities Rising demand for facilities supporting faster throughput but declining demand for storage space Warehouses must have secure and ubiquitous wireless access Declining space for staff amenities and car parks Declining dependence on locations with strong workforce Consolidation centres in cities and at the city fringe Multi-storey ramped logistics facilities
Conclusion ü Technological change will have a higher impact on supply chain processes and logistics real estate. ü The challenge of city logistics will drive demand for a range of facilities in and around major European cities. ü Globalisation will continue, but European logistics markets are likely to see more re-shoring and near-shoring. 20
The changes to supply chains will impact property, but the future for the right logistics property is bright. 21
Thank you for your attention. Contacts: Christophe Golenvaux Associate Director Industrial Leasing Belgium Tel. +32 2 550 25 18 christophe.golenvaux@eu.jll.com Ann Vanderwegen Senior Research Analyst Tel. +32 2 550 26 81 ann.vanderwegen@eu.jll.com This publication is the sole property of Jones Lang LaSalle IP, Inc. and must not be copied, reproduced or transmitted in any form or by any means, either in whole or in part, without the prior written consent of Jones Lang LaSalle IP, Inc. The information contained in this publication has been obtained from sources generally regarded to be reliable. However, no representation is made, or warranty given, in respect of the accuracy of this information. We would like to be informed of any inaccuracies so that we may correct them. Jones Lang LaSalle does not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this publication. Copyright Copyright 2014 JONES JLL LANG LASALLE IP, INC. 2016