The market for industrial and logistics properties in Central Germany showed a take-up of around 127,400 square metres in the first half of the current year. This represents a reduction of almost 48 per cent compared to the same period last year. This decline is primarily due to subdued demand, which reflects the overall economic development in Germany. The real estate consultant CBRE provides the relevant data for this.
In contrast to the previous year, vacancy rates increased in some key regions. They rose from 5.3 per cent to 11 per cent in the A4 Thuringia region and from 9.5 per cent to 16.9 per cent in the Halle/Leipzig area. The A4 Saxony market, however, maintained a stable vacancy rate of 3.4 per cent. In Magdeburg, vacancies even decreased from 8.9 per cent to 7.5 per cent. Despite these developments, a gradual reduction in vacancy rates is expected, as no significant new speculative logistics space has been added to the market.
Rent Price Development and Market Outlook
Prime rents remained stable in almost all submarkets, even in the face of existing competitive pressure. In the Halle/Leipzig market segment, the prime rent was 6.00 Euro per square metre, and in the A4 Thuringia market area, it was 5.80 Euro per square metre. Magdeburg also recorded a stable prime of 5.50 Euro per square metre. A slight increase was observed in the A4 Saxony market, where the prime rent rose from 6.10 Euro to 6.20 Euro per square metre.
Frank Schönfelder, Senior Director and Team Lead Industrial & Logistics at CBRE in Germany, comments on the market situation: “The Central German submarkets lacked larger inquiries in the first two quarters. However, a recovery for the coming quarters is already becoming apparent.” He attributes the current reluctance in demand to the uncertain overall economic situation in Germany and Europe. Schönfelder predicts that an economic recovery will also lead to increased demand for logistics space in this federal region.
The East and Central German logistics markets benefited from undercapacities in other federal states during the so-called boom years. As soon as these markets recover, Schönfelder expects increased demand to be recorded in Central Germany again. Initial signs of this are already visible. Despite challenges in parts of the automotive industry, no major negative impacts on East German production are currently apparent. Factories in the greater Leipzig area, for example, are operating stably and are partly expanding their production lines.
Full-Year Forecast
For the third and fourth quarters, increases in take-up are expected in the Central German logistics market. In the long term, locations such as Leipzig, Halle, and Dresden, in particular, will contribute significantly to the recovery of the regional logistics real estate market. These locations are characterised by strong economic power. Especially in Dresden, an increase in demand inquiries in the semiconductor and microelectronics industry sector is expected.
