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Madrid and Barcelona to Receive 1.1 Million Square Meters of Logistical Facilities in 2018

Posted by: In: Real Estate 26 Mar 2018 Comments: 0 Tags: , , , , , , , , , , ,
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26 March 2018

In the Spanish capital, 70% of the area under development is being built on a speculative basis, without having a pre-negotiated end-user; in Barcelona, the situation is the reverse.

The logistics sector in Spain is experiencing another period of heady growth. In 2017, the sector saw a historic high of 1.5 billion euros in investments, while also setting records in terms of allocated area, with the market taking on more than 1.5 million square meters. The year-on-year growth rate of 85%, together with rosy projections, has awoken the interest of many major real estate players, particularly investment funds, which are already working to provide operators with more space. Just this year, 1.18 million square meters of space dedicated to the logistics sector will be delivered in Madrid and Barcelona, according to a report by the consultancy JLL.

The rise of e-commerce and the improvement in the Spanish economy have led to heightened demand, reducing the available amount of business parks and logistical facilities. This is particularly the case in Spain’s two largest cities. In Madrid, the vacancy rate stands at 4.21%, despite a rebound in the last quarter of 2017 through the addition of new areas in the capital. In Barcelona, the situation is even more complicated, and the vacancy rate for logistical areas has fallen to 3.2%.

In both cities, therefore, high demand has led funds and socimis to develop new industrial facilities that will allow the market to continue growing. In the Spanish capital, of the 744,500 square meters that will be delivered this year, 70% has not yet been allocated. Only a third of the industrial facilities and lands that will be inaugurated during the next months already have tenants. This figure demonstrates that market players expect demand to continue to grow throughout the year.

Amazon, which will increase its presence in Spain this year, is a highlight of some of the deals going on in Madrid. The American e-commerce giant is developing its own facility, occupying 103,000 square meters in the capital, where it already has a presence in the Los Gavilanes industrial estate, in Getafe, and in Alcobendas. FM Logística, with 40,000 square meters of area, as well as Jaguar and its 15,000-square-meter facility, are also stand out transactions in Madrid’s logistics market.

Meanwhile, in Barcelona, the situation is the opposite of that of Madrid. In Catalonia’s capital, most of the logistics facilities already have tenants. 80% of the 441,200 square meters that will be delivered in 2018 in Barcelona, for own use or for lease to third parties, are developed with pre-negotiated contracts, despite the limited supply in the metropolis.

Amazon has also considered Catalonia for its expansion plans in Spain. The company is preparing 200,000 square meters of total surface area for use in Barcelona, one of the multinational’s key outposts in southern Europe. Last October, the firm inaugurated a logistical facility in El Prat de Llobregat. Markwins International will also inaugurate an 8,000-square-meter logistics project in the city.

Under this scenario, a survey of thirty investors in the sector, conducted by JLL, highlighted the fact that, faced with a shortage of product in the current market, 98% of respondents are considering the possibility of developing new warehouses in Spain, especially in existing logistical areas.

Barcelona, with 228,345 square meters of available facilities, has seen its logistics market expand its focus to locations such as Martorelles and Sant Esteve de Sesrovires. The first one, in the north of the Catalan capital, is a clear example of the trend, with notable growth in logistics areas in recent years. An example is the arrival of Amazon in the logistics park that Segro, a British fund, has in the municipality. Coincidentally, Segro also acquired two logistics facilities in Sant Esteve de Sesrovires, south of Barcelona.

“The logistics sector is demonstrating some solid fundamentals that give it enormous potential,” stressed Gustavo Rodríguez, JLL’s director of the logistics in Spain, who also stated that “international investors began focusing on the sector last year.” This is because, among other reasons, “our country has unique opportunities compared to other more consolidated markets, where returns are lower.” “Rents, as well as asset values, are increasing, but are still far from historic highs, so investors see opportunities,” the executive added.

Original Story: EjePrime – J. Izquierdo

Translation: Richard Turner

The post Madrid and Barcelona to Receive 1.1 Million Square Meters of Logistical Facilities in 2018 appeared first on Aura Real Estate Experts.

Source:: AURA Real Estate Experts

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